In terms of bang-for-your-buck, it can be one of the single biggest ways expats save when retiring overseas
BALTIMORE (PRWEB) October 12, 2017
In the United States, single-family home owners pay an average of $3,296 in property taxes a year. In some states—like New York, New Jersey, Massachusetts, Texas, Virginia, Connecticut, and California—the average is $7,000 a year…and higher.
By contrast, many overseas retirement havens have extremely low property-tax rates, which contributes to the relatively lower cost of living in places like Belize, Mexico, and Nicaragua. Expats report slashing their property tax bills by as much as 99% when going overseas.
“If you’ve been paying $5,000 a year in property taxes in New Jersey, say, and you can move to country where you buy a place and the taxes set you back less than $100 a year—that puts $4,900 worth of cash in your pocket that you can spend any way you want—or save for a rainy day,” says Jennifer Stevens International Living Executive Editor. “In terms of bang-for-your-buck, it can be one of the single biggest ways expats save when retiring overseas.”
For example, in these three countries—which regularly get high marks in International Living’s annual Global Retirement Index—expats report they pay a small fraction of what they did in the U.S. in property taxes...
“Property taxes in Belize are ridiculously low when compared to those in the United States,” says Ann Kuffner, IL Belize Correspondent. “I’ve interviewed a number of expats who own three-bedroom houses, on half-acre properties, with a view of the bay in Corozal, and with river views in the Cayo District. None of the expats I’ve interviewed pay more than $50 per year for property taxes in Belize. And those I’ve interviewed who own two-bedroom, two-bathroom beachfront condos on the Cayes, with a Caribbean Sea view, pay less than $300 a year for property taxes.”
Mark and Jackie Baker moved to Belize full time in 2014 from Arizona. They live in Cristo Rey, a bucolic village in the Cayo District. It’s a region of meandering rivers, productive Mennonite farmland, and dense rainforest where howler monkeys patrol the canopy as exotic birds flit by. This is also the Mundo Maya, the center of the ancient Maya culture in Belize, with amazing palaces and other archaeological sites to enjoy.
“Our land taxes are only $5 a year, so we pay five years at a time,” says Mark. Our property taxes in Arizona were $8,400 a year!”
Property taxes in Mexico are similarly low. Each state within Mexico sets its own property-tax rate. But the tax on the average home or condo rarely comes to more than a few hundred dollars per year. As a result, many U.S. citizens save thousands every year on property tax with a move to Mexico.
Gary DeRose says, "My annual property taxes in Merida are $100. Compare that to the $11,000 I paid in San Francisco a decade ago."
Scottie and Jim Watson, 72 and 70, respectively, have lived in Playa del Carmen for six years. They live in a modern condo building just off the beach and a quick walk from the main street of Quinta Avenida. They have a pool right outside their sliding glass doors.
“It’s less expensive to exist down here,” says Jim, who reports they pay just $200 a year in tax on their condo. “[That’s instead of paying $6,000 to $8,000 in property taxes. So we indulge ourselves and have a cleaning lady, which we wouldn’t have had in the States.”
In Nicaragua, annual property taxes are approximately 1% of the municipal cadastral value of the property. (The cadastral value of the land is considerably lower than the market-value price of the land when a house is bought.)
“The most unbelievable savings in Nicaragua comes in the form of taxes...or should I say...hardly any taxes,” says Bonnie Hayman, IL Nicaragua Correspondent. “Taxes on my two-bedroom, two-bathroom, ocean view home on half an acre cost me just $141 this year and it goes down every year. There is no tax on income earned abroad and we don’t pay into anything like Social Security unless we own a business.”
And it’s not just low property taxes that can provide expats a way to save when they move overseas. Expats earning abroad and resident full-time overseas can lower their U.S. income tax bill as well. The Foreign Earned Income Exclusion (FEIE) allows a household to earn up to a certain amount from overseas work, report it to the IRS, but pay no U.S. federal tax on it. In 2017, this exclusion is $102,100 per qualifying person. Married couples, if both are U.S. taxpayers working and living abroad, can exclude double this amount. Note that investment income, pensions, and the like cannot be excluded from U.S. tax—only earned income.
Learn more about how expats save on their property taxes in Belize, Mexico, and Nicaragua, in the full story, here: Americans Slash Their Taxes...as Expats Overseas
Editor's Note: Members of the media have permission to republish the article linked above once credit is given to InternationalLiving.com.
Further information, as well as interviews with expert authors for radio, TV or print, is available on request. Photos are also available.
For information about InternationalLiving.com content republishing, source material or to book an interview with one of our experts, contact PR Managing Editor, Marita Kelly, +001 667 312 3532, email@example.com
About International Living
For 37 years, InternationalLiving.com has been the leading authority for anyone looking for global retirement or relocation opportunities. Through its monthly magazine and related e-letters, extensive website, podcasts, online bookstore, and events held around the world, InternationalLiving.com provides information and services to help its readers live better, travel farther, have more fun, save more money, and find better business opportunities when they expand their world beyond their own shores. InternationalLiving.com has more than 200 correspondents traveling the globe, investigating the best opportunities for travel, retirement, real estate, and investment.