Are there any countries that I should look at or any that I should avoid in relation to incentives/packages for retirees? What countries offer the best tax benefits for potential retirees/expats that reside there?
In many countries all over the world you can live better for less. But as well as offering a lower cost of living, some countries stand out for the amount and quality of benefits they offer foreign retirees. Here's what our experts on the ground had to say about tax benefits:
Bonnie Hayman - Nicaragua Correspondent
Nicaragua offers great tax and retiree benefits. If you purchase a house, the real estate taxes are unbelievable low compared to what they are in the U.S. and Canada. (Example: 2 bedroom/2 bath ocean view home on an acre of land - $141 USD per year.) Nicaragua does NOT tax you on any income earned in any other country.
If you wanted to open a business, the government has instituted new laws in which you can claim sweeping exemptions like no property tax on purchased property for 10 years, no Nicaraguan income tax for 10 years, etc.
And once you get your retiree resident's card, you have additional benefits:Bring in a car from the U.S. once every 5 years duty free.Bring $20,000 of personal goods in once - duty free.Bring $50,000 of building materials for your house or business and not pay sales tax.Open a bank accountBuy on creditBuy a smartphone with planOwn a firearm
I hope this answers some of your questions. Nicaragua is a wonderful place to retire.
Jason Holland - Roving Latin America Correspondent
Unfortunately, Costa Rica did away with the big incentive programs it used to have for retirees years ago. But there are plenty of benefits to be aware of.
Once you are a legal resident, you join the Caja, which is the government-run universal health care system. You pay a monthly fee based on income and get free care after that, including doctor visits, specialist visits, prescriptions, testing, surgery... everything. That can be a big savings.
You won't be taxed on your income in Costa Rica unless you have a business based in the country. Income from online businesses or freelancing for clients outside Costa Rica is not taxed. And property taxes are just 0.25% of the assessed value of your home - paid annually.
And for those residents over age 65, there is a program called "Gold Citizen" that gives you discounts on groceries, eyeglasses, clothing, etc. There are thousands of participating retailers across the country. You also get free local public transportation and discounts on museum tickets and things like that.
Keith Hockton - Malaysia Correspondent
Malaysia doesn't offer tax breaks but none of your income generated outside Malaysia is taxed here. So effectively you can bring in what you like and you will not be taxed on it.Additionally interest earned on your investments here are not taxed either. And the cash rate here is currently 3%.
That being said you have to have MM2H status (10 year visa) to qualify. When and if you take that road and you have been accepted you can ship your household goods tax free to Malaysia, you can buy an imported car of your choice tax free, or bring in a car with you tax free.
Also the money that you must leave on deposit, in an interest bearing account, the interest earned is also tax free.
Hope this helps.
Jessica Ramesch - Panama Correspondent
Thanks for posting. As International Living's Panama Editor I can comment on Panama. A great many of the expats resident in Panama are here on the Pensionado program, which rather than tax breaks offers members the same discounts that retired Panamanian citizens enjoy. These discounts cover a wide range of expenses, from health care and utility bills to travel and entertainment.
Income tax in Panama is territorial, which means you do not pay tax on income generated outside Panamanian territory (nor are savings accounts taxed here).
Overall, Panama is known for having a very low tax burden. Of course, as you can see from the other responses from my colleagues, there are plenty of countries where you will have access to a low cost of living and/or tax breaks/financial incentives...so you can choose a destination that's cost effective but that you also really love.
Please remember, though, that no matter where you move, you may still have tax obligations back home...in your country of citizenship or any countries in which you maintain resident status.
Hope this helps.