Young Australians Are Looking at the US for Lower Taxes and Cheaper Wealth Building, One Buyer Says

Talia Stafford just bought her first block of land in inner Melbourne, but the 22 year old, who works in AI consultancy, says a growing number of her friends are looking well beyond Australia for their next move. She estimates around eight people in her circle are planning to relocate to the United States within the next three years.

Stafford says the appeal comes down to wanting to earn more and feel financially comfortable earlier in life, ideally before starting a family. She points to Republican led states such as Texas and Florida, which charge no state income tax at all. Texas currently ranks first in the country for individual tax competitiveness, according to the Tax Foundation.

Lower income tax, higher costs elsewhere

Stafford acknowledges the trade off is not simple. States without income tax typically make up the difference through higher property taxes, sales taxes, corporate taxes and steeper healthcare costs, since the US does not offer the kind of universal coverage Australians are used to. Still, for young workers focused on take home pay, the headline savings on income tax are proving hard to ignore.

Victoria's rising tax load

Back home, Stafford lives in Victoria, which she describes as the highest taxing state in Australia, with state taxes up 62 percent since Labor took power 12 years ago. She also points to recent federal budget changes that raised taxes on businesses and investors, arguing that young Australians now have a harder path to building wealth through the share market than their parents did.

Stafford's own answer to the housing squeeze has been to build rather than buy outright. She and her partner picked up a vacant block through a lowball offer and are planning a 400,000 dollar build, combining a roughly 150,000 dollar prefabricated shell with an owner built interior. She expects the permit approval process alone to take about nine months.