The Audit Trail - Why Florida Domicile is at Risk

The Audit Trail: Why the Public MLS is a Risk to Florida Domicile

For high-net-worth individuals relocating to Florida, the process of buying or selling property should be a confidential, strategic move. Instead, many find that the very tool used to sell their home—the Multiple Listing Service (MLS)—becomes a public ledger that exposes them to significant financial risk.

At Sea Crown Estates, we believe that transparency is mandatory in business, but public disclosure is voluntary. When dealing with the defense of a multi-million-dollar tax liability, choosing a private sale is the first line of defense.

The MLS: A Public Record for State Auditors

The moment a property is listed on the MLS, that information ceases to be private. It is syndicated across thousands of public websites, archived by data providers, and, crucially, becomes a public record.

For state auditors from high-tax jurisdictions (like New York or California), this public data is not a minor detail—it is the foundational evidence used to launch a residency challenge.

How MLS Data is Used to Attack Your Residency:

1. Identifying New Assets: A listing for a $\$10$ million primary residence in West Palm Beach immediately flags a former resident as having a significant "center of life" established in Florida. Auditors use this to trigger an initial review of the taxpayer's exit strategy.

2. Establishing Intent (Or Lack Thereof): If the client lists their previous Northern property for sale, the MLS data confirms their intent to move. However, if the client lists their Northern property for rent (or lists it as a secondary home), auditors use this MLS data to argue the move to Florida was temporary or that the former state remains their true domicile.

3. Pricing Scrutiny: Auditors can compare the purchase price of the Florida property against the sale price of the Northern property. Inconsistent pricing or complex entity transfers (like trusts or LLCs) are red flags that are easily identified when MLS records are cross-referenced with public property deeds.

The Problem of Digital Permanence

The most insidious risk of the MLS is digital permanence. Even after a property sells and the MLS listing is archived, the data—including price history, photos, and listing notes—remains accessible through various data aggregators. You cannot retroactively scrub this public record.

For the client who values discretion, the MLS is the opposite of the "Silent Sale." It is a mandatory public performance of their most significant financial move.

The Vault: The Confidential Alternative

At Sea Crown Estates, our "Vault" strategy is the direct antidote to the audit risk created by the MLS.

• No Public Fingerprints: We manage transactions as Office Exclusive listings, introducing the property only to a highly curated, financially vetted network of buyers, investors, and family offices.

• Privacy Protected: The sale history, price, and client identities are kept confidential, ensuring the property's acquisition or disposition cannot be used as an immediate evidence point by a state tax auditor.

• Compliance Integration: Our process is specifically designed to align with the advice of our partners (CPAs and Estate Attorneys) to de-risk the domicile transition for the client.

In the luxury market, choosing a brokerage that guarantees discretion is not a luxury—it is a critical component of financial and legal risk mitigation.

Contact us for a confidential discussion on securing your next acquisition or disposition.

Important Disclaimer Gail Kennell and Sea Crown Estates are licensed Florida real estate brokers, not tax attorneys or CPAs. Nothing in this article constitutes tax or legal advice. All 1031 exchange and Delaware Statutory Trust strategies must be reviewed and approved by your own qualified tax and legal advisors before implementation.

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