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7 Apr 2016
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Expat Living

Retirement in Los Sueños is both luxurious and affordable. The area offers a wide range of opportunities to enjoy all of your hobbies and soak in Costa Rican culture. The staff at HRG Properties and Rentals is expertly trained to make the relocating experience as smooth as possible. In this article, we’ll cover affordability, property taxes, filing taxes back home, transportation concerns, medical expenses, purchasing groceries, and more, to give you a clear picture of how far your nest egg can really go in gorgeous Los Sueños, Costa Rica.

HRG specializes in property at the Los Sueños Resort and Marina, located on the pacific side of Costa Rica in a prime area to experience all that the natural rainforest, and beautiful ocean-side lifestyle, have to offer. This area is upscale, with property ranging from single-family homes, lots, and condominiums to lavishly designed villas, each with a view of the resort, golf course and rainforest reserve. These properties range from $400,000 to  under $4 million, a fraction of the price the same residences would go for in the United States (luxury ocean property can reach upwards of $15 million or higher in the U.S.).

Of course, the price of real estate isn’t the only factor concerning property affordability. Taxes must also be taken into consideration, especially for a retiree. Fortunately, compared to other countries, property taxes are next to nothing in Costa Rica. You will pay 0.25% on the value of the property registered by the city, which is much lower than the actual retail value. In the U.S., you could pay up to 1.89% on your property, based on median home value and depending on your state.

If you are a green card holder or United States citizen, the IRS does require expats to file income taxes. However, the guidelines are different than if you were living on U.S. soil. You are required to file taxes on your worldwide income, but as a resident of Costa Rica there are ways to avoid double taxation. However, Costa Rica does not require payment of capital gains taxes. This is great news for retirees, as this means they’re not required to pay taxes on their foreign retirement income.

As a retiree, you may want to consider applying for rentista or pensionado status. These are the two most common forms of temporary residency in Costa Rica, and if you are planning to apply for full residency, these are the two routes you will want to begin with. To qualify as a rentista you must show income of at least $2,500 per month in a permanent and stable manner for at least 2 years. Generally, one would apply for rentista status if they rely on investment income and do not have a pension. Providing proof that this income will be coming in will also be needed.

To qualify as a pensionado, you must show at least $1,000 per month from permanent fixed income, a pension, or similar retirement income. These applicants have a pension or receive social security retirement benefits.

Now, should you bring your car (or cars) when you retire in Costa Rica or should you purchase one when you arrive? Do you even need car? Here’s a little info to help you make that decision. Bringing a car to Costa Rica incurs relatively large import duties, sometimes ranging from 45% to 75% of the Costa Rican retail value of the car. There is also a $500 to $800 freight charge to have it shipped from the U.S. to Puerto Limon, where it will be inspected, and you will pay your Marchamo (liability insurance) and other insurance.

Another concern is maintenance. Some cars sold in the U.S. aren’t available in Costa Rica. This means that finding parts and qualified mechanics can be a hassle. However, cars do hold their value longer in Costa Rica, so if you bring your car over and eventually decide to sell it, you may get a much higher price for it than back home.

If you decide to purchase a car, an average used one will run you about $7,000 to $15,000. So, based on your budget, it may be worthwhile to sell your car before leaving the U.S. and simply rely on day rentals to go on excursions in Costa Rica (it’s about $20-$30 to rent a car for the day). Especially if you’re living in the Los Sueños Resort, a golf cart will get you everywhere you need to go to fulfill your basic needs.

A major concern for any retiree is the availability and affordability of health care. The Caja Costarricense de Seguro Social (CCSS) in Costa Rica accepts responsibility for providing public health care. Containing more than 30 hospitals and 250 clinics, foreigners can receive universal treatment by paying a small monthly fee based on one’s income. Depending on what kind of treatment you receive, health care costs in Costa Rica are 1/3 to 1/5 of what you would pay in the United States. This becomes very beneficial to the lifespan of a retiree’s nest egg. Private health care is also available, but at a higher cost.

Domestic help is quite affordable in Costa Rica. Live-in or full-time help can cost as little as $400 per month, and can be a major benefactor to your quality of life. Domestic help can take care of house cleaning, mowing, cooking, and even aid your shopping needs. The same type of service in the U.S. is largely unaffordable or sometimes unavailable in certain areas.

Although these benefits would make anyone want to retire in Costa Rica, the price of imported goods could put and dent into one’s savings. Local farmer’s markets offer a cheap and fresh route for grocery shopping, as $30-$50 will garner you a week’s worth of fresh, organic fruits and vegetables. Locally sourced meat, fish, cheese, and other dairy products compare with U.S. grocery prices. However, imported goods are relatively expensive in Costa Rica, so a trip to the super market (Automercado or even Pricesmart, Latin America’s version of Costco) for anything that is not domestic could increase your grocery bill considerably. 

With the easy going Costa Rican lifestyle and its relatively low cost of living for foreigners, retiring in Los Sueños is a wonderful option to spend your golden years. Affordability, luxury, and widespread availability of a retiree’s necessities make Los Sueños Resort, Costa Rica paradise for both you, and your nest egg.