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This morning’s AM Costa Rica has a writeup of a new Immigration draft that would affect applicants and those not already having Permanent residency. At the root it says Pensionado would require $2000/mo instead of $600. Rentista would require $5000/mo instead of $1000. Those already having temporary (Rentista/Pensionado) residency would need to qualify at the higher levels at renewal time.
Lots more in the article but that’s the short version. It isn’t law, just a draft. We’ll all be interested to see what pundits say is likely to happen.
CDI have asked three attorney friends to comment on this…
With regards to proposed changes, I would normally reply that we should worry about them because so many ‘proposed changes’ are never approved and we’ve been down this road before with similar increased income requirement proposals that were NOT approved.
Having said that, if someone is already retired here or, is seriously considering retirement in Costa Rica in a few years and are planning accordingly, they will naturally be concerned if their retirement income is lower than these proposed increased levels.
Of 1,054 VIP Members of WeLoveCostaRica.com surveyed:
37% are retiring within the next three years
18% are retiring within the next 3-5 years and
17% are retiring within the next 5-10 yearsScott Oliver – Founder
WeLoveCostaRica.comIt sure would weed out a lot of people. I don’t know any retirees in CR who have incomes of $2000 a month from SSA. Thankfully, I’m eligible for permanent residency 3 weeks after I got to renew my cedula in April, so hopefully I won’t have to worry about this.
The “lower than these proposed increased levels” will also depend upon the implementation. If the Rentista $5K/mo requirement is still per person as it is today, that’s $10k/mo or $120K/yr for a couple. The current five year ($60k/120k) requirement is rolled into a single year requirement. I’d guess not many couples have or spend $120k in the U.K., U.S., or Canada in retirement.
If the legislation actually passes, that means consciously evicting (I assume) a huge percentage of Rentistas not to mention Pensionados. So I’d hope you’re right Scott. I’ve seen other legislation arise and go poof, but the very existence of this one seems to indicate an anti-resident sentiment.
That would pretty much eliminate early retirement single pensionado applications. The average early retirement amount is between $1000 and $1500. Who knows what inflation will do to change that number upwards? Only some combined early retirement Social Security pensions could meet a requirement of $2,000 per person or per married couple.
That leaves rentista as the only route open which will also weed out a considerable group of Americans who cannot come up with 5 times the current requirement of a $60,000 deposit. How many Americans could afford to buy property, build a house and still have cash available for the $600,000 deposit?
For those who do not have that kind of cash, is there a third legal option? And what about those who habe already purchased property but who thn would not be able to use it except as a three month vacation home? What would that do to real estate values? Lots of stuff in the mix her to consider. It just somehow all sounds a little preposterous to me. Perhaps a smaller change might take place but the above proposed changes would only be considered if the governmen believed there was a big problem with current immigration.
My question is why is there an anti-pensionado/rentista agenda? It’s understandable that immigration gets tough on the unemployed/criminal element, but punish those with financial means that employ housekeepers, buy local products and stimulate local economies. It beckons the question, why? whats the motive in the mist of future [or forthcomming ] tough economic times? and would that drive some either back to their home land and/or neighboring countries [ie Panama and Nicaragua?]. And as someone mention the, abondoment of homes [ie real estate]. Is Aria tring to re-capture lands for the sake of ticos. sounds like a Socialist back door tactic “ala Chavez”
Safe to say we all hope this does not pass. CR would be the ultimate loser in this since a significant amount of development and construction funds are derived from migration, just as customs and technologies are, and have been throughout the history of man. However, I am getting the sense that there is a global movement for countries to become more “nationalistic” and in turn tighter controls on the movement of people between countries. This is very difficult to accomplish in today’s much more globally mobile, trade driven economy. Also, this smells like a bit of US influence involved for it would benefit the US government significantly to keep as many taxable assets (the citizens) in country to fund the entitlement machine.
Edited on Nov 03, 2008 10:40
grb, the assets available to the U.S. are taxable regardless of where the taxpayers live. the U.S. IRS Code provides for universal taxation of U.S. citizens regardless of residence, so that can’t be a motivator. If I, as a Social Security beneficiary, live outside the U.S., I must still pay all the taxes that any other U.S. citizen pays, but I don’t have equal access to Medicare. So in reality, the more retirees who leave the U.S.the better off the entitlement programs are (collectively).
My guess is that Costa Rica would like to be a haven for more affluent expatriots rather than poorer ones. Indeed, why recruit a bunch of liabilities for Costa Rica’s CAJA medical system from among a population group who contributes relatively little to the economy? To me, it makes pretty good sense, economically, to exclude the lowest income tier of aspiring residents. Whether a $2,000 monthly minimum is reasonable, however, is another matter.
Great idea to make these changes so “poor” gringos (and others) stay out of this country. Can you imagine many thousands more coming here spending as less as possible ? “Older” people who use (and abuse) the cheap medical system ?
Renewals ? Many will have to leave the country and sell their homes. BUYERS-market will soon be here !
Inside information from the Arias-Administration: this time they are serious !
This doesn’t surprise me very much because they did the same thing in Mexico. When we first started looking there as a retirement place the qualifying income was $500 a month. Without two years of our buying property there the income needed for residency shot up to $2500 a month. I asked a friend of mine why that happened (his grandfather had been the President of Mexico) he said the country simply didn’t want any more poor people; they have plenty of their own. I would imagine that CR feels pretty much the same way. There are a lot of pensionados who are trying to live on less than $1000 a month. They’ve tried to pass this crazy law plenty of times before and it didn’t fly so I am sure there will be some serious lobbying taking place by the ARCR, similar to what they did last time when they wanted to raise it to $3000 a month. But seriously, can you blame a poor country like Costa Rica for not wanting poor Americans? I, too, wonder if there is any US influence on this new proposal. It wouldn’t surprise me a bit if there was.
Agreed Dave, but not assets that are in-country, by whatever means, or any income earned in CR up to $84K +/-, if ever claimed.
I am talking about people who are not “working” anymore and ceased to do so earlier in life that are planning to move to CR. These individuals opt out of the system early with respect to taxes on wages. The issue is that there is not any social security or medicare to tax without wages being earned for neither the employee or the employer for that total of 15.3%. With the requirements to live in CR being made so much more stringent financially, many of those who could have retired here early would not be able to. Therefor, they are more apt to stay and work in the US and pay into an entitlement system that is facing some gargantuan shortfalls, which will prolong the supposed “solvency” of the system. That was my point. Any financial advantage of moving to CR with such high $ requirements would be essentially eliminated.It seems Don Arias has completely lost his mind! Dumping Taiwan for China with their human rights problems… a secret slush fund to grease folks that he wants to reward… open pit mining… and now this MAJOR change that ,if passed, will have a BIG impact on folks thinking of relocating here as well as those already here! Does he think the flow of money, jobs, and investment will increase with such a move? It makes you wonder what he’s thinking!!!
No doubt these changes will have a MAJOR effect on good folks here that are trying their best to play by the rules now! Does he or anyone really think this will stop the flow of criminals and unwanted illegal migration? Is he looking to dump the lower income LEGAL residents already here? I can’t wait for the other shoe to drop and see that they want a HIGHER rate for required CAJA coverage for gringos… just a guess but we’ll see how that pans out!
We’ll have to wait and see if this passes in it’s current form… my best guess is it will see some changes before it makes it’s way to law!
Funny how this comes out just as the US is just about to elect a socialist! It might be time for a worldwide revolt folks…. it’s coming!
Edited on Nov 04, 2008 06:15
Stop using that “S” word. You’ve been watching waaaaay too many McGrumpy campaign ads. Next thing you’ll be telling us Obama was born in Kenya. Sheesh.
Man plans and God laughs. This is deeply disturbing to me because I am (or will be) one of those living on Social Security. I’ve committed the bulk of my retirement savings to building a small house in Perez Zeledon and it is in the initial stages of construction now. I assumed that having my own house and vehicle would allow me to live a comfortable life with my SS benefits. However my payments will be well below the $2000 minimum. I could handle twice the current $600 per month but $2000 is more than three times that figure. What happens if this law passes? I guess I’ll have to sell my house at a tremendous loss. It will make my retirement considerably less comfortable than if I had not considered the move to Costa Rica and just stayed in Chicago. I’m afraid that my dream of Pura Vida may well become a nightmare.
I suspect that many Gringos will be affected in this way. What will this do to the value of property in Costa Rica?
Editer
Don’t know you sir but wish you well.
Try not to worry as I read this has all happened before and theres a long way to go to make it law.
Also I would bet in 2010 the current holder of the top job has but no chance of remaining.
Its only a few months since Gordon Brown said “no more boom and bust” – look what happened – its goodbye to him then as well about the same time.
Im too young to retire, but was going to go to CR to look around for a year (6 months lol) then go rentista – if this goes through Ill be going somewhere else BUT I will still spend time there. Hell I never earned 5000 USD/month as a senior manager in the uk lol
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