Homebuyers who fled to Miami hoping to escape high taxes are in for a rude awakening

The homebuying craze is driving property values up in lower-tax havens like Florida, locking new homeowners into higher tax bills.

• New Yorkers moved to Miami in droves during the pandemic — fleeing high taxes in the Empire State. 
• But property taxes in Miami were among the fastest rising in the US last year, a new report found. 
• Overall, the South saw much higher property tax hikes than the Northeast, the data show. 

Almost paradise! 

Miami may not be the complete tax haven that New Yorkers thought it was.

For the past three years, New Yorkers have accelerated their moves from the Big Apple for the Sunshine State for year-round warmth, comparably lower costs of living, and smaller tax bills. 

But while the Magic City's sunshine seems everlasting and its median home price is still below New York's, the benefits to new snowbirds and other movers aren't what they used to be. The homebuying craze is driving property values up and locking new homeowners into higher tax bills, a new report by real estate data firm Attom found.

Single-family property taxes in Miami jumped 12.6% between 2021 and 2022, for one of the largest single-city increases in a year when the fees were already soaring twice as fast nationwide as they did in the previous 12-month period, according to Attom. Per the data, Americans owning 87 million homes owed a whopping $339.8 billion in property taxes in 2022, up 3.6% from 2021, when the tax bills rose just 1.6%.

Florida's unique property tax laws

For many people in Florida, this uptick came as a big surprise, Insider previously reported. Since the mid-1990s, Florida has had a unique property tax system: under a constitutional amendment called Save Our Homes, it placed the majority of the tax burden on newcomers, or first-time homebuyers.

Property tax increases for existing homeowners are capped at a 3% per year. So, even if their home values skyrocket as newcomers flock to the region, the higher tax bills may still be within their means. The tax cap is portable, too: it goes with the homeowner if they decide to buy another home in the state.

That's great news for established Floridians aghast at the flood of newcomers, but it can come as a shock to movers who used current tax bills to estimate their costs of living, Insider's earlier reporting found. In other cases, retirees who live on fixed incomes have had to move out of the state because they simply couldn't afford higher taxes, Matt Simmons, a Fort Myers-based appraiser who has worked with several people facing this issue, told Insider in November.

There is another huge benefit for Florida-bound New Yorkers that persists, however: the lack of an income tax, which creates a savings that might easily offset any unplanned real estate costs.

Northerners that flocked to the sunbelt could face higher-than-expected property costs 

While Florida is a stand-out example, it's not just people who traded in their Manhattan condo for a Miami beach house that could face sticker shock when they see their latest property tax bills, Attom's data show.

It's a trend happening all along the Sunbelt, which encompasses some of the most attractive regions for movers since before the pandemic. Property taxes in the Southern region climbed 5.8% on average last year, well above the national average of 3% and the 0.7% increase seen in the Northeast, the data show.

To be sure, there are some outliers to this trend.

For example, the northeastern city Pittsburgh saw a 59.6% increase in property taxes year-over-year, giving it the dubious distinction of topping Attom's list of municipal tax hikes in the US. On the flip-side, the Arizona cities of Phoenix and Tucson — both popular sunbelt migration spots — saw their property tax bills drop 2.6% and 1.4%, respectively, putting them among places that saw the steeepest declines last year, according to Attom. 

But still, it's noteworthy, and particularly surprising if you're moving for lower taxes and get a higher bill instead.