How to Retire in Nicaragua: Costs, Visas and More

By Ashley Chorpenning

Nicaragua is a small country in Central America that has coasts on both the Pacific Oceans and the Caribbean. The country also boasts mountainous regions and the largest lake in Central America, so the climate and abundance of outdoor activities have something for nearly everyone. Nicaragua is not only an easy place for Americans, Canadians, and Europeans to buy real estate, but also has a low cost of living and high quality of life for foreigners. Here’s a breakdown of what to expect when you decide to retire in Nicaragua.

Nicaragua has a retiree program similar to Costa Rica’s. First, someone must gain residency; then they can get a retirement visa. To gain residency in Nicaragua, a person must complete the following requirements:

• Provide a photocopy of your passport
• Include two passport photos
• Provide a birth certificate or naturalization document
• Have a clean criminal record
• Provide a health certificate
• Proof of assets equivalent to a return ticket to their country of origin.

To get a retirement visa, applicants must show that they receive a monthly equivalent of $600 in permanent income. This could be Social Security, a pension, or other irrevocable income. The applicant must also spend at least 180 days per year in the country. After five years, the visa holder can qualify for citizenship.

Understanding the cost of living is one of the most important factors when planning for retirement. The cost of living in Nicaragua is 39.4% lower than the cost of living in the U.S., not counting rent.

Rent is about 75% less in Nicaragua than the United States, according to Numbeo.com, a cost-of-living calculator. The average cost for a one-bedroom apartment in the centers of cities is about $233. This is compared to the national average of a one-bedroom apartment in the U.S. of about $1,360. For those who want more space, the national average for a three-bedroom apartment in the centers of cities is $475, whereas the national average in the U.S. for the same apartment is $2,209.

Foreign residents and Nicaraguan residents can purchase property in Nicaragua. Foreigners have 100% ownership and full property rights. For this reason, many people are purchasing second homes or primary homes in Nicaragua. However, the home buying process can be tedious compared to the U.S.

Before starting the home buying process, it is wise to start working with a lawyer who specializes in real estate. Nicaragua is notorious for having a lack of clear title on many properties, both in the countryside and in large cities, and a local lawyer can help to protect you as you purchase a property.

Unlike the U.S., the home buying process starts with an offer being verbally agreed upon between a buyer and a seller. Then, a deposit of anywhere from 5-15% is given to the seller and the closing process is outlined. The whole process takes about two months.

The legal process begins with the lawyer writing a few checks. The first is a request for the Libertad de Gravamen, a document that will show any issues with the sale, including any legal cases and other property records. Then, the lawyer will draw up a new deed and the buyer and seller will sign the document. At this time, the money will be transferred from the buyer to the seller. Title insurance is highly recommended.

The final steps are for the necessary parties to evaluate the property, and the buyer will pay the revenue office 4% of the value of the property. This transfer officially puts the property in the buyer’s name.

There are very few taxes on expats in Nicaragua. For example, you can import your household items free of tax up to $20,000, and your car tax-free up to $25,000 in value. Additionally, there is no tax on income earned outside of Nicaragua. The minimum age to receive these residency benefits is 45, but there are plenty of visa options and waivers that allow almost anyone to take advantage of the hospitality of Nicaraguan tax laws.

As a Nicaraguan resident, you will be eligible for the local healthcare programs. The Nicaraguan government has a free, universal health system that is ranked among the top half of all national healthcare systems, 71st out of 191, according to the World Health Organization. While healthcare is much more accessible in the larger cities, some expats do not find the national healthcare service adequate.

Nicaragua has a private hospital system as well. The healthcare costs at private hospitals will still be much lower than in the U.S. Many Nicaraguan doctors were trained in the U.S., and the quality of care is very high compared to other Central American countries.

While Nicaragua, which has a population of about 6.2 million, has historically been one of the safest countries in Central America, political turmoil since 2018 has sparked some 100,000 Nicaraguans to flee the country. Protests began nearly two years ago when the leftist government of Daniel Ortega took control over the army and police, began legislating by decree and implemented a law that allows him to run for re-election indefinitely. Civil liberties have been curbed, particularly those of media outlets, and peaceful protests have been met with violence.

However, tourist zones have heavy layers of protection as tourism is a huge contributor to the local economy.

Overall, Nicaragua is very welcoming to foreign residents. They have an easy path to citizenship, and the dollar certainly goes further in Central America than at home. If you are seeking beautiful scenery, warm weather, and an even warmer local charm, then Nicaragua might be the best place for you to retire.

But before you move, make sure to consult with a financial advisor who can help you decide if retiring in Nicaragua fits within your budget and will meet your needs.

• Consider talking to a financial advisor about about whether you’re financially prepared to retire outside the United States. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
• It’s tough to plan for your retirement if you aren’t sure what kind of costs you’ll have when you retire. To get an idea of what to expect, stop by our retirement calculator. To use this, you’ll need a few details about where you want to retire, when you want to retire and how much you have in savings.

Photo credit: ©iStock.com/dimarik, ©iStock.com/AnkNet, ©iStock.com/dimarik

The post How to Retire in Nicaragua: Costs, Visas and More appeared first on SmartAsset Blog.

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