Change residence from Minnesota to Florida

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Mr. Potter
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Change residence from Minnesota to Florida

Post by Mr. Potter »

We have been thinking about this for awhile and are now looking for properties in Florida. Since our only grandchild is there it’s tough to be 1,000 miles away. Anyhow, we are planning to keep our home in Minnesota and purchase another home in Florida. Obviously we would make Florida our primary residence to save on taxes. A quick run of my numbers puts an extra $1k in our pocket every month. For those who have done this if we purchase a home, open a local bank account, switch our drivers license, register to vote, spend 183 days in Florida per year we should be good. Or is there more to this ?
increment
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Re: Change residence from Minnesota to Florida

Post by increment »

I have never been a Minnesotan, but there are pieces online on this topic. I found a few, from an accounting firm, a financial advising firm, and the like. It sounds like it depends on how much you are willing to give up your Minnesota lifestyle.
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retiredjg
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Re: Change residence from Minnesota to Florida

Post by retiredjg »

I think that pretty much covers it except for the first year. For the first year, you may have to file partial year resident taxes in MN. This sounds like a pain, but tax software makes it pretty easy.
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Mr. Potter
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Re: Change residence from Minnesota to Florida

Post by Mr. Potter »

Thanks increment,
I’m actually neutral on keeping the Minnesota home, it’s a big house that we don’t need anymore.
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Mr. Potter
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Re: Change residence from Minnesota to Florida

Post by Mr. Potter »

I think that pretty much covers it except for the first year. For the first year, you may have to file partial year resident taxes in MN. This sounds like a pain, but tax software makes it pretty easy.
That’s what I was thinking, it’s still free country
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Re: Change residence from Minnesota to Florida

Post by muffins14 »

Mr. Potter wrote: Tue Jan 24, 2023 7:51 am We have been thinking about this for awhile and are now looking for properties in Florida. Since our only grandchild is there it’s tough to be 1,000 miles away. Anyhow, we are planning to keep our home in Minnesota and purchase another home in Florida. Obviously we would make Florida our primary residence to save on taxes. A quick run of my numbers puts an extra $1k in our pocket every month. For those who have done this if we purchase a home, open a local bank account, switch our drivers license, register to vote, spend 183 days in Florida per year we should be good. Or is there more to this ?
Sure, you may save $1k/month on taxes each year, but you now also have to pay for owning two homes, pay for maintenance on two homes, and deal with the headaches of two homes, plus you have to pay for plane tickets to fly back and forth between your two homes. That might more than offset your $1k in monthly savings unless the house is exceptionally cheap, or you are able to rent one out efficiently
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Sax32
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Re: Change residence from Minnesota to Florida

Post by Sax32 »

muffins14 wrote: Tue Jan 24, 2023 8:24 am
Mr. Potter wrote: Tue Jan 24, 2023 7:51 am We have been thinking about this for awhile and are now looking for properties in Florida. Since our only grandchild is there it’s tough to be 1,000 miles away. Anyhow, we are planning to keep our home in Minnesota and purchase another home in Florida. Obviously we would make Florida our primary residence to save on taxes. A quick run of my numbers puts an extra $1k in our pocket every month. For those who have done this if we purchase a home, open a local bank account, switch our drivers license, register to vote, spend 183 days in Florida per year we should be good. Or is there more to this ?
Sure, you may save $1k/month on taxes each year, but you now also have to pay for owning two homes, pay for maintenance on two homes, and deal with the headaches of two homes, plus you have to pay for plane tickets to fly back and forth between your two homes. That might more than offset your $1k in monthly savings unless the house is exceptionally cheap, or you are able to rent one out efficiently
What about downsizing your house in Minnesota, might help with utility costs. Not sure if that would really do a whole lot being that prices are high as well as interest rates. Maybe run the numbers to see if it's worth it. Real Estate always goes up over the long haul, so you will see appreciation.
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Re: Change residence from Minnesota to Florida

Post by galawdawg »

Do you have someone near your Minnesota home that will serve as a caretaker? Assuming you spend much of your time in Florida during the winter, don't overlook the issues that can arise from having a vacant home in a state like Minnesota during the harshest months of winter. That is the case even if you winterize.
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Re: Change residence from Minnesota to Florida

Post by Mr. Potter »

I do have one son left in the area that could take care of any home issues, he could even sell his townhouse and live here while we’re gone so we do have options.
If my grandson wasn’t in Florida I wouldn’t be considering this.
As for downsizing, our home is on a cul-d-sac, on a small lake near Mpls/St Paul, very desirable property, I would hate to give it up just to downsize
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Re: Change residence from Minnesota to Florida

Post by retiredjg »

Mabye he could buy your house and you buy his condo...?
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Re: Change residence from Minnesota to Florida

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Mabye he could buy your house and you buy his condo...?
Trust me the wheels are spinning in my head, he actually is looking to sell his townhouse anyhow or maybe rent it out. All his friends are near my home and he’s 15 miles away. (Bad decision on his part) maybe I just charge him a little rent while we’re gone in exchange for watching the house. Hate to just sell in case things don’t work out in Florida. Had a friend who moved to Arizona to be by his grandkids, son got a new job in a different state so now what?
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Re: Change residence from Minnesota to Florida

Post by hachiko »

It will help your claim of change of domicile if you can get the Florida homestead exemption.

The other things you mention are just window dressing. For sure - they are important - but an auditor is not going to just way "well, they changed their driver's license and opened a bank account, so that's all I need to do." That said, while I have never been involved in a domicile case in Minnesota, they aren't exactly known for being super aggressive in this area.

Since the house situation is already set, not much you can do with that factor, unless of course, you sell your house or rent it out. Ideally, your home in Florida will be worth more than your home in Minnesota.

Other than that, to build a strong case, you're going to need to change things that may not be so easy to change. Such as your doctor, lawyer, accountant, etc. It's easy to open a bank account. It's much more difficult to find a new doctor and actually switch to them.

The other two large factors (since the family piece is probably set, i.e., it is the way it is) are time and teddy bears. Spend as much time as you can in Florida and as much time as you can outside of Minnesota. The teddy bear test, referred to by some (me) as the Gollum test, is basically where you keep your "precious". Officially, it's often referred to as "items near and dear".

Ultimately, your goal is to prove
1) you intend to remain in Florida indefinitely, and
2) you were physically present in Florida at the time of (1).

Both are important and can be messed up if you're not careful. Your intent must be to remain in Florida indefinitely. Simply intending to remain outside of Minnesota indefinitely is not sufficient. I've seen people mess up this argument. Sounds like there's not much money involved, so the consequences wouldn't necessarily be disastrous. If the tax savings is material, I'd always recommend consulting with someone on your specific facts.

The second piece doesn't come up as often, and the difference is generally a couple days. But if you imagine the scenario where you have a $10mm windfall that gets paid on 12/31, and you want to avoid MN tax on that. You fly to Florida to find a house, put an offer in, and close date is 11/1. You decide that you have an intent to remain in Florida indefinitely as if 11/1, and the auditor accepts that. You don't want to fly to Florida to close because you're busy packing and getting ready for the move, so your lawyer signs the closing paperwork. You plan to head to Florida on 12/15 and get back for the holidays. Weather delays your plans, and now you can't get out because of snowstorms. You're rushed after the holidays to make it out. Your nonstop on 12/30 from MSP to TPA is diverted and you land in Arkansas. You don't make it to TPA until two days later because of weather and cascading delays. Since you didn't physically make it to Florida until 1/1, your domicile didn't change until 1/1. You already argued that you didn't have intent to remain in Florida until you closed, so you can't go back now to change the date to a date you were physically present in Florida. And now you owe Minnesota taxes on that $10m. (This is a slightly modified fact pattern from a case I had a couple years ago, so these kinds of things do actually happen).
BernardShakey
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Re: Change residence from Minnesota to Florida

Post by BernardShakey »

Mr. Potter wrote: Tue Jan 24, 2023 7:51 am We have been thinking about this for awhile and are now looking for properties in Florida. Since our only grandchild is there it’s tough to be 1,000 miles away. Anyhow, we are planning to keep our home in Minnesota and purchase another home in Florida. Obviously we would make Florida our primary residence to save on taxes. A quick run of my numbers puts an extra $1k in our pocket every month. For those who have done this if we purchase a home, open a local bank account, switch our drivers license, register to vote, spend 183 days in Florida per year we should be good. Or is there more to this ?
The costs associated with owning and maintaining two homes, and the travel costs, should be carefully considered.

Additionally, check out the thread today on insurance costs and be sure to take a look at the impact. Auto, homeowners, umbrella, etc.

Good luck!
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Re: Change residence from Minnesota to Florida

Post by lws »

galawdawg wrote: Tue Jan 24, 2023 8:31 am Do you have someone near your Minnesota home that will serve as a caretaker? Assuming you spend much of your time in Florida during the winter, don't overlook the issues that can arise from having a vacant home in a state like Minnesota during the harshest months of winter. That is the case even if you winterize.
May need a caretaker for the Florida place too.
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Re: Change residence from Minnesota to Florida

Post by galawdawg »

lws wrote: Tue Jan 24, 2023 11:47 am
galawdawg wrote: Tue Jan 24, 2023 8:31 am Do you have someone near your Minnesota home that will serve as a caretaker? Assuming you spend much of your time in Florida during the winter, don't overlook the issues that can arise from having a vacant home in a state like Minnesota during the harshest months of winter. That is the case even if you winterize.
May need a caretaker for the Florida place too.
Good point. Somebody has to install that plywood over the windows and stack the sandbags around the doors! Not to mention the post-storm cleanups...
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Re: Change residence from Minnesota to Florida

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Mr. Potter wrote: Tue Jan 24, 2023 7:51 am We have been thinking about this for awhile and are now looking for properties in Florida. Since our only grandchild is there it’s tough to be 1,000 miles away. Anyhow, we are planning to keep our home in Minnesota and purchase another home in Florida. Obviously we would make Florida our primary residence to save on taxes. A quick run of my numbers puts an extra $1k in our pocket every month. For those who have done this if we purchase a home, open a local bank account, switch our drivers license, register to vote, spend 183 days in Florida per year we should be good. Or is there more to this ?
The bolded part is exactly backwards.
Florida has zero requirement to spend time in FL for domicile/residency purposes. Here's a link to FL statutes for establishing domicile. CTRL-F for '183 days' gives zero results. https://www.flsenate.gov/Laws/Statutes/2012/222.17

Pretty good overview here- https://www.alperlaw.com/florida-asset- ... residency/

What you want to avoid at all costs is spending 183 days in Minnesota! Florida doesn't have a "183 day rule," but MN (& other taxing states) sure does.

As others have said, the costs of maintaining two houses will almost certainly eat up all or most of the $1,000 you might save. FL homeowners insurance is expensive, so is auto insurance. Also, do NOT assume the previous homeowner's property taxes are a good guide to what your taxes will be for that house. If the previous guy had the homestead exemption in place for many years, your taxes will be much higher- guaranteed!
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Re: Change residence from Minnesota to Florida

Post by talzara »

BernardShakey wrote: Tue Jan 24, 2023 11:40 am Additionally, check out the thread today on insurance costs and be sure to take a look at the impact. Auto, homeowners, umbrella, etc.
Navillus1968 wrote: Tue Jan 24, 2023 5:16 pm As others have said, the costs of maintaining two houses will almost certainly eat up all or most of the $1,000 you might save. FL homeowners insurance is expensive, so is auto insurance.
That's this thread: viewtopic.php?t=395791

After moving from Virginia to Florida, their insurance costs tripled. There are a lot more uninsured drivers in Florida than in Minnesota. There are also a lot more hurricanes in Florida than in Minnesota.
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Re: Change residence from Minnesota to Florida

Post by Yoshida26 »

Once you own a home, file for homestead exemption with your local tax collector. You have to own the home by 1 Jan and file by March I believe. This will give you a tax break on the first 25k of property taxes. Recommend researching it.
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Re: Change residence from Minnesota to Florida

Post by LittleMaggieMae »

Also consider you may need flood insurance in addition to home owners insurance.

You may also have some added expenses the first year for various inspections your insurances may require (wind mitigation) and maybe a house inspection - the insurance company may require you to repair/bring up to code some of the things in your house before they will insure you. I got a list of 15 things that needed to be remedied before my Florida house met the criteria of the insurance company (most of it DIYs and some things I knew I would need to "fix" when I bid on the house.) I think I get hit with the inspection cost and new wind mitigation and flood plain costs every few years. definitely when trying to change insurers.

I'm finding the monthly expenses for my Florida home is a few hundred less than my primary home up north in a state that every one is supposedly fleeing because of taxes. And get this - my Florida house is smaller and not as nice as my up north house.

If you are near the coast - you will most likely be replacing your roof every 15 years. Insurance on a roof older than 15 years is insanely expensive.
You might also opt to not have to deal with hurricane shutters and instead have the windows replaced with high impact windows (or whatever they are called. "hurricane windows".) My house has it's original 70's era windows and storm shutters (that work really well - despite a brush with Hurricane Ian's eye wall - my house's older roof held (lost some shingles) and the wind twisted one of the metal "boards" on one storm shutter the bolt that held that part to the house sheered off - the anchor remained firmly in the wall. It's a good little house. :) The neighborhood trees and the poinciana tree in my back yard got "crew cuts". The top 1/3 of my tree sheered off in a straight line. Instead of rounded top it has an angled flat top side now. it's not jagged. it's flat like someone took a giant chainsaw and just buzzed straight across following a line.

And be prepared for the never ending fight against mold and mildew.


Move to Florida for ALL the good things you will have when you get there. Not solely because you MIGHT pay less in taxes (and not really have any extra money in your pocket.)
Last edited by LittleMaggieMae on Tue Jan 24, 2023 6:06 pm, edited 1 time in total.
tibbitts
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Re: Change residence from Minnesota to Florida

Post by tibbitts »

I'm in a somewhat similar situation myself, and two homes is not the best situation. I probably need to have just one. It sounds like you're not convinced about moving to Florida; have you spent a substantial amount of time there (and away from your home) yet? If not maybe do that for a year without changing residence and see how you feel. Honestly I know people who never really break ties, they're just trying to avoid income tax. Maybe they tough it out for one year and only stay in their previous state for 179 days or something, but after that they're back in their old house for 80% of the year and just don't change their residence back again since the odds of getting caught aren't that great. There's usually some reason that comes up - medical, family situation, etc. - that helps them justify "cheating" for just one year, then another, then another...
Navillus1968
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Re: Change residence from Minnesota to Florida

Post by Navillus1968 »

LittleMaggieMae wrote: Tue Jan 24, 2023 5:45 pm Also consider you may need flood insurance in addition to home owners insurance.
If your new house requires FEMA flood insurance, that will eat fairly deeply into your $1k/month savings just by itself. Flood insurance is $$ & getting more expensive. Unless you really want to live near or on the water, buy in a zone where flood insurance isn't required.
I live on the water in FL & the dolphin/manatee sightings off my dock are amazing. Ditto for being able to launch my boat from a lift in my backyard rather than drive 25 minutes to/from a marina where I'm paying slip fees. Is all that worth the >$3000/year (& rising) flood insurance & the risk of flooding from the next Hurricane Ian? Ask me in 25 years & I'll have a solid answer. Hopefully, you won't need a Ouija board...
You may also have some added expenses the first year for various inspections your insurances may require (wind mitigation) and maybe a house inspection - the insurance company may require you to repair/bring up to code some of the things in your house before they will insure you. I got a list of 15 things that needed to be remedied before my Florida house met the criteria of the insurance company (most of it DIYs and some things I knew I would need to "fix" when I bid on the house.) I think I get hit with the inspection cost and new wind mitigation and flood plain costs every few years. definitely when trying to change insurers.

I'm finding the monthly expenses for my Florida home is a few hundred less than my primary home up north in a state that every one is supposedly fleeing because of taxes. And get this - my Florida house is smaller and not as nice as my up north house.
If you are near the coast - you will most likely be replacing your roof every 15 years. Insurance on a roof older than 15 years is insanely expensive.
You might also opt to not have to deal with hurricane shutters and instead have the windows replaced with high impact windows (or whatever they are called. "hurricane windows".)

And be prepared for the never ending fight against mold and mildew.

Move to Florida for ALL the good things you will have when you get there. Not solely because you MIGHT pay less in taxes (and not really have any extra money in your pocket.)
:thumbsup Florida is awesome, but I wouldn't recommend moving here unless your prime reason is "I want to live in Florida." If 90% of your reason is saving MN taxes, you're likely to be frustrated, especially if you maintain two houses. Plus, your grandkids' parents might move someplace else- where would that leave you?
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Re: Change residence from Minnesota to Florida

Post by bsteiner »

Mr. Potter wrote: Tue Jan 24, 2023 7:51 am We have been thinking about this for awhile and are now looking for properties in Florida. Since our only grandchild is there it’s tough to be 1,000 miles away. Anyhow, we are planning to keep our home in Minnesota and purchase another home in Florida. Obviously we would make Florida our primary residence to save on taxes. A quick run of my numbers puts an extra $1k in our pocket every month. For those who have done this if we purchase a home, open a local bank account, switch our drivers license, register to vote, spend 183 days in Florida per year we should be good. Or is there more to this ?
Domicile is based on all of the facts and circumstances. Being outside Minnesota for 183 days is one factor but there are others. See the discussion of domicile in the New York nonresident audit guidelines: https://www.tax.ny.gov/pdf/2021/misc/no ... s-2021.pdf.
hachiko
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Re: Change residence from Minnesota to Florida

Post by hachiko »

bsteiner wrote: Tue Jan 24, 2023 6:16 pm
Mr. Potter wrote: Tue Jan 24, 2023 7:51 am We have been thinking about this for awhile and are now looking for properties in Florida. Since our only grandchild is there it’s tough to be 1,000 miles away. Anyhow, we are planning to keep our home in Minnesota and purchase another home in Florida. Obviously we would make Florida our primary residence to save on taxes. A quick run of my numbers puts an extra $1k in our pocket every month. For those who have done this if we purchase a home, open a local bank account, switch our drivers license, register to vote, spend 183 days in Florida per year we should be good. Or is there more to this ?
Domicile is based on all of the facts and circumstances. Being outside Minnesota for 183 days is one factor but there are others. See the discussion of domicile in the New York nonresident audit guidelines: https://www.tax.ny.gov/pdf/2021/misc/no ... s-2021.pdf.
The 183 day test is a separate test. It's not part of the domicile factors - it only applies if you're not domiciled in the state.

Also, to clarify, the test isn't being outside Minnesota for 183. The test is about the number of days you're inside Minnesota. Since a part of a day counts, you could be outside Minnesota for 200 days, but still be inside for 210, or even 190.

But again, this isn't related to domicile. And the "time" factor that is a factor in domicile doesn't really apply the same principles as a day count. You could spend more hours in NY than in NJ, but if the hours you're spending in NY are all for work and you're required to be there for work, and the hours you spend in NJ and elsewhere are quality time hours, you could still win on the time factor for an assertion that your domicile is in NJ. The day count for statutory residency is not like that. It's objective and pure fact finding.
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Re: Change residence from Minnesota to Florida

Post by JBTX »

Mr. Potter wrote: Tue Jan 24, 2023 8:34 am I do have one son left in the area that could take care of any home issues, he could even sell his townhouse and live here while we’re gone so we do have options.
If my grandson wasn’t in Florida I wouldn’t be considering this.
As for downsizing, our home is on a cul-d-sac, on a small lake near Mpls/St Paul, very desirable property, I would hate to give it up just to downsize
We have relatives in MnSP area who are looking to get a lake house. They are priced very high, apparently. They saw something in their target range and the house was literally a rotting log cabin.
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