Best Places In The World To Retire

Readers, when you are in Mexico, only the native language (and native currency) are legally binding in a document, which is why your property deed is always in Spanish and your home price is recorded in pesos.

 

By law, Notarios are required to have a certified translator at all property closings if one or more of the parties involved are not Mexican citizens, even if they speak and understand Spanish. Documents leading up to the purchase and sale of a...

Readers, when you are in Mexico, only the native language (and native currency) are legally binding in a document, which is why your property deed is always in Spanish and your home price is recorded in pesos.

 

By law, Notarios are required to have a certified translator at all property closings if one or more of the parties involved are not Mexican citizens, even if they speak and understand Spanish. Documents leading up to the purchase and sale of a property are bilingual to assist non-Spanish clients, but ensure you are dealing with a reputable Realtor because if there is an error or difference in the two languages, the Spanish language will supersede in Mexican court.

Yes, if you are buying a house in Panama, you should hire an attorney.

 

Buying a house is likely to be the most important investment you will make overseas.  As similar as it may seem and even if you understand the Spanish language, there are important differences from what you are used to in your home country   Therefore, it is always wise to have a trusted attorney represent you to do the title search, draft and/or negotiate the terms of the...

Yes, if you are buying a house in Panama, you should hire an attorney.

 

Buying a house is likely to be the most important investment you will make overseas.  As similar as it may seem and even if you understand the Spanish language, there are important differences from what you are used to in your home country   Therefore, it is always wise to have a trusted attorney represent you to do the title search, draft and/or negotiate the terms of the contract and assist all the way to title registration.  Also, your attorney should advise you as to the tax situation of the property, how your purchase will affect that property tax and how to take title. 

 

In Panama, once you sign a promise to purchase contract and pay the down payment you are committed (no cooling off period).  Also, the down payment is normally not escrowed, which makes it even more important for you to have good legal representation.  

If you are a Portuguese resident, you are taxed on your worldwide income. However, if that income is taxed in the other country, then you can get relief under the double tax agreement, with the refund provided by Portugal.

 

As an example, let’s say you’re from the US, you live in Portugal and you are a legal resident of Portugal.  Portugal will tax you on all of the money that you make worldwide, which includes income in the US, in...

If you are a Portuguese resident, you are taxed on your worldwide income. However, if that income is taxed in the other country, then you can get relief under the double tax agreement, with the refund provided by Portugal.

 

As an example, let’s say you’re from the US, you live in Portugal and you are a legal resident of Portugal.  Portugal will tax you on all of the money that you make worldwide, which includes income in the US, in Portugal, and in any other country; it makes no difference. But if you have paid tax on the same income in a foreign country, you can claim a deduction on your Portuguese tax return of the tax that was paid or withheld in the foreign country. You get a tax credit, which will then lower the amount of tax that you pay in Portugal. 

 

In order to be a tax resident of Portugal, you have to be in the country for 183 days within the year or alternatively, you could rent a home, which is considered to be your permanent residence. If you are not a tax resident in Portugal, you are only taxed on the income that you earn in Portugal and not on your other worldwide income.

 

There is a special regime that was set up about 5 years ago, which institutes a special 10-year tax holiday for people who come to retire to Portugal from another country, called the Non-Habitual Resident Regime. If people who qualify receive foreign income in Portugal, they have to declare that income but they do not have to pay tax on that income for 10 years.  This includes both earned income and retirement income. They will only pay taxes on the income that they earn in Portugal. This tax regime has attracted a lot of Northern Europeans to come to Portugal. It has also attracted a lot of French people who were trying to escape the very high taxes that are now being applied to wealthy people in France. 

 

There has been a big takeover bid by the left wing parties who are now the governing parties in Portugal. They may overturn this particular regime in order to fund the increase in pensions of the local people and increase the salaries of the public servants, which were cut under the previous government. Whether they will overturn it or not, I cannot answer, but I can report that Portugal has a habit of introducing really attractive legislation (for example, doing away with inheritance tax) and then when another government comes in, the legislation may get repealed. When this happens after a lot of people have already made arrangements, it can become an absolute nightmare.

 

(The town of Évora, Portugal shown with its medieval walls, drawn in 1501, pictured.)

Yes, you have to pay US income tax on money that you earn in Belize. However, there are exclusions that you can claim such as the Foreign Earned Income Exclusion, which will allow you to exclude a certain amount of money (around US $100,000 each) for you and about the same amount for your spouse to exclude that for tax in the United States. However, if your earned income is above that, then you have to pay income taxes in the United States.

 

If you are...

Yes, you have to pay US income tax on money that you earn in Belize. However, there are exclusions that you can claim such as the Foreign Earned Income Exclusion, which will allow you to exclude a certain amount of money (around US $100,000 each) for you and about the same amount for your spouse to exclude that for tax in the United States. However, if your earned income is above that, then you have to pay income taxes in the United States.

 

If you are paying BZ taxes on income in Belize, like I do in my rental income, I pay taxes here but when I do my income taxes for the States, I get to deduct the total amount of my income tax here off the total amount of income tax I owe in the States.  You would always want to consult a US tax attorney before making any decisions about income taxes in the US and in Belize.  The best attorney here in Belize is Wrobel & Co. (Ryan Wrobel is a contributor to Best Places and can be found on this site.) 

 

(Wrobel & Co. Attorneys at Law, Belize, pictured.)