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I decided years ago, that when my son graduated from high school that I wanted to live in a house on the beach, preferably in a different country...at least most of the year. I researched several different places, such as Mexico, Puerto Rico, Dominican Republic and several other coastal destinations.
I love Mexico and the culture of the people, but it is very difficult to retain property due to Article 27 of the constitution which prohibits non-Mexicans from directly owning land within 31 miles (50 kilometers) of the coast and 62 miles (100 kilometers) of the nation's borders (Press, 2013). They have the power to come in a take your property whenever they want and there is nothing that you can do about it. It has been said that they are considering allowing US citizens to own property; however, I think I’ll allow other people to take that plunge first!
Costa Rica will allow you to purchase property, but you’ll have to buy into a corporation first. They must then appoint a Board of Directors, with a minimum of three members: President, Treasurer and Secretary, and appoint a Comptroller. A different person must occupy each of these positions. It is possible for the initial incorporators to occupy the positions. Here’s another tip… When you are buying real estate, it is advisable to do it in a corporation's name. Doing so simplifies the transfer process. (Molinero, n.d.)
The Dominican Republic allows you to own property as a non-citizen. However; the taxes might make or break that decision for you. Non-residents are taxed on their income from Dominican Republic sources and married couples are assessed and taxed separately. The income tax at a corporate rate is 27%. Capital gains arising from the sale or transfer of property are subject to capital gains tax at a flat rate of 27%. Dominican Republic Property taxes ("IVSS" taxes) are levied on sumptuous homes and unbuilt city lots. Unbuilt city lots of any value pay at an annual tax rate of 0.50% of appraised value. Sumptuous homes pay at a 0.25% p.a. tax rate. I would strongly advise you to get a “trusted” attorney to review all your possibilities and financial obligations before making a purchase (Taxes are high in the Dominican Republic, 2017).
I am still on my journey of finding the best coastal paradise that fits all my wants and needs, while keeping my pockets intact. I would strongly advise you to do your homework before making any purchases and find a trusted lawyer to review all documents before committing yourself to a contract. I must admit though…this is probably the best homework assignment I have ever had and I am having a great time sampling!
Here’s another helpful article listing all the pros and cons of buying abroad!