Great Places to Live and Retire Overseas
Author: Phillip Townsend
Published: 2010-06-02 : (Rev. 2016-03-27)
Synopsis and Key Points:
Americans and Europeans are being lured abroad by a lower cost of living and higher quality of life.
Ever dreamed of owning a foreign vacation home, living or retiring in an exotic land? You're not alone. An ever increasing number of Americans and Europeans are being lured abroad by a lower cost of living and higher quality of life.
Some are returning to their ancestral countries or to places where they once vacationed, worked or studied. Others are being enticed by generous retiree perks and attractive tax incentives. Outside of reading about it, you probably have never given the notion any serious thought. These beautiful and affordable slices of paradise could change your mind.
The advent of fast Internet communication and inexpensive air travel makes it easier to turn any far-flung paradise into a permanent home. Which places in the world have the most to offer? The perfect place to live or retire, of course depends on your idea of perfection.
I'm taking a different approach for this article.
Instead of giving an overview of the better-known and increasingly-popular expatriate destinations around the world (Mexico, Costa Rica, Belize, Panama, Nicaragua, Ecuador, France, Spain, Portugal, Italy, etc.), I've decided to introduce you to the below locales you probably don't know much about. All offer affordability and abundant recreational and cultural opportunities.
Not all expatriate destinations are created equal. If you're on a budget, tired of crowded beaches and packed supermarkets, love seafood, and have a 19th-century mindset, you may want to consider Nova Scotia, the Canadian province which is becoming one of the most sought after vacation home and retirement havens in North America.
Nova Scotia is beautiful. With some of the world's most beautiful scenery, it boasts something for every taste: historic small towns, picture-perfect countryside, and a bustling capital with attractive suburbs, not to mention 3,600 miles of enchanting coastline dotted with charming fishing villages, inexpensive lots to build on, and opportunities for outdoor recreation of virtually every type. Deeply steeped in Scottish, Irish and Acadian (creole) heritage, the province feels like New England 100 years ago, and the entire province's population is less than one million so the place is anything but crowded.
But that's not all. With government-funded healthcare, comfortable spring and summer temperatures (with milder and less snowy winters than many northern U.S. states) and real estate prices considerably lower than anything on the coast in the United States, Nova Scotia is well worth considering. The growing American and European expat population obviously agrees.
For Sale: Your own slice of the breathtaking coastline and tens of thousands of acres of quaint countryside at unbelievably low prices. Live like a prince in a peaceful and private haven. Enjoy universal healthcare, friendly people and Cuban cigars (they're legal here). All this in a pristine, under-developed storybook setting. But hurry...the word is out now (you're not the only one reading this article).
Inexpensive real estate, a low cost of living, breathtaking scenery and First-world perks should put Panama at the top of your list if you're considering living or retiring abroad.
Home to Central America's most vibrant and attractive capital (Panama City), Panama is slightly larger than the state of Florida. Bordered by the Caribbean Sea and the Pacific Ocean, it is one of those places that can seduce you through its sheer natural beauty. The seemingly endless stretches of picturesque coastline, lush green valleys, near-perfect weather and friendly people make it one of the most livable places in the world. If you like Florida and the Caribbean, you'll love Panama.
Outside of its scenic charms, Panama is one of the best places anywhere for expatriate and retirees today, offering one of the world's best discount programs for retirees. AARP rated Panama "the fourth best retirement place in the world." When stacked up against traditional Latin American retirement havens such as Mexico, Costa Rica and the Dominican Republic, Panama has more amenities, lower costs, and less crime, red tape and government interference.
In addition, Panama has put together an impressive list of incentives to attract newcomers, including:
Expatriates who buy or build a new home pay no property taxes for 20 years.
No taxes on foreign-earned income (Social Security, pensions or business profits).
Investments in the tourism industry are exempt from import duties, construction materials and equipment costs, and income, real estate and other taxes for a period of 20 years.
The pensionado (retiree) program
You don't need to be retired to qualify for the program (anyone over 18 may apply for benefits). The only requirement is a guaranteed income of $500 per month ($600 for a couple). It must be a pension from a company or government agency (e.g. Social Security, disability, military pay, etc.). After becoming a Panamanian resident "pensioner," you are immediately eligible for the most comprehensive program of expatriate benefits in the world, including discounts on everything from doctor's visits and mortgage closing costs to restaurant meals and entertainment (movies, theaters, concerts, sporting events, etc.).
Other perks of life in Panama are its proximity to the US (only a 21/2-hour flight from Miami), the US dollar is the de facto currency, and English is widely spoken and understood in major cities (Spanish is the official language).
Right now, the three best places to purchase real estate in Panama are Panama City, the capital which boasts First-world infrastructure and is home to virtually every large American brand-name chain; Boquete, a scenic and growing expatriate hideaway in Panama's mountainous region; and the Pearl Islands, a chain of over 90 islands and 130 islets in the Caribbean.
The Caribbean is synonymous with hedonism - from the popular tourist Mecca of the Bahamas to the off-the-beaten-path divers' paradise of Bonaire. What you might not know about the Caribbean, however, is that it's also home to one of the most appealing - and inexpensive destinations in this hemisphere. So if you're searching for a tropical paradise as it should be, duck the crowds and head to Dominica.
With no direct flights from North America or Europe, Dominica is welcome retreat of peace and quiet in the Caribbean's sea of mass tourism. Roughly halfway between Martinique and Guadeloupe, the island is splendidly underdeveloped. A land of waterfalls, rivers (365 of them), hot springs, and lush rain forests, Dominica is the Caribbean's most rugged isle. Instead of luxury resorts and long stretches of crowded sand, you'll find volcanic mountains, intimate beaches, little-explored reefs and charming small hotels.
And if you think that living in the Caribbean full- or part-time is a luxury only A-list celebrities can afford, think again. Dominica's prices are refreshingly down-to-earth: A modest but comfortable home can be built for as little as 25K (naturally, you could pay much more, but why bother).
Almost everyone has had dreams of living a laid-back, stress-free life on a tropical island. One by one, the Caribbean islands were discovered and eventually became sadly over-developed, terribly over-crowded, and ridiculously over-priced. Unfortunately, due to mass tourism, most places in the Caribbean have become little more than artificial, tropical Disneylands with luxury hotels and all-inclusive resorts. But there is one place that still maintains its original charm and natural beauty. This place is quite inexpensive (by Caribbean standards) and is virtually unspoiled. Relatively undiscovered, here, you can still find ocean view lots for as little as $22,000 and have a small cottage built for prices starting at $25,000. To protect it from the fate of its Caribbean cousins, I won't reveal the name of this special place just yet. You can find a link to more information at the end of this article. Cuba Think Cuba, and vivid images come to mind: of men in Guayabera shirts and Panama hats, tropical breezes and cool drinks, steamy Latin rhythms and sultry women. It has always been an intriguing place, steeped in truth and in fiction by the novels of Ernest Hemingway. Because travel to Cuba is restricted by the U.S. government, relatively few Americans visit the island each year. While their counterparts from Europe, Canada and Latin America bask in the warm Cuban sun, most U.S. citizens can only hope to experience this "pearl" of the Caribbean after Castro is gone. Of those who do manage to get to Cuba via Mexico or Canada, few are disappointed. The largest Caribbean island (pop. 11 million), Cuba is also one of the most beautiful and unspoiled. There are miles of pristine, underdeveloped beaches, tropical forests teeming with wildlife and some of the best deep-sea fishing, scuba diving and snorkeling the world has to offer. And there is Havana, not only the capital of Cuba, but also long the most important city in the Caribbean. With tourism once again thriving, Havana has regained much of its past allure. Famous old bars, restaurants and hotels are enjoying a proud comeback, and stunning new places are being built. As one taxi driver put it, "We have the best cigars, best rum, best music, and most beautiful women in the world. What more could anyone want"
Best known for Transylvania, the legendary home of Count Dracula, Romania is steeped in history, myth and folklore. Unlike other Eastern European countries with Slavic origins, Romania, whose name means 'land of the Romans,' absorbed much of the culture, religion, and language of the Roman Empire. Bordered by the Black Sea (which is being called "The Next Riviera") and the Danube River, with the Transylvanian Alps and Carpathian Mountains nestled in the center of the country, Romania has long stretches of seacoast, mountains, forests, medieval villages and gothic castles galore, giving it all the makings of a fairy-tale setting. The capital Bucharest, a former communist citadel, has a growing number of discos, while restaurants at most major hotels double as nightclubs, there are several Parisian-style cafes, and cheap wines and plum brandy flow freely everywhere. Due to its wide boulevards, sidewalk cafes, and Triumphal Arch, Bucharest, was known as the "Paris of the Balkans" prior to World War II. Today the city's 19th century neoclassical architecture and numerous tree-lined streets still maintain its charm. A sizable enclave of foreigners (Germans, Jews, Turks, Russians, Ukrainians, Serbs, Croats, and Gypsies) live in Romania. French is the most widely-spoken second language and English is spoken by many of the younger generation. The real estate prices are some of the lowest in all Europe (the country's economic woes spells opportunity for you).
Asia's best-kept secret for expatriates, Malaysia has a vibrant mix of foreign and indigenous tribal cultures, creating a veritable melting pot of peoples, traditions and religions. A sizable enclave of foreigners (Brits, Americans, Australians, and Canadians) live full time or maintain holiday homes in Malaysia, and you'll find that just about everybody speaks English, since its compulsory in local schools. Not only are three world-class playgrounds (Thailand, Bali, and the Philippines) all within a few hour's travel from Malaysia, but miles of beaches and numerous coastal islands add to its tropical appeal. Despite being the capital of a developing nation, Kuala Lumpur is a modern cosmopolitan with clean streets and every modern convenience to found in New York or London. Compared with other major Asian cities (Tokyo, Singapore, and Hong Kong, for example), Kuala Lumpur is downright cheap. The cost of 2-bedroom rental apartments begins at around $225 per month and 3-bedroom houses start at $35,000. Naturally, comparable housing in expatriate communities or the luxurious homes that date from British colonial period can set you back considerably more.
Imagine an interesting land of breathtaking and contrasting scenery: craggy coastlines, golden beaches, lush forests, snow-capped mountains, bubbling volcanic pools, fish-filled rivers and glacier-fed lakes, all beneath a brilliant blue sky. New Zealand is accessible, spread over three relatively small islands with modern and efficient transport, quiet roads, plenty of flights and two stunningly scenic rail journeys. Other pluses are friendly, English-speaking people, virtually no crime, and a trio of rich cultural influences: adventurous Polynesian navigators (Maori), pioneering European settlers who followed a thousand years later, and modern Pacific Rim immigrants. The plant and animal life are unmatched, giving opportunities for close-up experiences with bird-life (including kiwis), seals, dolphins and whales. Enjoy the chance to explore two of the richest wine regions on the planet, taste wonderful cuisine, stroll on sandy beaches. Prefer urban living? Immerse yourself in the culture of the capital Wellington or the large cities of Auckland or Christchurch.
Many people tend to associate African countries with wars, famine and political unrest rather than the good life, but Zanzibar, Tanzania is an exception. Located only a short distance off the east coast of Africa, exotic Zanzibar has lured explorers, traders and colonists for centuries. The islands' powdery white sand beaches, swaying palm trees and turquoise waters continue to attract European and Asian tourists. Outside of an unusual mix of black African and Arab cultures, you'll find the islands teeming with tropical forests, remote villages and idyllic coastline. Despite flare-ups between residents of Zanzibar Island and the smaller island of Pemba (due to differing views on unification with the mainland), Zanzibar is usually quite stable. Cheap real estate (oceanfront or raw land with fruit trees), mouth-watering seafood, some of the world's best scuba diving, and pure tropical bliss make it an attractive expatriate haven. A few wealthy Europeans and African aristocrats have already made Zanzibar and mainland Tanzania home. Why not join them
What You Should Know Before Buying Abroad
1. Do your homework.
Familiarize yourself with the laws and customs of the country. Research the tax codes, currency restrictions, and the qualifications for residency. Having a local attorney is a must. Ask your real estate agent or a fellow expatriate to recommend an attorney. The local American embassy can also provide a list of referrals. If you plan of purchasing property in a place where English is not the official language, you should insist on a bilingual lawyer who is able to translate all relevant legal documents.
Find out the specifics about your new home-to-be: from the local political and economic situation to the daily cost-of-living. The last thing you want is to sink money into a place that's unstable. Check out the U.S. State Department's site, www.state.gov, for up-to-date assessments of virtually every country.
3. Finding a realtor.
Once you're ready to look at property, you'll need to find a competent local real estate professional. There are many horror stories of people who have either dealt with either unscrupulous or misinformed parties, costing them thousands of dollars (and in a few cases, their entire investment). Don't be one of those who learn the hard way. Some U.S., UK and Australian firms have representatives or pre-screened affiliates abroad. In some countries (Mexico, Honduras and Bali, for example), real estate agents are not required to be licensed and con artists abound, waiting to prey on cash-rich foreigners. A good resource for competent real estate professionals is the International Real Estate Contacts list, which is available at: www.thegloballife.net.
4. The process.
While every place has it own set of rules and nuances, the process of buying abroad generally works like this: First, the buyer and the seller to agree on a price, a security deposit (generally, 10 to 25 percent) will probably be required to take the house off the market. Your attorney should then receive a copy of the title and verify that the property is free from any liens or claims against the property. They should also advise you of any strange archaic laws, like those in parts of Canada that allow anyone to fish on your land, those in England and France that allow sheep to pass through your property, those in rural Italy that give your neighbors first-refusal rights on any land used for agricultural purposes (which could leave someone else with the fruit in the vineyard or olive grove on "your" property), or historic construction bans that prevent you from making any external changes to a property (even installing a pool). Also, if you are buying anything in need of restoration (or more than a hundred years old), have a structural survey done.
Financing your dream home may not be possible abroad. Your U.S. bank will only lend you the money for your foreign abode if you're willing to use other assets for collateral, like your existing home or automobile, CDs or brokerage account. Some foreign banks will extend a mortgage once you've opened an account, but most likely, you will have to pay cash. If you decide to open a foreign bank account, you must report its existence to the U.S. Treasury Department. The IRS recently warned U.S. expatriates that they risk up to a $10,000 fine or 50 per cent of the value of the account if they fail to report overseas bank and financial accounts. For details, get IRS Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad online at www.irs.gov/publications/p54/index.html.
6. A word of caution about renting.
You may be considering offsetting costs by renting out your foreign home while you're not there or setting it up as a short-term vacation rental. While the extra income can be a big bonus, countries such as Mexico and France have strict eviction laws (in France it can take up to 3 years to evict tenants who decide to stay without paying, unless you demonstrate to the courts that you've found your tenant a suitable similar rental to move into).
7. About taxes.
If you make a decision to rent out your property, you will be required to report rental income on your U.S. tax return (you may also be required to do the same with your "new" country of residence). Since the United States has reciprocal tax treaties with dozens of countries, you probably don't have to worry about double-taxation, since any amount paid abroad will be credited against your U.S. tax bill. If you work abroad, you may even be able to sidestep Uncle Sam altogether by qualifying for the $80,000 foreign income exclusion (and by writing off the maintenance expenses on your new home). If you decide to sell your foreign property, be aware that capital gains taxes in some countries can reach as high as 40 percent. I suggest soliciting the help of an international tax specialist for information about your own situation. A top U.S. expert is: Jane Bruno, the author of The Expat's Guide to US Taxes. She can be reached at (561) 222-9273.
8. Legal matters.
After making your purchase, you should be sure to draft a local will to ensure your property is passed along to your heirs. Complicated legal and financial issues, strange covenants, and squatters could make that villa in the south of France or farmhouse in Tuscany seem like more trouble than it's worth. If you do your homework and hire the right people, your foreign purchase should be smooth sailing.
Phillip Townsend, an international relocation consultant, is the author of Passport to Canada: The Complete Guide to Living and Retiring in Nova Scotia, and the special report The Caribbean's Best Kept Secret. His website is www.nsliving.info
*All prices in US dollars.
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