A Friend Emailed this article to me. Thought it would be nice to share. Feel free to post your opinions...
Belize It or Not
Friday May 19, 8:18 pm ET
By Mary Beth Franklin
It seems like the ideal solution for someone with a sense of adventure: Retire to a tropical paradise where the weather is always warm, the living is cheap, and the locals speak English. So when a letter arrived from Bill and Claire Gray, authors of the self-published Belize Retirement Guide, promoting a guided tour of the little Central American country formerly known as British Honduras, we decided to take a closer look.
Although the Caribbean washes up on its sandy beaches, this tiny country more closely resembles its Central American neighbors Mexico and Guatemala than the island playgrounds that many Americans favor for winter getaways. Belize is popular with divers, who are attracted by the second-largest barrier reef in the world, and eco-tourists, who come armed with binoculars to catalog the country's exotic birds and butterflies.
But what would it be like to live there: to rent or buy a house, to shop in the markets, and to negotiate the daily details of life, such as going to the doctor or gassing up the car?
We spent a week touring the diverse country, from its palm-tree-studded beaches to the lush rolling hills of its interior, home to spectacular 2,000-year-old Mayan ruins. Bottom line: It's an intriguing place to visit, but you wouldn't want to live there. Yes, it's warm--downright hot in fact. The daytime temperatures are generally in the 80s or 90s most of the year, and it's humid all year round, although the coastal areas are tempered by cool breezes. Throughout most of the country, the rainy season generally lasts from June to November.
Life can be cheaper than in the States. But if you insist on air conditioning, a car, and American-style food and appliances, it could cost you more. In fact, U.S. embassy personnel receive a 5% cost-of-living raise when they move to Belize because the State Department considers it more expensive than the U.S. If you never leave Belize, which is about the size of Massachusetts, you'll get along just fine speaking English. But if you want to cross into nearby Mexico, where most gringos do their shopping and visit top-notch medical and dental clinics, you had better learn to speak Spanish or bring along a friend who does.
Make no mistake: Belize is not an undiscovered Florida or Arizona. It's the third world (and after a tour of a local market where a butcher displays hacked-off cow's feet in the afternoon heat, you may wonder if there is a "fourth world"). The country is shrouded in an aura of postcolonial decay and looks as if nothing has been painted or repaired since the British packed up in 1981. It's a place with few rules, and even some of those are negotiable. If you want to get away from crowds, Belize may be your kind of place. There are fewer than 250,000 people in the entire country--about the population of Louisville, Ky.
Most American expatriates settle in Ambergris Caye (pronounced key), the largest of a series of atolls off the coast. Hundreds of Americans (no one knows for sure how many) live part-time or year-round on the 25-mile-long island, which boasts some of the most expensive real estate in the country. Thanks in part to exposure by the TV show Temptation Island, which was filmed here two years ago, half-acre beachfront lots now sell for $120,000 and up, and two-bedroom condos and townhouses typically cost $130,000 or more.
San Pedro, the island's only town, is about a 20-minute flight from the mainland. It is reminiscent of Key West 30 years ago, with ramshackle clapboard buildings and souvenir shops lining the town's sandy streets. There are few cars on the island; most people get around in battery-powered golf carts, by bicycle or on foot. But there are plenty of stray dogs around; you'll find at least one under your table at any local open-air restaurant.
Lane Llewellyn, a relocation specialist with Belize Business Development, says it costs a minimum of $1,500 a month to live in San Pedro, where everything from groceries to building materials has to be imported. Her own upscale lifestyle (which includes a full-time housekeeper whom she pays $75 a week) costs twice that amount. A two-bedroom apartment with air conditioning rents for $500 to $1,000 a month in San Pedro, compared with about $200 to $300 on the mainland. Water and electricity are extra, and power bills can climb to $250 a month if you run the air conditioning full-time and recharge the battery on your golf cart.
There are some real estate bargains, says Diane Campbell, a real estate agent who moved from Los Angeles to Ambergris Caye ten years ago. For example, in the Mata Grande area about five miles north of town, beachfront lots with 100 feet of beach frontage sell for about $160,000. A similarly sized parcel one row back from the beach--about 200 feet from the water's edge and with beach access--sells for about $32,000. The land has access to electricity but no roads. Residents rely on rainwater for most washing and household needs. To get to town, you must take a boat, call a water taxi or ride a bike along the beach.
Michael Fox, an American CPA who has lived in San Pedro since 1996, cautions real estate investors about potential pitfalls. Although there are no restrictions on foreigners buying land in Belize, there is also no regulation or licensing of real estate agents. He also warns people who move to Belize not to bring all their money with them. Instead, he says, you should transfer only as much cash as needed each month. "Belize has a stable government, but the country is hugely in debt," Fox says. If you brought all your money to Belize and the long-rumored devaluation actually took place, you could suffer a major financial loss.
CALLING SOME RETIREES
To attract U.S. retirees, and their dollars, Belize launched its Qualified Retired Persons (QRP) program in 1999. If you are 45 or older and have at least $2,000 in monthly income from any source--pension, social security or earnings outside the country--you can import household goods, a car or a boat duty-free, and pay no income taxes in Belize. You retain U.S. citizenship.
If you visit Belize, you'll undoubtedly hear about luscious tax breaks available to Americans. But the IRS gets a crack at a citizen's worldwide income, so any pension income, retirement-plan withdrawals and social security benefits will be taxed as if you lived in Boise, Idaho. Still, Stephen Thompson, an American lawyer specializing in international tax law who has lived in Belize City with his wife, Laura, and two children for the past six years, claims that moving to Belize may allow you to leave part of the tax burden behind.
Although using private banks in the Caribbean has long appealed to the world's wealthy, even retirees with more modest incomes can benefit from this strategy, he says. Thompson suggests moving your assets--including, say, up to $500,000 of tax-free profit from the sale of your U.S. home--into a limited liability corporation (LLC) set up on the island of Nevis and managed by you from your new home in Belize. The LLC then pays you a salary for running the business--which, Thompson says, qualifies you for a break that allows Americans working abroad to earn up to $80,000 a year tax-free. Thompson says he has set up LLCs--for a fee of about $2,500 each--for several Americans and, so far, none has been challenged by the IRS.
As part of the QRP program, retirees must deposit at least $2,000 a month in a Belize bank account, and then withdraw the money in Belizean dollars as needed. The government benefits from the infusion of U.S. dollars because its own currency isn't accepted anywhere else in the world. The Belizean dollar is officially pegged two-to-one to the greenback. But most Americans use private money changers for their banking needs because they can get a better exchange rate. The government has been cracking down on this shadow economy.
"You can live a good life on $2,000 down here--and that includes domestic help," says Thompson. "It's beautiful and the people are friendly, but it takes a certain mind-set to live in a place like this. If you are looking for a 24/7 supermarket, forget it."
So far, only about 200 people have enrolled in the QRP program, says Gina Anderson, who administers the plan for the Belize Tourism Board. (The three-page application is online at www.belizeretirement.org;
the program charges a $710 processing fee.)
NOT FOR THE FAINTHEARTED
Living in Belize requires self-sufficiency, patience and ingenuity. That's partly what attracted Tom McMaken, 55, and Chris Wilkonski, 49, when they visited on a diving trip four years ago. The Montana natives fell in love with the warm weather and coastal living, and wound up buying two and a half acres of jungle situated on a freshwater lagoon on the mainland. The lot cost $12,000, and they spent another $20,000 to clear it, carve out a boat slip and connect electrical lines. Tom and Chris spent $45,000 to build a three-bedroom cement house that relies on ceiling fans rather than on air conditioning to tame the local heat.
More typical land prices can be found at Consejo Shores, about seven miles outside of town, where one-half-acre lots on the Bay of Chetumal sell for $35,000 to $50,000, and interior lots with water views for $16,000 and up. Only about 40 homes exist so far in the sparsely populated community of full-time retirees and part-time snowbirds. During our visit, the only sign of life was a spiny-backed iguana crawling across a dilapidated tennis court.
Tom and Chris are now full-time residents under Belize's retiree program and enjoy a slow-paced life that revolves around fishing and water sports. They are convinced that the retiree program is a good deal, particularly after Chris's experience crossing the border in her 1996 Jeep last summer when she moved to Belize, driving all the way from Montana through Mexico accompanied only by the couple's two dogs. Before the Belizean border guards realized that she was part of the duty-free retiree program, they demanded $8,000 to bring her car into the country.
Tom and Chris spend about $1,000 a month to live on the mainland. They don't carry health insurance because excellent, inexpensive medical care is available in Chetumal, Mexico, about 20 miles away. A visit to the doctor costs about $20, lab tests and X-rays are available on the premises, and a stay in an adjacent hospital costs $40 a day. Many Americans in Belize do buy international health insurance in case they need to be evacuated to the States for emergency care.
Local produce is cheap. You can buy eight bananas or a half-dozen oranges for 50 cents. But you'll pay dearly if you crave American grocery items such as canned peaches ($2.50) or Oscar Mayer hot dogs ($5)--assuming you can find them. Electricity, which runs on the same voltage as in the U.S., costs about two to three times what you'd pay in the States. The Belizean government controls gasoline prices, and Internet and telephone service. Gas costs $3 a gallon; Internet dial-up service, $2 an hour. A five-minute phone call to the U.S. costs about $20. But American-style cable television--including movie channels--is a bargain at $16 a month.
One American says she stretches her budget by buying gas from local residents who fill their tanks across the border and siphon it off into buckets for resale. Why put up with such an inconvenience? She and her husband ended up in Belize eight years ago after their business failed in the U.S. They skipped out on their debts and slipped over the border. "It was bankruptcy or Belize," she explains matter-of-factly.
It seems everyone in Belize has a story--or an angle--and even photographs can be deceiving. Glaring white-hot days translate into azure skies and turquoise water on film. Scenes of desperate poverty--a lean-to, outhouse and yard full of chickens next to a premier hotel--look primitively picturesque. It is typical of the feast-or-famine sense you get in Belize. Or consider the symbiotic relationship between a hotel and a neighbor with a private pool. The hotel doesn't have a pool, so guests who want to swim pay the neighbor $5 to use his.
A SLICE OF EVERYDAY LIFE
Tour guides and authors Bill and Claire Gray moved to Belize more than ten years ago, escapees from the Hollywood rat race. They settled in Corozal when their son, now 16, was a little boy and wrote letters home about pioneer life in Belize. The response was so positive that they decided to write a series of books and reports about their experiences.
Their Belize Retirement Guide (Preview Publishing, $29.95) is partially responsible for raising the nation's visibility as a retirement destination. The Grays (an alias they say they use to cut down on the number of uninvited guests who turn up at their front door) occasionally conduct personal tours of Belize. Their most recent one, in January 2002, cost $2,000, including round-trip airfare from Miami. The January tour attracted more than 30 people, ranging in age from 34 to 73. Most were looking for a warm and cheap place to retire. A few were just looking for a place to disappear.
The Grays were eager to showcase the natural beauty as well as the warts of the tiny country they now call home. And they weren't selling anything. Although several tour members found Belize more primitive than they had expected and not nearly as cheap as they had hoped, about half of the group said they would return for a second look. Those wanting to try Belize on for size can enter the country on a tourist visa and stay for as long as six months. If Belize appeals to you as a retirement destination, take the tour (www.belizeretire.com
). The next one leaves in July.
We won't be on it. Once was enough.
--Reporter: MATT POPOWSKY