Retirement in Puerto Vallarta – Live in Mexico – Cheap, eh?


Mexico at $ 5 a day? Of course, it's not a problem if you can survive on four cervids during the day and sleep in a tent set up somewhere in the woods at night. Of course, if you live on the Mexican Riviera, you will only be able to afford a few cervezas a day, but you will be able to sleep on the beach! In 1997, we moved to Puerto Vallarta, Mexico, known as Vallarta or PV by the locals, and inevitably, when meeting people in the States, we wondered why in the world we would live there. Most believe that this is due to the low cost of living in Mexico and that one can cope well with social security. The reasons we have been living in Valarta for ten years have very little to do with the cost of living. One reason is the latitude of Vallarta, which is the same as Hawaii, leading to a climate absolutely ideal for golf, fishing, tennis, hiking, swimming or whatever your hobby is for seven months a year, from November until May,

The population of PV, our sleepy little Mexican fishing village located in Banderas Bay in the Pacific, just exceeded 350,000, making it the size of Anaheim, California, or twice the size of Boise, the capital of Idaho. Of the 350,000 residents, there are nearly 50,000 North Americans during the seven-month "high season". They have retired here to enjoy the numerous world-class restaurants, seven magnificent golf courses, world-class deep-sea fishing, modern supermarkets and shopping malls and nightlife. Most of these Vallarta North American residents have 350-channel satellite television, high-speed Internet service, air conditioning, and all other modern conveniences that can be found in the United States. Clean water, clean food, state-of-the-art hospitals with the latest in sophisticated first-aid equipment and great care for safety can be found here at PV. In fact, there are very few reasons not to live in Vallarta.

We haven't lived here for ten years, because it's cheap! For example, gasoline is about 8 pesos per liter or $ 4.00 per gallon. Electricity is about the same as in the US, while phone calls to the United States are about four times more than the same country calls. Supermarket food is about the same as in the US; imported products are much more, while local products may be much less. Imported hard goods, such as electronics, to Sam's Club, Walmart, or Office Depot may be twice as large as the same products in the United States. Cars are about 20% more expensive, imported clothing 50% more expensive, etc. From a resident's point of view, NAFTA does not work too well, as all imported items are taxed and are significantly more expensive than in the United States, Housing on the other hand are generally much lower than in the United States. Of course, that depends on where in the US and where in PV, but as an example, a small house in Central Florida would compare to casinos in PV without a view and cost twice as much. A grand mansion in Pebble Beach would be compared to a luxury hilltop villa overlooking Banderas Bay and would cost two to four times as much. A 2,000-square-foot condo in Bay Petersburg, Florida, similar to the one in the Vallarta Marina area, will cost about twice as much. On average, it can be assumed that the cost of housing in PV is approximately half that of the United States, given that house prices have almost tripled in the ten years we have lived here. One difference is that house and apartment values ​​have been softening in California and Florida over the past year, while the PV boom is expected to continue for at least another ten years. As baby boomers retire and open Vallarta, demand for new homes and apartments is rising, as is the cost of land, materials and labor, leading to real estate prices rising. Estimates suggest that property values ​​will double in the Vallarta area over the next five years.

There are several other significant differences related to housing. The first is related to real estate or property taxes. The annual upfront or property tax in Mexico is about .1% of the purchase price of the property. Suppose you bought a condo in PV for $ 200,000 ten years ago, considering that it was twice as much as you could buy in the United States. Today, its value would be around $ 600,000, but it's still on the books at $ 200,000 and annual taxes are about $ 200. A condo with the same cost base of $ 200,000 10 years ago located in Florida or California could be taxed from $ 5,000 to $ 15,000 today, and remember that this $ 200,000 apartment would be half of what you could buy in Vallarta. Additionally, if you have been a resident for more than five years in Vallarta and can show that this is your primary residence, there is no capital gains tax on the sale of your property. Annual taxes and car taxes are equivalent to those in the United States.
First-rate medical and dental care is available in Vallarta at about half the price of that in the United States. Qualified car repair, electronics, carpentry, plumbing, air conditioning and electrical repair technicians are approximately the same as in the United States. Of course, PV offers many non-professionals who will work for half the price, but you get what you pay for! The only exception is masonry. For a quarter of the price of one in the United States, you can have beautiful granite countertops, marble floors, tile pools and more. Another major difference in cost is that of unskilled labor as servants, gardeners or craftsmen. They are easily available for $ 20 a day, but don't expect the most efficient work in the world. You get what you pay again!

In summary, the cost of living in Vallarta is probably slightly lower than in Florida and significantly lower than California, given similar standards. Probably higher than Milwaukee, Wisconsin, or Cincinnati, OH, but there is no comparison in life styles. One thing is for sure, we do not know about Americans or Canadians who live in PV solely on their social payments. To live on a tight budget in Mexico, you need to head inland, away from the tourist areas, away from Paradise, and you can expect a completely different lifestyle. For money, Vallarta is extremely difficult to win, but certainly not cheap!