Talking Expat Taxes #3

Doing good. How are you? Thanks for having me on your podcast.

Yeah, so again, thanks for having me on. I actually was born in the Buckeye State of Ohio, went to school at WVU, West Virginia University, got into a sales role with a pharmaceutical company and did that for about six years before moving to Chicago, and doing medical device sales there for the last 11 years before the move to Costa Rica. So one of the things I did in medical device sales was concentrated on startup companies in the neuro-modulation world. And it was great doing that. I think a few things kind of happened to push my fiance and our dog down here. Number one was COVID. I think that pushed a lot of people in different directions, kind of made you think a little bit differently about where you want to live, what you want to do, what you're willing to risk making some big moves. So Costa Rica is always one of those things, it'd be great to retire there, maybe move down there, mid-fifties, do some real estate, but kind of just, you know, enjoy the weather, enjoy the sun. And then it came a point to join another startup company. And this would have been like the fourth one, kind of wanted a break from that. It was a situation where my fiance works remotely. She always has. So that was a big, a big part of it there really helped to kind of push it down here. And then, yeah, we decided, we decided to come down here. We vacationed a lot here. Our story's kind of boring, fell in love with the culture, the weather, the scenery, the nature. I mean, there's so much to do and explore in this country. Then I remember we came down here on what we call like a work trip. It's like, all right, we're going to go to Costa Rica. We're going to wake up at the same time. We're going to wake up and we're not going to have fun. This is going to be a work trip just to see what it's like. Next thing you know, we're on the beach in the morning and the mountains at night. And it's like, that's life.

Exactly. And I think strategically we did it smart. I think we planned the trip for probably about 14 months in advance and that allowed us a good amount of time to take care of issues in the States, be able to relocate. I mean, just a lot of stuff goes into relocation, you know, even state to state, but internationally it's a whole different story. So, I was glad that we had the time to kind of prepare. What I will say is I listened to so many podcasts about expats moving down here, what to expect. And, you know, I'm not a patient person by virtue anyway, so it's been a challenge. But in my head, I was like, all right, you know, when we get there, I know it's going to be slower. I know the bank's going to be frustrating, but man, you don't know what you don't know until you get here. And a lot of those frustrating things, you know, you deal with them. You look for efficient ways to do things. A lot of the lessons we learned here, we're still learning. So it's great, but you know, like you, like you alluded to, there's always things you're adjusting to, trying to figure out and navigate the entire system.

Yep. And it's different for everyone, you know, like what are you coming down for? Retirement? Do you want to be kind of off grid in the mountain or are you going to be working? You know, a lot of it depends on kind of what you're looking for and that may guide you to different areas of Costa Rica. You know, like in the South, it's not, it's, you're not really close to like a major city or anything. And that's okay if you want to kind of be more isolated until that area builds out a little bit.

100%, it's kind of a different mindset. And, you know, clearly, it can be a risk leaving what I've been doing for so many years and having success in that industry and kind of come to a brand new career, if you will. And I have my license in the States, real estate. It's mainly just on referral status. So I've always been involved, but, you know, this is the first time full blown, like, let's go, let's build this and do it.

Doing a little bit of everything. So I joined VMAX Oceanside here in Jaco Beach and really my clientele is looking for existing condos on the beach, Airbnb properties, I call it kind of a lifestyle investment. It's something that they want to enjoy themselves, come down maybe once or twice a year and then in their off time, rent it out, especially during the busy season. But yeah, that's kind of the clientele. I do have a gentleman who's purchasing two lots in Hermosa, Jaco, beautiful Pacific ocean view. So he'll probably start to construct in about a year here. And then we are introducing a brand new oceanfront tower as well. So a little bit of everything, a mix of, you know, land, condos, homes.

It is absolutely.

You probably wouldn't recognize a lot of it. Even since we've been coming on vacation here yearly, I mean, it's changing. A lot of people are coming down. A lot of people are coming down for six months at a time. They found a way to be remote workers. Maybe they're freelance. A lot of people are looking to move here in terms of things aren't so great right now in a lot of people's eyes in the States and in Canada.

Those are my clientele, absolutely. Yeah, and probably more Canadians, honestly, right now than people in the States, but it's really starting to pick up. I'm starting to have those conversations with a lot of people about maybe getting their foot in the door, working towards residency, maybe not working towards residency, but just kind of putting their foot in the door now, knowing real estate's probably not going to get any cheaper here. And then with the intention of possibly relocating down here, most people I don't think are 100% abandoning their country. I think most people are hanging onto a property, whether that be a primary home in Canada or the States or a secondary property, something to go back to and enjoy.

A hundred percent. And I get that question, probably the top three questions I get, like what's financing look like? And you get financing here, you're going to jump through a lot of hoops. It's not easy. You're going to pay a higher interest rate. The terms aren't as favorable as they would in North America. There's also a company I'm starting to work pretty closely with out of Salt Lake City, Utah, who will do lending for North Americans buying in Costa Rica.

Yep. That's 100% right. It's structured like a mortgage, but technically it's not called a mortgage. It's more of a, I'm not going to call it a hard money lending or loan, but it's similar structure to a mortgage. So I'm working with them a little bit more to find out more details. But primarily what I see is a home equity line of credit being taken out on a home in the States and wide ear for cash. I will say also, you see a million dollar house here, and depending on where my clients are from, they'll laugh when they see the million dollar house. If they're from Southern California or something, it's like, you know what this would cost in San Diego, San Francisco, wherever, New York, Chicago. So I do think prices are going up, but I think the value you get here compared, especially in the luxury market, compared to what it would cost you to be on the beach or have a villa in the States.

Exactly. And there's still areas that are to be developed. You know, there's always that next beach town that gets a good reputation. And then you start to see pavement come in with regard to the roads and you can kind of follow the money that way.

Yeah, I think you're better off trying because you can hear more. Obviously, you open up your clientele a little bit. If you can't speak Spanish, it's hard to work with someone who speaks Spanish. But primarily like where we're at in Jaco and even Guanacaste, usually anywhere on the beach line on the coast where it's a tourist destination, you're going to get a lot of people who speak English. And it's been hard. I wouldn't say I'm failing, but it's a D. So I'm trying. I'm picking it up a little bit better. I have lessons that I'm going through, and I'm starting to more or less hear it a little bit better. But you can absolutely get away with not speaking Spanish if you're in a popular expat town. And the locals here speak perfect Spanish too, or I'm sorry, English too, in Jaco on the coast. It's also hard because sometimes you go out and you prepare and say, all right, I'm going to speak Spanish. I'm not going to speak English. And they'll ask you what you want to eat, and you say it in Spanish, and they revert back to English sounding English. So, yeah, that's great.

But that's, and you brought up an interesting point. Like that's something with Jaco, you know, it's, it's a lot of expats, but I feel it's a lot more local too, because we're only an hour and a half away from San Jose. So you get a lot more local vibe here.

Yeah, it is. And that's why the beach is so popular. There's a lot of people going to Manuel Antonio, and this is an hour from Manuel Antonio. So it's a great destination for people that just want to stop through maybe for a night or two, or plan a whole week and just enjoy all the different areas outside of Jaco. It's kind of funny, I'm a big college football fan so the Saturdays are kind of like religious for me and I found my bar here in Jaco who allows me to come in, I wait in line to get in, even though I'm the only person in there, so they have my games on all the TV screens and they got audio on which is rare. I'm usually the only guy in there like rooting for my teams. We went to Guanacaste for a weekend and it was like Illinois, Purdue, LSU, all these t-shirts you saw, so it's a lot more. I felt like when we were up there, it was more expat, a lot from California. I call it California money.

We went to a 4th of July party recently at Los Suenos and I don't know, it felt too fake. We ended up leaving and I don't even know if I saw fireworks 4th of July, but yeah, it looked different. There is an expat community and it's friendly. And the fact that no one's like, Oh, you're moving here. You're late. I was here five years ago. It's not like that at all. I feel like everyone for the most part is helping you out. Hey, this is where you need to go get this. This is who you need to talk to for this, you know? So we're learning a lot from our connections. We met a lot of people here, that are our friends, both local people and also people that come down six months at a time. So right now, a lot of our friends are back in Canada or back in the States, but we know they'll be returning when the weather gets nasty, in a few months.

So, for your listeners, I swear to God, we did not have this conversation before we started the podcast, but one of my biggest hurdles, frustrations, is the banking system here. I'm still dealing with it since we moved here, the example I have, and maybe it's not like this for everyone. Maybe it depends on what bank you go to and I'm not going to name drop the bank, but I went in with a colleague of mine, she's Tico. She's local. And she's kind of like the girl that you take to the bank because she knows the language. She knows the form. She has everything ready. So you wait in line for about three, three and a half hours. And that's kind of what you do, depending on what bank or what town, you take a number. They call us up there. She's translating. I'm basically, I don't know, in my phone. We waited about two and a half hours. I don't know what's going on at all. It's just forms back and forth. So after about five hours, maybe six hours, they say -- Congratulations, Mr. Comstock, you now have a bank account with our bank and it's really neat and you can do a lot of things online and you come back next week. We're going to give you a debit card for Colones, and we'll give you a debit card for USD and it'll be great. Welcome. So, you know, I'm pumped up. Go back next week and we don't have your cards. They're in San Jose. So, well, what do you want me to do? Come back next week and we'll have them. Okay, this is annoying. So I go wait in line, come back. Actually, we don't have them. I'm like, still in San Jose? I'm like, no, they're lost. So the branch manager comes out and he's like, hey, I'll email you when we have them. We got to track them down. So about maybe a month goes by, I get an email. Hey, we got your cards. They're here. And I was at a medical conference in the States and I wasn't going to be back for a week. So I wrote him right back. I'm like, great news. I'll be back on Wednesday of this week to pick it up, or next week. So Tuesday comes around and I send him a confirmation email. See you at 10 o'clock. I'll show this email to the guard so I don't have to wait. So I get there at 10 in the morning and I meet with him and he basically says your cards aren't here. I said, no, here's the email from you. Well, we destroyed them last night because they've been here for over a week.

So now what I do, and this is one of the lessons I've learned, is build a team around you and go everywhere with them. So I go to the bank now and I take my attorney and my accountant, you know, it's like help here because we got to get something going. So, you know, as I collect commissions and I pay tax, it's important to obviously have a bank account set up here and to pay utilities and everything else.

Or you just are so well-researched. No, I won't even say that. Yeah, it feels like you have to know the right person to talk to the right person to get anything done. The bureaucracy here is layers and layers and layers.

Yeah, good luck. Maybe they'll send you to San Jose to get a form BC, but you can't pick that up on a Tuesday. So you need to come back on a Wednesday to get the form. And then you come back, not the right form. No, there's hoops to jump through.

In these days, what you pay for is what you get, honestly. Like if someone wants to come down here and learn the tax system and you could communicate, man, there's a lot of opportunity here. Hard to find a reliable accountant. I think I have now. And some of the biggest difference here is you're collecting EVA, you're paying EVA, which is the tax here, the national tax. So you have to remit that to the hacienda every month. Whereas in the States, it's not the month of reporting. You know, you can do it once a year, keep track of your finances. But I got it figured out and it's actually pretty cool. There's a software system that basically collects your electronic receipts and then file them away. And at the end of the year, or I'm sorry, at the end of the month, you send a report in. So it took me a while to learn that, but as we're settled, there's some aha moments now.

Yeah, we moved last year, we're about 10 months in, actually to this day.

Yeah, yeah. And I hope throughout the podcast, I didn't make Costa Rica sound too bad because the advantages far outweigh the frustrations at the bank and doing anything else. I mean, seeing the sun every day is phenomenal, especially if you're coming from the Midwest states. And just the amount of activity to do. It is a more slow lifestyle. It's more laid back. I really don't feel that yet because I'm trying to grow a business. So it's go, go, go. But I can appreciate it and I think I will get there. But to answer your question regarding what to expect, I think give yourself time. I don't think move on a whim. I think research as much as possible. Figure out what you're going to do. Figure out your income. Is that going to come from Costa Rica? Is there a job you can do? On your last podcast, there was conversations of legality behind working and just moving here. So figure it out. Find a good team of people that you communicate with and make them your best friends. And depending on how you want, where you're going to live. It's costly. It really is. On a tax, which you know, you pay so much in import tax. Property tax is extremely cheap here, 0.25% of the appraised value, but where they get you is the import tax, so electronics, vehicles, I mean, it's not cheap to move here. You can move off the grid and have your own fruit trees and grow your own vegetables and save a lot of money, maybe get some solar panels up. But for the most part, I would say if you want to come to Costa Rica and kind of live a lifestyle that you're accustomed to in the States, it's not cheap. Real estate taxes are about the only thing I would call somewhat cheap still, everything else - whew! But I think that's everywhere though, right? I mean, it's inflation, groceries aren't cheap.

No, cars here can be double or triple the value. And if you try to bring it in from the States, it's complicated. And typically, you're going to pay a tax on what it's worth here. We research that. That's another good point. Unless it's like a car you really cherish or it's something you don't want to give up, it's probably best to bring a suitcase or two and then rebuild here, buy here, maybe sell off some assets in the States and come down with some money.

100%. And it's realizing that. One of my local friends said something to me months ago and it just stuck. He's like, dude, it's going to take you about a year, year and a half to decompress. And I kept thinking, what's that mean? What's that mean? And he didn't lead on to a lot, but I know exactly what he's talking about. Kind of just letting go and, you know, enjoying the vibe.

No, you can't. And for me, like I said, growing a business and doing the right things to grow it appropriately, it's a lot of work. And I know it would be, and it's fun. I'm having a blast. And still to this day, we're going to the beach in the morning and in the mountains at night. And it's just, you know. Yeah, it's a great move. It's a fun move.

I bet. You can probably get so many questions, especially this year, an election year, half the people are pissed, half the people are happy. So you're going to get that.

Absolutely. I appreciate it. And maybe connect soon again and talk about some real estate down here. Thanks, Alex. I really appreciate it.