To move or stay? Is relocation a part of your great reevaluation?

If you’re thinking of moving, factor in these financial issues

Editor’s note: This is part one in a six-part series on the great reevaluation business owners and executives are experiencing this year.

Remote work opportunities made suburbs more desirable again, according to Zillow Research, which led to housing scarcity in several cities. The home shortage is driving up prices, making it an attractive time to sell. But, where would you go?

The pandemic gave people time to rethink their housing needs, both what and where. While dreaming about your next home is fun, moving requires a lot of research and planning.

• Are you close enough to family and support?
• Do you have enough space to comfortably work and live at home?
• If commuting wasn’t an issue, where would you want to live?

And beyond that, what can you afford? Think through these financial and tax considerations before making an offer:

Taxes liabilities

Nearly 60 percent of U.S. workers who can work remotely continue to do so all or most of the time, according to a recent Pew Research Center study. One major reason: About 17 percent of workers said they’ve relocated away from the area where they work – up from just 9 percent in 2020. 

Be careful, though. An upgraded office could come with extra tax liabilities. For example, a state can tax income you make from sources within the state, even if you’re not a resident. And the home office you invested in won’t be a tax deduction if you return to work. That benefit is only available to business owners.

Make sure you understand sourcing rules that apply to your income (including income from business sales or the sale of tangible property) to evaluate the tax impact of moving. States have different estate tax rules and incentives to retain residents, too. Ask a tax advisor to calculate the potential tax liability and the pros and cons of moving.

Domicile vs. residence

Maybe you’re considering getting a second house for extended work-from-home trips or even retirement. In that case, you need to understand the legal difference between a domicile and a residence.

Legally, you can have multiple residences in multiple states, but only one domicile. Your domicile is your “true home” – and the place where you’re obligated to pay taxes.

It’s tempting to claim a state with a lower tax rate as your domicile. But if you can’t produce compelling proof that you live and invest in the state, you may end up owing taxes in both places. The rules for residency vary by state, so it’s important to research the requirements and to track where you spend your time.

Budget impacts

Your new neighborhood may have higher property taxes or insurance rates (and thus premiums). Or, it may come with additional expenses you don’t have today, like a club membership, golf cart or lift tickets. Someone will need to maintain the property too if you’re not planning to live in it year-round.  

All these expenses need to be factored into the cost of moving, plus the cost of adding (or relocating) vehicles, tools, appliances, furniture and household goods.

Being able to afford a new home isn’t enough. You need to budget for activities, amenities and the lifestyle that you want to have, too.

Longer-term tradeoffs

When you buy a second property or upgrade your space, you’re redirecting money from other financial goals. Will a home purchase change how much you can contribute to a child’s education, or delay a retirement goal? Evaluate the home purchase among all your financial goals; then prioritize and evaluate the impact.

A certified financial planner can help you calculate the impacts, refine your financial goals and figure out how to achieve them. Working with a tax and financial advisor together, you can determine the most prudent and tax-advantaged avenues to meet your goals.

How we can help

Working from home can blur the lines between what’s business and personal. The truth is, it’s all interconnected.

That’s why it helps to work with a partner for your entire financial life. Our integrated services and team can bridge the gaps between your financial, business and personal priorities.

We make sure tax, estate, business transition, retirement and wealth management plans are aligned with your personal and professional goals. Learn how on our private client services web page.

About our series

Have you been thinking changing your life? You are not alone. Millions of other Americans are also weighing whether or not to change their future in what has been called “the great reevaluation.” From careers to finances and to families, our team provides guidance to help you make that decision. Learn more on and see other parts of our series on our Great Reevaluation series web page.