# Are you planning to retire outside Canada?



## Addy

I have recently decided to research if my spouse and I should consider retiring in a less expensive country. We have a roommate from Chile and I am keen on visiting and seeing if it's a country that may work well for us. 

I am curious if others here are also contemplating retiring somewhere other than Canada, and if yes, why?


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## HaroldCrump

I am, although it is many years away.
It is still too early to pick a retirement spot/country for me, I think.
A lot changes in 30+ years.
For all you know, Brazil, Chile and Argentina may be very expensive and the US could be dirt cheap 
If that turns out to be so, I'd probably pick San Diego or Pensacola.


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## the-royal-mail

You have to stay here for 6 months per year to keep your health care and other benefits.


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## kcowan

Once you get beyond 3rd world countries, costs are comparable. South America is cheaper than Canada but maybe that is due to their lower safety net. We looked at Uruguay and decided against it because of their high costs and remoteness.


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## bekair

I retired to an Island in the Pacific - Vancouver Island, well it's ALMOST another country 

bbt


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## GeniusBoy27

I'd contemplate Australia if they'd let me in.


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## Jayde

GeniusBoy27 said:


> I'd contemplate Australia if they'd let me in.


If you have enough money any country will let you in  From memory, Australia is rather reasonable in that regard - I believe it was only a few hundred thousand in savings that they required... 

Although I'm sure the rules have all changed since I last looked at them.


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## martinv

Perhaps start small by renting a place somewhere for 2 or 3 months.
Then the following year extend it to 4 or 5 months. See how you like it.
As mentioned, once you exceed 180 days, there are all sorts of tax/health insurance complications. We spend about 5 months in Baja each year.
In the fall, we are excited about going South and in the Spring, excited about going North. Perhaps the best of both. Oops, have to go, Adelita's fresh fish tacos are calling me again!


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## osc

I was thinking about the tax implications of retiring in Bahamas. Capital gains tax is 0. Probably one would afford private health insurance with the tax savings. And probably a Vancouver townhouse costs about the same as a beach house in Bahamas.


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## andrewf

You also lose OAS if you are non-resident.


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## the-royal-mail

Jayde said:


> ...Australia is rather reasonable in that regard - I believe it was only a few hundred thousand in savings that they required...


LOL yeah that's real reasonable.


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## lister

We may spend winters in Taiwan, probably no more than five months. Of course that all depends on if they get NHL Centre Ice over there.


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## kcowan

osc said:


> I was thinking about the tax implications of retiring in Bahamas. Capital gains tax is 0. Probably one would afford private health insurance with the tax savings. And probably a Vancouver townhouse costs about the same as a beach house in Bahamas.


You can remove your assets from Canada for a one-time 25% tax. This is more than most retirees pay each year so the snowbird thing works well. And you give up OAS and medicare too which are "free".


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## andrewf

the-royal-mail said:


> LOL yeah that's real reasonable.


I don't think you have to give it to them, just have it (as proof you won't be an economic burden).


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## Larry6417

It depends on what immigration category you're applying through. Most countries, including Canada and Australia, allow wealthy immigrants to buy their way in. See www.migrationbureau.com/australia/immigration.php


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## Larry6417

kcowan said:


> You can remove your assets from Canada for a one-time 25% tax. This is more than most retirees pay each year so the snowbird thing works well. And you give up OAS and medicare too which are "free".


Did you do the same? Are you still considered a Canadian resident afterwards?


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## kcowan

Larry6417 said:


> Did you do the same? Are you still considered a Canadian resident afterwards?


No you must seek residency status in your chosen country. I remain a Canadian resident because the tax treatment when retired is pretty good. It is really hard to become a non-resident. Easier if you have kids that remain resident.


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## osc

kcowan said:


> You can remove your assets from Canada for a one-time 25% tax.


I didn't know about that. Does it apply to everything, including non-registered accounts or cash in banks or in hand ?


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## MoneyGal

Here's the list of property which is subject to a deemed disposition if you emigrate from Canada and become a non-resident for tax purposes:

http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/dspstn-eng.html


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## osc

MoneyGal said:


> Here's the list of property which is subject to a deemed disposition if you emigrate from Canada and become a non-resident for tax purposes:
> 
> http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/dspstn-eng.html


If I understand this correctly, there is no tax for TFSA or for unregistered accounts (if the holdings are not Canadian). And one can sell his own house before leaving and there is no tax on the cash.


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## MoneyGal

Yes. Assets not subject to tax in Canada do not become taxable if you leave Canada and become a non-resident for tax purposes. There is a deemed disposition, but if that is not a taxable event, there is no tax payable.


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## Financial Cents

Probably not. Our plan is to have enough passive (dividend) income to rent something for 1-2 months each winter. That way, we can take advantage of different locations and have the freedom to choose where we want to stay for awhile.


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## Jayde

the-royal-mail said:


> LOL yeah that's real reasonable.





andrewf said:


> I don't think you have to give it to them, just have it (as proof you won't be an economic burden).


What andrewf said ^^

$200K-300K in savings for retirement is a *very* reasonable requirement. If you're going to Australia to retire, odds are you are not going to be working. No Australian income means you haven't paid any Australian taxes, therefore you will not be entitled to any state benefits, including healthcare. They simply want proof that you can support yourself while you're there


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## the-royal-mail

Jayde said:


> What andrewf said ^^
> 
> $200K-300K in savings for retirement is a *very* reasonable requirement. If you're going to Australia to retire, odds are you are not going to be working. No Australian income means you haven't paid any Australian taxes, therefore you will not be entitled to any state benefits, including healthcare. They simply want proof that you can support yourself while you're there


From the gov'ts perspective, I completely understand what you are saying. And I actually agree that there should be some sort of a policy in place to prevent immigrants from going there and simply free-loading off their system as happens in Canada. 

But on a practical basis, consider how much money people are spending these days. Look at all the gnashing of teeth we have to do to get people to save for something as simple as rainy day money. A lot of people these days would be bankrupt in a few short months if they had to endure any kind of a life crisis. I personally don't know anyone, young or old, who has that kind of money sitting in savings. You may count their house, but that goes to 0 if they buy another house down under. Seems to me this $ requirement would do a good job of excluding the vast majority of applicants.


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## andrewf

RM, Canada has a very similar mechanism. True, family members can be sponsored, such as grandparents, but I suspect this is the case in Australia, too.


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## loggedout

Retirement is depressingly a long way off and who knows what my situation will be like then, as I may have more people to think about than just myself. Nevermind, how much Canada and the world may change by then.

I would prefer to live in a warmer climate as I don't like anything about Canadian winters so I could see myself moving away permanently even before then.

With my family background from that of a very undesirable third world country (at this point in time) and modest means, I could adjust to a significantly lower standard of living without as much difficulty as the average Canadian, having seen and lived in it before (albeit temporarily).


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## Rox

I think the gist of the whole thing is that we should have enough passive income to sustain our lifestyle, wherever we are and wherever we choose to be.

To do that, first, we must attain the necessary amount of money to act as the nestegg, and then to have enough financial knowledge to be able to invest this nestegg (money) for the highest yield and cashflow possible. And this nestegg must be be lost due to some bad investments.

Then, we must understand the surroundings that we choose to be in, in order that we can spend in a value-conscious way to attain the best quality of life at the lowest cost possible, hence, be economical.

With a combination of the above two working together, then I believed we will be comfortable and we will be safe.


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## Jon_Snow

I've spent alot of time in the Baja over the past 20 years... if you can shop where the locals shop, you can really live quite frugally there... $1500 a month, which includes rent, is quite realistic. Once I pull the plug, I could see myself spending 4-5 months a year down there. Possibly the best climate in the world... think Palm Springs by the ocean....


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## kcowan

Rox said:


> ...To do that, first, we must attain the necessary amount of money to act as the nestegg, and then to have enough financial knowledge to be able to invest this nestegg (money) for the highest yield and cashflow possible. And this nestegg must be be lost due to some bad investments.
> 
> Then, we must understand the surroundings that we choose to be in, in order that we can spend in a value-conscious way to attain the best quality of life at the lowest cost possible, hence, be economical...


You will find that on both sides of the equation, there are many tradeoffs and you must make some key decisions. The second part, lifestyle, has many more options than the first to close the gap. But you have to be flexible and consider many non-standard alternatives. 

Taking the safe alternatives that everyone else follows will be unlikely to lead to an above standard lifestyle.


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## sags

In the talk of places to retire, I haven't heard much from people about retiring in Las Vegas.

From what I have read, Las Vegas is one of the places most hard hit by falling home prices, so buying a place to stay should be a lot cheaper than other locations.

The weather is pretty good in the winter months (by Canadian standards) and the amentities are first rate. One would think that with all the casinos and restaurants, bargains could be found for dining outside the home.

There is lots of entertainment and things to do.

Are there reasons that Las Vegas isn't a big draw for retirees?


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## furgy

Jon_Snow said:


> I've spent alot of time in the Baja over the past 20 years... if you can shop where the locals shop, you can really live quite frugally there... $1500 a month, which includes rent, is quite realistic. Once I pull the plug, I could see myself spending 4-5 months a year down there. Possibly the best climate in the world... think Palm Springs by the ocean....


We used to spend winters in San Felipe , we would live on half that amount , and still have too much fun.

I don't think I could survive the summers there tho , too hot.

Six months south (winter) and back to southern BC for six is what I am hoping to do , within about 5 years.


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## Sherlock

What about Belize? I heard it's a popular retirement destination for Americans because it's cheap and it's the only English-speaking country in the Carribbean.


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## HaroldCrump

Sherlock said:


> it's the only English-speaking country in the Carribbean.


Eh? Most certainly it is not.
What about the Bahamas?
English is also spoken throughout Antigua, Jamaica and Gayana (the "West Indies").


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## kcowan

sags said:


> In the talk of places to retire, I haven't heard much from people about retiring in Las Vegas.
> 
> From what I have read, Las Vegas is one of the places most hard hit by falling home prices, so buying a place to stay should be a lot cheaper than other locations.
> 
> The weather is pretty good in the winter months (by Canadian standards) and the amentities are first rate. One would think that with all the casinos and restaurants, bargains could be found for dining outside the home.
> 
> There is lots of entertainment and things to do.
> 
> Are there reasons that Las Vegas isn't a big draw for retirees?


Well there is the oppressive heat in the summer. There is the lack of water (they make you sign a disclaimer that there will not be adequate water for 40 years). There is the "sameness" of the subdivisions, all stamped in the last 10 years. And there is the uncertainty of real estate values.

Just off the top...


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## Belizean Beach Bum

HaroldCrump said:


> Eh? Most certainly it is not.
> What about the Bahamas?
> English is also spoken throughout Antigua, Jamaica and Gayana (the "West Indies").


Belize is the only English speaking country in Central America. 

It is sort of like the wild west with hurricanes.


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## martinv

furgy said:


> Six months south (winter) and back to southern BC for six is what I am hoping to do , within about 5 years.


We have been doing 5 months in Baja, 7 months BC for 11 years.
With the rv it runs about $1,000 per month excluding rv fuel,repairs, insurance etc.

Just in from a 2 hour kiteboarding session, life is good.


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## Jon_Snow

Heading down to the Cape region of the Baja in a matter of days... just a three week vacation though... the "6 month Mexico, 6 month B.C." routine will have to wait a few more years... I'm only 38 and still in the midst of my "accumulation" phase.


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## martinv

Accumulating is good, but at least you are striking a balance by travelling and enjoying life as well. You never know what life may throw at you when least expected.
38! My 38th year was highlighted by Oct.19,1987, Black Monday hit the stocks and the Dow plunges 508 points in one day. Luckily I only had a small position in stocks at that time.
Enjoy Cabo Pulmo if you should get there.


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## Jon_Snow

Cabo Pulmo is indeed wonderful... excellent scuba/snorkeling. We are renting a Jeep for a week and most likely visit Cabo Pulmo again. Todos Santos is also a favorite place of ours....

I'll be posting on this forum while down there... we have wi-fi at our condo.


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## jamiechese

Belizean Beach Bum said:


> Belize is the only English speaking country in Central America.
> 
> It is sort of like the wild west with hurricanes.


I travelled to Belize and Guatemala when I was younger with my parents. I remember it being so amazing there! We got to swim with some awesome sea creatures. I even remember we swam with nurse sharks (I was still scared shitless!). I think when I have a chance to travel that will be the first place I go!


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## atrp2biz

Do you have any safety concerns for Northern Mexico? That's the first thing that comes to my mind. Also the wind farm potential--I'm in the energy industry



martinv said:


> We have been doing 5 months in Baja, 7 months BC for 11 years.
> With the rv it runs about $1,000 per month excluding rv fuel,repairs, insurance etc.
> 
> Just in from a 2 hour kiteboarding session, life is good.


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## martinv

Well, I don't drive around Tijuana in the middle of the night.
I always plan the drive with safety in mind. Stop at a gas station about 2 km from the Mexico border at 6am. Have a coffee and wait for daylight. As soon as I feel that it is light enough, drive to the border. Go through customs etc. and head down the toll road to Ensenada. By noon I am in El Rosario (about 200 miles) and breathe a sigh of relief. At that point you head up into the most beautiful high desert country. I feel quite safe from then on south. It seems the border areas have most problems. 
Actually, most people in mexico and I think Canada as well are just trying to get the kids off to school and go to work and come home safe!


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## kcowan

In driving to PV, we go through Nogales south of Tuscon. We also stay at the Best Western in Arizona and start at 630 going through the truck crossing at 645. There was a drug takedown going on last time and the police had the main highway blocked off. So it took an hour to wend our way through the suburbs. That is the only incident we ever had. We never felt at risk.


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## fraser

We are taking a closer look at the Pacific coast of Panama. Maybe not for the entire year but a good part of it...but this is a few years out.

Does anyone have any insight into leaving Canada to retire, and becoming a non resident for tax purposes? We have no issue with deemed gains on disposiiton, we will not have an interest in any real estate, no cars. Just a bank account and an investment account in Canada. We expect to have a large tax liability arising from the excersise and sale of stock options in CY 2012. It would be nice dodge that bullet while we are out of the country. During this period we would not be purchasing any foreign real estate. We are doing some research on this and we have some CRA information. Has anyone out there done this and if so what sorts of CRA issues did you encounter that you did not anticipate. Clearly, before finalizing these plans we would engage a tax specialist. We want to be prudent because we may, after a years absence, return to Canada if things do not work out as anticpated. Thanks.


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## kcowan

I think the notion of trying to leave for one or two years and then return is more trouble than it is worth. A tax specialist can probably structure the anticipated capital gain w/o actually moving.

CRA tests for non-residence preclude maintaining Canadian banking and investing accounts.


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## Lynda

We left Canada 6 years ago to live in Oman ( Middle East) for work. We kept our RRSPs in Canada and some investments ( mutual funds) and one bank account. We cancelled our credit cards, sold our house and our vehicles
and we qualified for non residence status. I would think you may run into issues if you only stay one year.... but if you were a couple of years I think you would be okay. We currently spend about 3 weeks a year in Canada





fraser said:


> We are taking a closer look at the Pacific coast of Panama. Maybe not for the entire year but a good part of it...but this is a few years out.
> 
> Does anyone have any insight into leaving Canada to retire, and becoming a non resident for tax purposes? We have no issue with deemed gains on disposiiton, we will not have an interest in any real estate, no cars. Just a bank account and an investment account in Canada. We expect to have a large tax liability arising from the excersise and sale of stock options in CY 2012. It would be nice dodge that bullet while we are out of the country. During this period we would not be purchasing any foreign real estate. We are doing some research on this and we have some CRA information. Has anyone out there done this and if so what sorts of CRA issues did you encounter that you did not anticipate. Clearly, before finalizing these plans we would engage a tax specialist. We want to be prudent because we may, after a years absence, return to Canada if things do not work out as anticpated. Thanks.


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## cannon_fodder

Fraser,

My wife and I have been looking at Panama but in the mountains near Boquete. Recent business travels to Asia have me thinking about Thailand which is so different.

I'd be interested in hearing from people how they managed the two residences... I see that as being very expensive having a home sitting in Canada unused and unrented for several months. Was it balanced by the lower tax bite?

I expect that we will be ready in 3 years to retire and we can leave Canada behind. I haven't yet been to a tax accountant to discuss the pitfalls of seeking non-residency. But, having a home in Canada and leaving the winters behind seems unnecessarily expensive. That's why I'm particularly interested in how people cope with the additional expense.


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## kcowan

We have a renter who comes in every November and leaves every May. He gets a 3 BR 3300 sq.ft. penthouse for the cost of a one BR furnished apartment. For us, he is a paying homesitter.

We can handle it because our southern home is really it. So the rent is just an opportunity to retain our northern premises for the summer.


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## cannon_fodder

kcowan,

Does the rent your "housesitter" pays cover both your home and vacationing expenses? Or your home and a little bit more?


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## I'm Howard

I have travelled the world several times and there are many exotic places like Tasmania, Bali, Thailand etc that offer a nice life style.

Florida offers very inexpensive accomodation, can be driven to, speak almost the same language, and I can be flown home in an emergency.

We will rent our property to a ski family, they will pay us enough to more than cover our costs.

$35,000 gets you a fully furnished manafactured home of about 1,400 sq. ft in a 55 plus community, you pay about $350 a month for land rental, $100 annual license, total cost of about $7,000 gets you six months in the sun.

9 holes of golf with cart, $18.00. 

No HST.


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## kcowan

cannon_fodder said:


> kcowan,
> 
> Does the rent your "housesitter" pays cover both your home and vacationing expenses? Or your home and a little bit more?


No it only covers 60% of the house costs which is why I call it a paying house sitter. To get full market rate, we would have to remove all our stuff. As it is, we just free up one of the three bedrooms.


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## chelsea

People entering retirement are increasingly choosing to spend part or all of their time in other countries. Lower cost of living, great weather, beautiful scenery and great food can make the idea of retiring abroad very attractive. But there are some difficulties associated with an overseas retirement, including tricky tax, medical and legal issues.


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## kcowan

chelsea said:


> People entering retirement are increasingly choosing to spend part or all of their time in other countries. Lower cost of living, great weather, beautiful scenery and great food can make the idea of retiring abroad very attractive. But there are some difficulties associated with an overseas retirement, including tricky tax, medical and legal issues.


Absolutely. Plus many people do not have the stomach to deal with such issues. Still others (like Canadian snowbirds in the US) just ignore the issues and hope that it will all work out.

But if you maintain Canada as your tax residence, it is relatively easy.


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## Square Root

kcowan said:


> Absolutely. Plus many people do not have the stomach to deal with such issues. Still others (like Canadian snowbirds in the US) just ignore the issues and hope that it will all work out.
> 
> But if you maintain Canada as your tax residence, it is relatively easy.


Other than estate tax for HNW individuals. We are considering a place in Scottsdale but I need to address the estate tax first. Prices/ FX rates really seem to be good right now. Would only spend about 75 days a year there so may not be the smartest thing.


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## I'm Howard

Golf today, again,and later this week between heat and the humidity, will feel like 100F.

Blue Jays have good looking team this year, taken in about six games, so far.


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## kcowan

Square Root said:


> Other than estate tax for HNW individuals. We are considering a place in Scottsdale but I need to address the estate tax first. Prices/ FX rates really seem to be good right now. Would only spend about 75 days a year there so may not be the smartest thing.


The current exemption for non-resident aliens is $5 million/each. Granted this could change, but you probably OK if the US holdings are a small percentage of your total estate. Note that US equities also count so keep the content low in your portfolio. This is especially galling for ADRs so trading directly on foreign non-US exchanges might make sense.

With the improvements in Homeland Security, we can all expect a better track on the days you spend in the states. We have friends who spend 2 weekends a month in Seattle so that is 3 days x 40 weeks = 120 days which puts them over the 183 days limit for US immigration without invoking the Canada-US tax treaty. That is why they snowbird in Mexico.


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## Addy

kcowan said:


> That is why they snowbird in Mexico.


Mind me asking where in Mexico? I am so leary of Mexico lately it makes me curious where the safe areas are.


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## Jon_Snow

I have been frequenting the southern tip of the Baja peninsula for almost 25 years (since I was 16 years old) and it is very safe in comparison to the Mexican mainland. My parents have owned a condo there since the late 80's and I can honestly say I feel safer walking the streets at night in San Jose del Cabo than I do in many parts of Vancouver.

The cost of living is almost half of that of Vancouver, so I will likely do the snowbird thing in Mexico like my parents do now.


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## kcowan

I live in PV but I would say that most of Mexico is extremely safe for law-abiding citizens. And especially tourists. There is some petty crime like purse snatching at Easter and Christmas.

I think as long as you avoid border towns like Juarez, it is pretty safe. There are 21 states in the Mexican Republic and most of them are safe. We have friends who haul their 5th wheel trailer down to Chiapas every year. They are back here in PV now. They have been all over the country during the past 5 years without incident. Just avoid dealing in drugs/smuggling and you should be fine.

I guess we love the multicultural experience and complexity when compared to the stultifying sameness of life in San Diego, Palm Springs, Phoenix or Florida, all of which we tried before settling here. And the weather is much nicer...

BTW the Aztecs had a population of 30 million people and inhabited greater Mexico for 30,000 years before the Spaniards arrived in the 1600s. They have the largest pyramid on the planet. If you want history, you don't have to go the Babylon! The US southwest was populated by Mexicans long before the Yankees arrived.

But stop listening to CNN, CBC and Fox News!


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## Square Root

kcowan said:


> The current exemption for non-resident aliens is $5 million/each. Granted this could change, but you probably OK if the US holdings are a small percentage of your total estate. Note that US equities also count so keep the content low in your portfolio. This is especially galling for ADRs so trading directly on foreign non-US exchanges might make sense.
> 
> With the improvements in Homeland Security, we can all expect a better track on the days you spend in the states. We have friends who spend 2 weekends a month in Seattle so that is 3 days x 40 weeks = 120 days which puts them over the 183 days limit for US immigration without invoking the Canada-US tax treaty. That is why they snowbird in Mexico.


Thanks. I think the 2x$5million exemption is on the total worldwide estate. So we could be caught. Tax would be on the US portion. Maybe i'm a little paranoid on this stuff but I like to understand all tax issues before I write the cheque. So I need to get up to speed on the new rules before buying.


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## humble_pie

no, it's my understanding that the 5M exemption is for US taxpayers only.

it's my further understanding that non-resident alien estates will be taxed on a pro-rated portion of this exemption. Pro-rated according to proportion of US assets in global estate.

ie very roughly speaking, deceased with USD 2M in global estate of 10M will have only 20% of 5M exempted & will pay steep tax on remainder. The math is not pretty.

rules get fancier when real estate is involved. Parties who may be subject to non-resident alien estate tax need high-powered advice from internat'l tax specialists. Not a DIY project.

note that IRS global estate total calculations include all real estate wheresoever situated, whether principal residence or not, plus rrsp, tfsa, etc.


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## Square Root

Pie. Agree this is not a DIY project and will certainly get competent advice before buying anything. Stakes too high and numbers are big. Thanks.


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## kcowan

Also they have a rule that the assets must be visible at first glance. So if you create a holding company which Incidentally holds US assets and it is Canadian, then the estate tax does not apply to those holdings. If it is created solely for the US assets, then the assets are counted.

And as pie indicated, the limits are prorated and include all holdings. Definitely not a project for an amateur. OTOH, holding $10 million in assets does give you the flexibility and incentive to protect you wealth.

For us, buying in Mexico just made life easier and better.


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## Square Root

kcowan said:


> Also they have a rule that the assets must be visible at first glance. So if you create a holding company which Incidentally holds US assets and it is Canadian, then the estate tax does not apply to those holdings. If it is created solely for the US assets, then the assets are counted.
> 
> And as pie indicated, the limits are prorated and include all holdings. Definitely not a project for an amateur. OTOH, holding $10 million in assets does give you the flexibility and incentive to protect you wealth.
> 
> For us, buying in Mexico just made life easier and better.


Thanks. Yes Mexico sounds simpler. Does the issue with having a trustee hold the property ever get in the way?


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## marina628

I just got back Yesterday from 10 days in Caribbean , I fell in love with Antigua .Going to do some research on Caribbean and some of them have offshore banking


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