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Billionaires pay seven-figure property taxes for Palm Beach homes

London

FOR most Americans, seven figures would buy them the home of their dreams. For seven Palm Beach homeowners, that's a year's property tax.

The eye-watering levies underline the Florida enclave's status as a top destination for America's wealthiest people. Citadel founder Ken Griffin tops the ranking compiled by the Palm Beach Daily News with a US$5.4 million tax, while six of his neighborus also face seven-figure bills. Dozens of others pay more than US$500,000, according to the paper.

The names are a Who's Who of prominent business figures. Dealmaker Nelson Peltz ranks second with a US$2.2 million charge followed by US$1.4 million for KKR & Co's Henry Kravis. President Donald Trump's Mar-a-Lago Club and adjacent homes ranks eighth with a US$979,339 bill, followed by radio personality Howard Stern at US$962,385.

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The figures illustrate Florida's bulging population of billionaires. Dozens of tycoons have made the state their home, often plumping for a property on Palm Beach, the 18-mile (29-km) long barrier island that first made its name as a resort in the late 19th century.

Its cachet has steadily grown since, bolstered by Florida's mushrooming appeal to figures like Carl Icahn, who is planning to move his home and business to the state next year. Fellow financiers David Tepper and Paul Tudor Jones have already relocated, while Mr Trump made it his primary residence this year.

Palm Beach's allure hasn't been diluted by some notorious residents. Fraudster Bernie Madoff owned a mansion on the island and convicted sex offender Jeffrey Epstein sexually abused dozens of young girls at his Palm Beach home for years.

As the size of Mr Griffin's tax bill suggests, his property holdings stand out compared with even the grandest beachfront estates that dot the island. The hedge fund executive has spent at least US$350 million building his Florida holdings, the Palm Beach Post reported in September. That includes US$99.1 million he paid this year for a beachfront house adjacent to his 17-acre (6.9-heactare) oceanfront estate. Citadel's press office didn't immediately respond to an emailed request for comment.

Florida's year-round sunshine and lack of a state income tax has helped it lead the nation in attracting new residents, with 808,789 arriving in 2018, according to US Census Bureau data released last month.

For many of those on the list, the absence of state income tax should more than make up for the size of their property taxes. That's helped Palm Beach morph from a storied second-home location to a place where high-net-worth individuals now make their primary residence.

This concentration of some of America's wealthiest people has supported a clutch of cultural, hotel and restaurant openings. Bill Koch called it "Fantasy Island". For those billionaires with a musical bent, there's another advantage to the neighbourhood. Singer Rod Stewart also lives on the island. His property, owned through a trust, is calculated to incur a US$533,185 charge. BLOOMBERG