Retire To The World’s Best Beach
As I’ve written recently, northeast Brazil, with its more than 4,600 miles of coastline and expanding middle class, is receiving a lot of attention these days in the run-up to the 2014 World Cup (which it will host). The country’s Grow Northeast program is pumping US$4.5 billion into Fortaleza’s Cerra State alone. As resident global real estate investing expert Lief Simon pointed out last week, there aren’t a lot of markets holding out serious potential right now. But there are a few, and this northeastern coast of Brazil is one of them.
Later this week, our man on the ground Anthony Archer is going to help us consider and vet current top real estate investment opportunities in this part of the world.
Meantime, today, let’s look at northeast Brazil, not from the point of view of the would-be international property investor, but from that of the would-be overseas retiree.
The beaches in this region are among the world’s most beautiful. No one who sees them disputes this. But impressive beaches (and the tourist resorts that accompany them) don’t necessarily make for good living.
Brazil has one of the fastest-growing economies in the world right now, which can make it easy to forget that this is a Third World country. Life the Third World has its pros, and it has its cons…
On the plus side is the low cost of living. Brazil is a place where I’d say you could live well for less than US$1,000 a month. Would you agree? That depends on your own definition of “living well.”
Here in the northeast of Brazil, even on a modest retirement budget, you could keep a maid, a cook, and a gardener. You could eat out a few times a week. You could own your dream house with all the trimmings…
On the other hand, you couldn’t expect the same amenities that you take for granted back home. If you can’t live without a regular fix of sushi from your local Japanese restaurant or kick-starting your day with a Starbucks Frappuccino, then you might want to rethink a move to Brazil. Outside the big cities like Fortaleza, Natal, or Recife, you won’t have a lot of choices for eating out.
What you will find in this part of the world, in abundance, is fresh seafood served at open-air restaurants, either on the seafront or a block or two back from the beach. One expat couple we know living in this region never pays more than 50 reals (about US$27) for a three-course dinner with drinks for the two of them.
Perhaps the biggest attraction to northeastern Brazil is its beachfront. Not only how beautiful it is…but also how downright cheap it can be. This is one of the few places remaining in the world where true beachfront property can be truly affordable. If your retirement dream is all about a home at the beach…of being just steps from the water…and waking each day to the sound of lapping waves…then Brazil is hard to beat. I don’t think you’ll find better beachfront bargains anywhere.
One thing that can put people off Brazil is the country’s complex tax system. It’s antiquated, and some of the taxes can seem nonsensical, but expats we know in the country assure us that it’s not all as bad as it sounds. Property taxes, for instance, are low (they vary by municipality) and applied to the assessed value of a property (which is generally lower than the actual market value).
Of course, if you live just part-year in Brazil, you don’t have to worry too much about the tax system (beyond your property tax obligations). Which brings me to another important point…
You probably only want to live part-year in Brazil.
In the last year, the bars have been raised on some of the qualifying categories for foreign residency. In the case of a “retiree visa,” for example, the qualifying age has been raised to 60 (from 50), while the “investor visa” now looks for a minimum of 150,000 reals (previously US$50,000) investment in the country. At the current exchange rate, that’s about US$81,500. Unfortunately, buying Brazilian real estate doesn’t qualify you for residency.
Even if you meet the qualifying criteria, you still may find that Brazil makes better sense as a part-year destination. American expats Will and Eileen Davis (our new Brazil Correspondents), for instance, recently began spending half the year on the Brazilian island of Itamaracà. Having lived in Ecuador for a number of years following their departure from the United States, Will and Eileen have decided that full-time living in a developing country isn’t for them.
While they appreciate the low cost of living that a Third World country (like Ecuador) offers–and the related bonus of being able to afford a much nicer home–in the developing world, they miss the amenities of a more cosmopolitan existence. For that reason primarily, Will and Eileen have decided to mix the best of both worlds and now divide their time between their island home in northeast Brazil and the bright lights of Punta del Este, Uruguay.
More from Will on the good life (part-time) in Brazil in tomorrow’s dispatch…