Malta:Malta is another pick by globe-trotting Correspondent Rob Carry. Here's why he argued to include this on our 2015 calendar:"Malta," Rob wrote, "is a shining First World jewel in the middle of the Mediterranean. An EU member where English is almost universally spoken by the multilingual population, Malta is close to a complete package. Health care is superb, and all Europe is within an hour or two flying time. The Maltese people are warm and welcoming with an enthralling history, great food, and a culture all their own."Bangkok, Thailand:Bangkok is the pick of Asia Correspondent Wendy Justice, who explains, "Bangkok is overwhelming given the massive size of the city. There are certainly parts of it that I would not recommend, but there are a few neighborhoods that deserve our attention." Specifically, later this year, Wendy will introduce you to Sukhomvit, a neighborhood that is popular among expats and offers lots of Western-type amenities.Prague, Czech Republic:Prague was once the capital of the Holy Roman Empire, meaning plenty of historical and cultural interest. It is also centrally located in Europe, making it a great springboard for driving trips to nearby cities and countries. The city is no longer considered a super-cheap destination among European capitals, but the value is there. You can live well on a reasonable budget. With two-bedroom apartments available for less than US$900 a month in the city center, Prague is our pick for where to embrace city life on the Continent for less than US$2,000 a month.Vung Tau, Vietnam:Founded in the 14th century as a port town for European trading ships, Vung Tau means "anchorage." Nowadays a hub for the oil industry, the city plays a major part in Vietnam's economy and is a significant and relatively wealthy city that manages to feel sleepy and removed. For expats, the city offers a bargain cost of living, a good private hospital that caters to foreigners, clean, fresh sea breezes, exquisite seafood, and easy access to Ho Chi Minh City.Tulum, Mexico:Mexico Correspondent Mike Anderson will be reporting this year on Tulum, which, as he explains, "offers great beaches and a continuing opportunity for growth for the retiree-investor. Tulum has traction with expats who have created a small hub here in the Quintana Roo province of the Yucatan Peninsula. The area has been developing for the past two decades, and I think it will continue to evolve as a top expat haven in Mexico." Bali, Indonesia:Another pick from Asia Correspondent Wendy Justice's for 2015 is Bali:"Seminyak, Indonesia, on the island of Bali, offers residents a low cost of living, a large, well-established expat community, plus, of course, the stunning South Pacific beaches that Bali is so famous for. Indonesia even offers a retirement visa. I look forward to covering Seminyak... it's the perfect excuse for a return visit to Bali!" Spain:With property prices in Spain struggling to keep from falling further, this is the time to be looking at this part of the world. Specifically, we want to draw your attention to opportunities along the thousands of miles of coastline this country has to offer. The Costa del Sol is the best known of Spain's costas, but it's also the most developed. Other coastal spots offer more history and cultural diversity. Our Spanish scouts are looking for the best combination of current property values, cost of living, and culture. Stay tuned for our pick for Spain's best costa for 2015.Plus Two Special Expanded Issues:In addition, we're planning two special expanded issues for Overseas Retirement Letter subscribers this year. In June, we'll be publishing a round-up update on long-standing top retire-overseas choices in Ecuador, Belize, Colombia, Panama, Nicaragua, France, Italy, Spain, Thailand, and the Philippines. And, in August, we'll be producing our annual Retire Overseas Index, which will rate, rank, compare, and contrast the world's top 21 retirement destinations this year.Big year.Your year.Bon voyage.Kathleen Peddicord
Perhaps the strangest thing about Christmas in Kuala Lumpur is the big Christmas Eve buffets offered at hotels around the city. These are elaborate feasts, with turkey, roast beef and all the trimmings, local specialties, and a fantastic selection of desserts. That's not the strange part. What is unexpected are the party favors and the New Year's Eve-style countdown to midnight and the official start of Christmas Day. There are dances, visits by Santa, and Christmas skits (again, secular). At midnight, fireworks erupt. Malaysians love their fireworks, and almost every holiday is celebrated by a display of them, but we had never before considered Christmas a fireworks kind of day!Wendy Justice
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Prices in the better areas of Manila range from less than US$1,000 to more than US$2,000 per square meter. You need to do some ground work, as anywhere, to identify the particular neighborhoods that'd make most sense for you, depending on whether you're shopping for a place to live or for a rental investment. My favorite spots in the Philippines for pure investment are the resort towns of Cebu and Boracay. You can invest in a condo hotel in either of these beach locations for well under US$100,000 and expect good rental yields into the low double digits (question heavily anything projecting more than 12%). Thailand places similar restrictions to those in the Philippines on foreign ownership of property, except in this country foreigners can own up to 49% of a condo building. In this country, the resort areas can offer opportunity for rental yield; Pattaya is Thailand's biggest and best known beach destination. As in the Philippines, you can find one-bedroom apartments for less than US$60,000. Expect yields to be in the range of 6% for long-term rentals and a bit higher for short-term. Pattaya might be a place to consider a rental investment, but other parts of Thailand make more sense as places to live. A top lifestyle choice in this country is Chiang Mai, where you can find one-bedroom apartments on offer for less than US$45,000 in some new developments. That would be for a unit in a building with amenities like a swimming pool. On the other hand, that apartment wouldn't be much bigger than a large hotel room. Still, if you're a retiree with limited resources who wants to own your own place, you're not likely to find a property you'd actually want to live in anywhere else in the world for less than US$45,000. Malaysia's foreign ownership restriction is based on the price of the property. Foreigners have to spend at least 1 million ringgit (about US$300,000 right now) to own a piece of property in Malaysia. Note that it must be 1 million ringgit invested in a single property; can't be an aggregated amount among multiple properties. That limitation makes buying for rental yield difficult. The sweet spot in the Kuala Lumpur market is apartments in the 120-square-meter range, which go for US$150,000 to US$250,000. Push the purchase price over US$300,000 to meet the minimum ringgit criteria and your yield will drop. Still, Kuala Lumpur is a good, steady market. Also note that the U.S. dollar has seen a surge in value against the ringgit in the last few months. It's close to its high of 3.30 ringgits to US$1 reached back in February. Whatever the exchange rate in Malaysia, you could sell your parking space in Hong Kong and buy yourself a great apartment in the best neighborhood in KL. Lief Simon
The city has grown a great deal in the 200 years since, but it has not lost its colonial flavor. Wandering around the historic downtown, it's easy to imagine yourself living in another era and, as well, another place. Here, you're in old China. Around the corner, you could be in India. Another neighborhood is reminiscent of an old Malay kampong (village). Everywhere the architecture and infrastructure harken back to England's colonial heyday. Impressive British-colonial buildings serve the same functions as they did more than a century ago; they are banks, churches, and residential mansions. Many of the dilapidated Chinese shophouses have been scrubbed, painted, and renovated into attractive hotels, community centers, cafes, galleries, and private homes. The early Indian traders left their legacy, as well, in the vibrant Little India neighborhood where you find ornate Hindu and Sikh temples and a commercial district where you can shop for yard goods and clothing, incense, fruits, spices, herbal teas, and natural remedies. Other parts of the city reflect the Malay culture, with mosques and more shopping. Adding to the ambiance are dozens of murals and whimsical, wrought-iron sculptures depicting life in the early days of the city. The city is home to at least a dozen museums. Venues for indulging in high culture include the Penang Philharmonic, ProArt Chinese Orchestra, Performing Arts Center, and the Actors Studio at Straits Quay. Free concerts are offered in various locations across Penang Island during the summer months. Jungle parks reveal secluded beaches and indigenous wildlife. Amusement parks provide family fun. Expat clubs meet regularly to serve the large and growing foreign community. Everywhere are eateries serving delicious and inexpensive gourmet fare. When the sun goes down, cooking smells permeate the air and tables fill with enthusiastic diners from around the globe. Though there are many fine restaurants in George Town, the real food scene is in the cafes, open-air restaurants, and hawker stalls. This is where chefs prepare regional Chinese, Malay, and Indian specialties, Chinese, Cantonese, Hokkien, Hakka, Malay, Indonesian, Nyonya, Teochew, and Thai cuisines, all manner of seafood, and Western-style dishes, using recipes that have been perfected over generations. Prices are something to rave about, too. Unless you're eating in an upscale restaurant, you can eat very well for about US$3 per person. George Town is a great place to visit, but it's also a great and, thanks to the government's Malaysia My Second Home (MM2H) program, easy place to live or retire. The MM2H program provides you with a retirement visa that is valid for up to 10 years, duty-free importation of personal belongings, a duty-free allowance to import or purchase an automobile, and a reduction in the required minimum purchase price of a home in the state of Penang. If you don't have the MM2H visa, you can buy a home or condominium valued at 1 million ringgit (about US$307,000) or more. MM2H visa-holders can buy property on Penang Island for half that amount. Note that, unlike other countries in this region, Malaysia allows foreigners to purchase and own a clear title to land, houses, and condominiums. It is common for foreigners to move here, rent for a year or two, then purchase property or a home. As a result, sizeable expat communities have developed in the suburbs north of George Town. Some come to work at one of the many international schools in the area. Others have moved here with their school-age children, to raise them in this safe and peaceful place. Many others have chosen to relocate here for retirement, in luxury condos with ocean views or in the quiet residential suburbs. We make it a point to visit George Town whenever we're in the vicinity. It's always a fun place to linger. The people are exceptionally friendly, and language is not a barrier in this English-speaking country. We enjoy wandering around the historic downtown and, of course, the food. For so many reasons, George Town is a place worth returning to again and again. Wendy Justice
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The Malaysian government maintains that housing should be, first and foremost, for Malaysians. As the economy has grown, Malaysians have been able to spend more money on housing. Accordingly, the minimum purchase price requirements that apply to foreign real estate investors have been set purposely higher than most Malaysians can afford. This restricts foreign buyers to the luxury housing market. The minimum purchase price for foreign property transactions has increased several times over the past decade. As recently as 2009, a foreigner could buy any real estate in Malaysia for as little as RM250,000 (about US$73,600 at that time). This minimum purchase price doubled in 2010 and again in 2014. In early 2014, the government changed the existing housing laws. For the first time, MM2H visa holders could take advantage of a reduced minimum purchase price for real estate in some Malaysian localities. Although a minimum price of RM1 million (about US$310,100) has been established, some states and municipalities offer incentives to foreign permanent residents. As of March 2014, MM2H visa holders can purchase property in the state of Perak, which includes the city of Ipoh, for just RM350,000 (US$108,530)—a significant reduction from the RM1 million required for non-MM2H holders. Meanwhile, the minimum purchase price of property in the state of Sarawak, including the city of Kuching, is now RM300,000 (US$93,026). Effective this February, the state of Penang, including the internationally famous food and heritage city of George Town, allows permanent residents to purchase property for RM500,000 (US$155,044), in addition to paying a state levy of 3%. On the island of Penang, those without the MM2H status are limited to purchasing property with a minimum value of RM1 million for a condominium, or RM2 million (US$620,174) for landed property, in addition to the state levy of 3%. Foreigners with permanent residency can purchase a condominium in Melaka for RM500,000, but the minimum purchase price for landed property is set at RM1 million. Reports differ, but the official government MM2H website states that the minimum purchase price for property in Kuala Lumpur is currently RM1 million regardless of residency status. Until this year, the lack of capital gains taxes had made real estate attractive to investors. Foreigners from Singapore, East Asia, and elsewhere have purchased property with the intention of flipping it for profit a few months or years later. The change in the Real Property Gains Tax (RPGT) is the most significant law affecting the purchase and sale of real estate by foreigners. The RPGT was enacted in January 2014 to dampen what the government believed was foreign over-speculation in the real estate market. This new capital gains tax assesses foreigners a 30% tax on any property that is sold within the first three years of purchase for permanent residents—or sold within five years for nonresidents. Permanent residents are assessed a 20% RPGT if the property is held for less than four years and a 15% RPGT if the property is sold within five years. If the property is held for more than five years, nonresidents will be assessed a RPGT of 5% on selling. No RPGT is assessed for permanent residents who sell their property five years after the date of purchase. There is a one-time-only exemption on the RPGT if the individual sells a residential property and no RPGT assessed if the property is transferred from one family member to another. Although the state of Johor Bahru requires that foreigners purchase property at the normal minimum price of RM1 million whether they have permanent residency or not, there is no minimum price requirement in Johor Bahru's township of Medini. Medini is located in Nusajaya, which is part of the Iskandar Malaysia Special Economic Zone that encompasses the majority of Johor Bahru's metropolitan area. Iskandar is Malaysia's largest single urban development project to date. Key features of the Medini project include several low-density residential developments with amenities that include golf courses, a health and wellness village, swimming pools and Jacuzzis, 24-hour security, access to several international schools and universities, prime shopping areas, and an easy commute to Singapore. Foreign real estate investors are also exempt from the RPGT when buying property in the Medini development. This is currently the only place in Malaysia that does not assess the RPGT, so purchasing a home here can be an attractive short-term investment. The average residential value for property in the state of Johor has increased more than 45% over the past five years, compared to an average of just 30% in the rest of Malaysia. Foreigners must pay a state levy of 2% or RM20,000 (US$6,224), whichever is higher, when purchasing property anywhere in the state of Johor. This is the first time that MM2H visa holders have a real advantage over nonresident foreigners in the real estate market. Although the RPGT applies to all foreigners buying real estate (other than in Medini), the lowered minimum purchase requirements offer MM2H holders an incentive to buy, rather than rent, their home. The additional incentive of eligibility for 80% mortgage financing is another advantage for permanent residents. Complete information about the benefits and requirements for the MM2H visa can be found on the official website. Wendy Justice
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Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter.
Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.
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