Griffin, Peltz Paying Palm Beach’s Seven-Figure Property Taxes

(Bloomberg) -- 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 $5.4 million tax, while six of his neighbors also face seven-figure bills. Dozens of others pay more than $500,000, according to the paper.

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

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 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 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.

Read more: Richest U.S. counties getting wealthier from Pitkin to Teton

As the size of 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 $350 million building his Florida holdings, the Palm Beach Post reported in September. That includes $99.1 million he paid this year for a beachfront house adjacent to his 17-acre oceanfront estate.

Citadel's press office didn't immediately respond to an emailed request for comment.

Read more: Ken Griffin's $99.1 Million Purchase Adds to Property Empire

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 U.S. 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 neighborhood. Singer Rod Stewart also lives on the island. His property, owned through a trust, is calculated to incur a $533,185 charge.

--With assistance from Amanda Gordon.

To contact the reporter on this story: Tom Metcalf in London at tmetcalf7@bloomberg.net

To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Steven Crabill

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