California to Florida: tax savings, hurricane costs, the math

§ I · The Headline

A retiree with $1.5M of brokerage gains saves around $190,000 in California capital gains tax

§ III · Property Tax

Property tax: Prop 13 vs Save Our Homes

California's effective property tax rate is approximately 0.71 percent, ranking 35th of the 50 states (Tax Foundation 2024). Proposition 13, passed in 1978, caps the assessed value of a property at the purchase price and limits annual increases to 2 percent or the inflation rate, whichever is lower. A long-time California homeowner often pays property tax on an assessed value 50 to 80 percent below market value. New buyers in California pay tax on the full purchase price; the Prop 13 advantage builds slowly over years of ownership.

Florida's effective property tax rate is approximately 0.86 percent, ranking 24th of the 50 states. The Save Our Homes (SOH) cap, passed by Florida voters in 1992, limits annual assessed value increases to 3 percent or the CPI, whichever is lower, for homesteaded primary residences. Florida also offers a $50,000 Homestead Exemption (two stacked $25,000 exemptions). For long-term Florida homeowners, the combined effect of SOH plus the homestead exemption produces protection broadly comparable to Prop 13, though slightly less generous (Prop 13's 2 percent cap beats SOH's 3 percent cap when inflation is meaningful).

For someone selling a Prop-13-protected California home and buying a fresh Florida home, the property tax delta in year one is meaningful. A California homeowner paying tax on an assessed value of $300,000 (purchase price plus 25 years of 2 percent caps on a $200,000 1995 buy) is paying approximately $2,130 per year. Buying a $500,000 Florida home means paying property tax on the full $450,000 assessed value (after Homestead Exemption), or approximately $3,870 per year. The first year of Florida ownership is around $1,740 more expensive in property tax than the last year of California ownership for that comparison. SOH protections then start working in your favour.

§ V · Estate Tax

Estate tax: both states have none, but Florida wins on inheritor treatment

Neither California nor Florida has a state estate or inheritance tax. The federal estate tax exemption is $13.99 million per individual / $27.98 million per married couple in 2025 (the $13.61M / $27.22M 2024 figures plus the inflation adjustment). For estates below those thresholds, neither state imposes any estate-level tax. The federal exemption is scheduled to sunset in 2026 to roughly $7 million per individual unless Congress acts; both California and Florida residents are equally affected.

The subtler advantage in Florida is for inheritors. California Proposition 19, passed in 2020, sharply restricted the parent-to-child Prop 13 transfer rules. Before Prop 19, California parents could transfer a primary residence to a child without triggering reassessment, regardless of the child's intended use. After Prop 19, the inheritor must use the property as their own primary residence within one year and the property must be worth no more than the parent's assessed value plus $1 million; otherwise the property is reassessed to current market value. For California families with an inherited high-value home that the child wants to rent out or use as a vacation home, the property tax bill can jump from a few thousand dollars per year to tens of thousands.

Florida has no comparable restriction. Inherited Florida property is reassessed to market value upon transfer, but the homestead exemption and SOH cap restart at the inheritor's homestead application. There is no parent-to-child special rule because the underlying tax structure does not need one. For estate planning purposes, owning Florida property at death is cleaner than owning California property at death for non-primary-residence inheritors.

§ VII · Residency Setup

Establishing Florida residency from California

Florida is generally easier to establish residency in than Texas, because Florida actively offers a Declaration of Domicile filing (FL Statute 222.17) that creates a public record of intent. The Declaration is filed at the circuit court clerk in your Florida county, costs typically under $25, and is one of the strongest single pieces of audit-defence evidence available. California's Franchise Tax Board still applies its 11-factor test from the California side regardless, so the move must be substantively complete, but Florida provides the cleanest paper trail.

Key actions, in order: file the Declaration of Domicile (week one); obtain a Florida driver's licence within 30 days of establishing residency (FL Statute 322.031); register your vehicle within 10 days of taking employment or 90 days of residency (FL Statute 320.02); register to vote in Florida and cancel California registration; spend at least 183 days in Florida per calendar year (Florida has no statutory rule but California's 11-factor test counts heavily on physical presence); apply for the Homestead Exemption by March 1 of the year following purchase; update estate documents to reference Florida domicile.

For the cleanest move, sell the California home (or rent it out at fair market value through a property manager, not friends or family). Cancel California club memberships, professional associations, safe-deposit boxes. Move primary care physician, dentist, attorney, accountant to Florida. Update brokerage account address, employer payroll, and all deferred-compensation custodians to the Florida address. File a final California 540 (part-year resident) for the move year, allocating income between California and Florida based on the residency change date. See the full Florida residency guide for the detailed checklist.