I have to do a lot of research for this blog, so I read a lot of websites and publications about living and retiring in Mexico. I came across this article the other day from mexlaw.ca, and I found it very informative. It goes into a lot of things people from the USA should consider before making a decision to move to Mexico.
A Few things for Americans to Consider When Moving to Mexico
Do not come from the USA and expect life to be the same as it is at home.
Life is different in Mexico, we enjoy a slower pace and it takes time to adjust. Patience is the key, you must be open and ready to experience a new culture and relaxed lifestyle.
When considering a move to Mexico, take time on the ground to figure out where you will live. Whether you are purchasing a home or renting, we would advise that you do not sign a long term rental contract or buy sight unseen. Rent a short term place and check out the different areas, find the best neighbourhood and price for your lifestyle.
Many homes look much better online than they do in real life, also location is important whether you want to be downtown in the center of everything or you want a quiet suburb. Living in the center of town is great for walking and convenience, but if you plan on having a vehicle, you will get more for your money living on the outskirts of the town in a residential area.
Retiring in Mexico
Despite the picture the media paints of how dangerous Mexico is, in reality it remains a safe and peaceful place to live and retire. Quintana Roo, including Cancun, Cozumel, Playa del Carmen, Akumal and Tulum remain safer than many US cities.
Enjoy a lower cost of living, a better quality of life, and quality health and dental care.
Retires easily qualify for temporary or permanent resident card in Mexico, based on their monthly retirement income or investments.
Mexico’s Tax System has a similar structure as the USA, yet much less expensive.
A tax accountant in Mexico can advise you how to save money on taxes if you are a business owner in Mexico, you plan on purchasing or you are renting out your property.
Property tax is surprising low in comparison to the US and Canada, the predial (property tax) is based on the tax value of the property averaging out to approximately 60% of its resale value, and is as low as $100 to $200 USD a year.
The tax assessment is always much lower than the actual value of the property.
By paying your property tax early you will receive a generous discount, for example by prepaying your taxes in December you save 25%, and if you are paying in full in January you receive a 20% discount.
The sales tax is already included in most purchases, in Quintana Roo the IVA (sales tax) is 16%. This tax is on goods and services and is usually included in the sticker price, although small businesses may not charge IVA, if you request a receipt/fractura from a small business they may ask you to pay the tax on top of the sticker price before issuing a fractura.
Planning on working in Mexico? You will require a visa with permission to work and you are required to pay income tax. In most cases your employer will deduct the tax, but if you are self employed or plan on owning a business in Mexico, it would be best to have an tax accountant. Having a professional tax accountant is essential as the Mexican tax laws can change frequently. Ask MexLaw about their accounting services.
Immigration Laws in Mexico
Sometimes it is hard to find the correct answers regarding immigration, so many Americans end up being illegal in Mexico. Whether they intend to be under the radar or just have not dealt with the immigration laws of Mexico.
As a tourist you may stay in Mexico up to 180 days (depending on the number of days written on your tourist visa when you arrived) if you intend to stay longer you will require a Temporary or Permanent visa. If you plan to stay you should consult an immigration specialist and decide which visa best suits your needs. They can help you with the qualifications and file the paperwork for you, avoiding the stress and time spent dealing with an ever changing process.
Overstaying your tourist visa is a serious issue and can lead to legal problems for you, including fines and deportation. You will be required to produce legal documents immediately in order to stay in Mexico, if it is discovered you have overstayed.
Many Americans only stay for the 180 days at a time as a tourist and spend the summer months in the states.
Thanks for reading,
Stewart Rogers USA-South Carolina