The new tax law makes the decision to stay in California even more difficult in 2018. As Ken Rosen, renowned real estate economist, said in a New York Times interview of living in California, it’s already difficult, it’s already expensive. This adds one more negative.
Incentives to move out of California offered by the new tax law include:
The capping of the mortgage interest deduction could make buying a home in California even less affordable than it is now. This tax law change alone might not increase housing costs for the majority of home buyers across the country, but buyers who live in expensive housing markets along the coasts like California will be hurt. Those who live in California will also be hit hard at tax time with the loss of the deduction for state and local income taxes.
Washington State doesn’t have it entirely right or Amazon wouldn’t be looking away from Seattle for a new “second headquarters” city, but with no individual income tax Washington is going to look even more enticing to high-wage earners and retirees. Seattle may not have Florida weather to offer, but for some that will be offset by the dynamic economy with companies like Blue Origin, Starbucks, Microsoft, SpaceX (satellite development), REI, Costco and Expedia calling the Seattle-area home.