Affordable Tax-Free Caribbean Lifestyle and Real Estate

Nov 20, 2022 | Private List update

https://youtu.be/GnVD6Fxb1xY

Bocas del Toro Caribbean Island Real Estate or a Toronto Condo? (https://youtu.be/GnVD6Fxb1xY)

Video: Bocas del Toro Caribbean Island Real Estate or a Toronto Condo?

Video Transcript

Panama is so much more than just Panama City.

There is a little slightly hidden gem in Panama that is well-known on the backpacker trail and in some circles but not really for “normal” people looking for a lifestyle and tax residency change.

Bocas del Toro

Panama

It really is a truly unique place. Composed of a string of beautiful Caribbean islands, the area has much to offer:

Amazing Caribbean water
An airport with multiple flights a day to Panama City
Bars, restaurants, amenities, etc
An International School
Easy residency as per Panamanian immigration rules ($200k real estate or term deposit for most Westerners)
Decently priced island real estate
A great tax system as is the case in all of Panama
Very decent internet

I met with JB, a Texan who has been living in Panama for almost 25 years. He took me on his boat to a small island to have a look at a nice piece of property.

The goal of this video is not to do a property viewing (I cut it short, the house is bigger in reality) but rather to demonstrate the sort of value, lifestyle, and tax arbitrage that can be achieved by moving to such a place.

My tagline is not just a tagline

When I say “Exploring a World of Opportunities” I really mean it.

Many people are stuck in Toronto, or Seattle, or London, are working from home, paying lots of taxes, and dealing with questionable weather.

A life of Caribbean waters, islands, and lower taxes (for Americans) or even zero taxes (for everyone else, if well-structured) is entirely achievable.

Is Bocas del Toro Real Estate a good Investment?

I would not go into Bocas del Toro real estate hoping for great rental yields and aiming for a quick flip. The way I look at this market is that it is a lifestyle and tax arbitrage destination, as well as a good long term play.

Prices have gone up a lot over the past decade, but the reality is that it is still more affordable than other Caribbean destinations, yet Panama has much more to offer. I think it’s a good play for wealth preservation and long term capital growth.

But hoping for great short term results? This is not the right market for you, unless you encompass personal tax savings thanks to your new Panamanian tax residency 🙂

If you’re interested in finding more about Bocas del Toro lifestyle and real estate, feel free to get in touch with JB here.

To a World of Opportunities,

The Wandering Investor

Other articles on Panama

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Partial transcript of “Affordable Tax-Free Caribbean Lifestyle and Real Estate”

LADISLAS MAURICE: Cool. JB, thanks for showing the house around. It’s lovely.

JB: My pleasure. It’s my pleasure.

LADISLAS MAURICE: So what type of people move here to Bocas del Toro?

JB: It’s, most recently, it’s been the digital nomads. They can, obviously, work anywhere in the world, and why not work in the Caribbean if you get a chance to do that? So it’s a much younger crowd coming down here now than compared to the retirees that we used to have. So that’s a total switch as far as the type of people that are coming in. A lot of people make Microsoft wages here in Bocas, and that’s a big, big plus.

LADISLAS MAURICE: Nice.

JB: You can live nicely that way.

LADISLAS MAURICE: Yeah, because it’s definitely a bit more expensive than the mainland in Panama.

JB: Yes, that’s correct.

LADISLAS MAURICE: It’s not like the prices are crazy either. You can get a good burger in one of the cool spots for like, $8, $9.

JB: Correct.

LADISLAS MAURICE: I mean, if you’re earning $70,000, or six figures, you’ll live here very well, Caribbean lifestyle, much cheaper than the typical Caribbean islands. And it’ll be very, very comfortable. And you’re right about the younger crowd, because I came from Boquete, where I was also with people from your agency. So JB also has an agency in Boquete. And there, it’s a lot more retirees. There are a few entrepreneurs and digital nomads, but it’s skewed towards retirees. Here, it’s skewed towards younger people, also younger families. And the internet is quite good. So last night, I was uploading some stuff on YouTube, and it was relatively fast.

JB: That’s so important to have here.

LADISLAS MAURICE: Yeah, exactly. Because, sometimes, I travel in some areas, and I can’t upload, it’s a problem. Here, it wasn’t an issue at all.

JB: That’s good.

LADISLAS MAURICE: And I’m a heavy user.

JB: Going back to what you were saying about more expensive, it’s probably the most expensive place in Panama. Compared to United States, Canada, or anything else, it’s a very cheap place.

LADISLAS MAURICE: It is, it really is. And even compared to Panama City, this is the price this of like a nice condo in Panama City.

JB: Right, right.

LADISLAS MAURICE: So either you got a nice condo in Panama City, which will be sitting empty most of the time, because they overbuild in Panama City. I, personally, would not invest in real estate in Panama City, except if I wanted to live there. Even then I might prefer to rent. But this here, I feel you get much better value for your money, you get something that really is truly unique. For young families, there’s an international school as well, right?

International School in Bocas del Toro

JB: That is correct. And that’s a big factor in a lot of these younger people bringing their kids down now, because before they didn’t do that, and there was a lot of digital nomads here but their kids weren’t here. And now, totally different. Beautiful school, I believe it goes from it’s called the Tangerine School. And it goes, I believe, from kindergarten up to maybe the 12th grade. And it’s an accredited school, so you’d be able to take that and go to university or whatever. But the unique part about that is that there’s all these students from all over the world.

LADISLAS MAURICE: Nice.

JB: So your child might be able to pick up about two or three other different languages.

LADISLAS MAURICE: Very nice.

JB: So that works out pretty well. Yeah, so.

Delivery services in Bocas del Toro

LADISLAS MAURICE: Very nice. And let’s say, just in terms of convenience, let’s say, I buy this house, you and I are chilling, we’re having a beer right here, and we get hungry for whatever reason.

JB: Yeah?

LADISLAS MAURICE: And I say, “Hey, JB, let’s get some sushi.”

JB: Yeah. We can do that.

LADISLAS MAURICE: How do…

JB: We can do that. What we do is…

LADISLAS MAURICE: So what do you do? How does this work? Because I mean, we’re literally on an island 20 minutes away from the main town.

JB: Well, what you do is you call the Cooperativa, the water taxi cooperativa. First off, you call like a sushi place, or a pizza place, and you order a pizza and say, “My driver will be there to pick it up.” And so they cook the pizza and they get the sushi together. And your taxi driver goes over, picks it up, pays for it. We always pick the guys that have money.

LADISLAS MAURICE: [laughs]

JB: [laughs] You know, very important. And so they pay for it. And when they pick it up, and then they come back and we give them their usual fare back, and we’re sitting here we got– they’ll pick up beer, they’ll pick up whatever else you need.

LADISLAS MAURICE: How much for that like run cost?

JB: Here, in this place, right here, this is about, it’ll cost you about $15.

LADISLAS MAURICE: $15?

JB: Yeah, yeah.

LADISLAS MAURICE: Okay.

JB: And they’ll stop and pick you up some beers, some soft drinks, or whatever.

LADISLAS MAURICE: Okay, so a bunch of stuff.

JB: Yeah.

LADISLAS MAURICE: They can do your grocery shopping, essentially.

JB: Almost. Almost, yeah.

LADISLAS MAURICE: For $15?

JB: Almost.

LADISLAS MAURICE: And bring it up and you don’t have to jump on the boat, deal with anything, you just sit here.

JB: Right, right.

LADISLAS MAURICE: You can just watch YouTube or do whatever it is you do?

JB: That’s the key.

LADISLAS MAURICE: [laughs] Okay.

JB: [laughs] It wasn’t always like that, but it is now.

LADISLAS MAURICE: Cool, cool. All right. So again, compared to a lot of the Caribbean islands out there, it’s a lot more affordable. And again, it’s a country with very decent infrastructure. There’s a lot to do in Panama, which is not the case with a lot of these other Caribbean islands.

JB: Yeah.

LADISLAS MAURICE: So this is, in many ways, it’s a bit of a secret. It’s quite known on the digital nomad/backpacker kind of space. Like I was walking, yesterday evening, and there are these like cool hostels, tons of young people.

JB: Right, right.

LADISLAS MAURICE: But in terms of people looking for Plan B, or who just want to just chill and reduce their overall tax rate, it’s not quite there yet on the map.

JB: That’s good. And that’s right. And we kind of like that. It’s kind of like the fact there’s no cruise ships that come in here. And if they do, they anchor out. That the cruise ships– this is not Cancun. It’s never going to be Cancun. And if it ever did turn to Cancun, a lot of us would leave.

LADISLAS MAURICE: Yeah.

JB: But it really is. It’s a rustic, true, every day is an adventure kind of place. It’s exciting. You and I were talking earlier, you can be as social as you want to be here, or you can be as reclusive as you want to be here. And that’s a big factor, a lot of people can moderate that. And it’s a wonderful life.

Spanish in Bocas del Toro

LADISLAS MAURICE: And you don’t really even need Spanish to survive, correct?

JB: I’ve been here 20 years, and I’m not proud to say but I’m not fluent. I can go anywhere, do anything I want to do, but I am not fluent. English is predominant language here, actually. I think English is almost the first language then Spanish.

LADISLAS MAURICE: And a common issue with island living is just access to things.

JB: That’s correct. And we’ve been very, very fortunate. Over the 20 years I’ve been here, when I first got here, you couldn’t hardly get anything. And now, Amazon is all over the place. We have two facilities that you can ship anything from anywhere in the world to you, anything from credit card up to a bicycle.

LADISLAS MAURICE: Right here on the island in Bocas?

JB: Right here on the island, yeah. There’s two organizations that do that. Makes a world of difference. You also if you go to the second largest city is David, and you’re building a house, you go pick out your tile, you pick out anything that you need for the house. And you literally just give the receipt to a delivery person that exclusively comes here, from David to here in a big truck over the mountains, comes at twice a week. And then there’s the same thing in Panama City, you can get whatever you want to get, just leave the receipt there, the driver comes and picks it up and delivers it here. There’s a ferry here. Everything we have on these islands comes through that ferry, from petrol, to food, to just about everything that’s here. So that’s made life a lot easier here.

At first, like I said, 20 years ago, it was real rustic. And particularly, that’s what I was looking for. But a lot of the other Caribbean islands were so developed and the cost was already through the roof. And came here and a dollar went a long way. And it’s American dollar.

LADISLAS MAURICE: Yeah, it’s true.

JB: Which it also was important to me and still is. So yeah, it’s a big difference. A big difference.

Lack of hurricanes in Bocas del Toro

LADISLAS MAURICE: Does make a big difference. And what about hurricanes?

JB: Well, we’re lucky there, we’re very fortunate. We’re too low in the latitudes to get a hurricane. And we’re seven or nine degrees off the equator, and you need to be, I think, it’s 10 degrees where the winds can start kicking up everything. So we’ve been very fortunate. That’s a big plus for this area. And there’s a lot of boaters that come down here during hurricane season. They stay here, then a lot of people, the fact that we don’t have hurricanes makes investing in properties, especially structures, a little bit more sound.

LADISLAS MAURICE: Yeah, definitely. This is crucial, crucial in terms of preservation of capital, your property isn’t just going to fly away.

JB: [laughs] Yeah.

LADISLAS MAURICE: [laughs] Which is the case in many of these Caribbean destinations.

JB: Yes.

LADISLAS MAURICE: Every five years, they get completely wiped out.

JB: I have friends in Belize that just cringe every year that hurricane season is here. They’re going, “This could be the year.”

LADISLAS MAURICE: [laughs]

JB: [laughs] “This could be the year.”

LADISLAS MAURICE: Yeah, it’s not fun.

JB: Yeah. No. Not at all.

LADISLAS MAURICE: That’s not fun.

JB: Don’t have to worry about that here.

Investment thesis for Bocas del Toro

LADISLAS MAURICE: Cool. So essentially, the way I like to see this place is you don’t come here for rental income. I see this place as a good destination for capital preservation in a stable jurisdiction, and where you buy a piece of property that is prime and absolutely unique. It also offers a great plan B in terms of potential permanent residency here for the investor and his whole family. And if he moves here, then also, it makes a big difference from a tax point of view if things are structured properly. And then the lifestyle is very comfortable, it’s a lot more affordable than other Caribbean islands. There’s a school, there’s an airport that goes straight to Panama City here a few times a day, right?

JB: Three times a day, and during season, four times a day.

LADISLAS MAURICE: Great. So great connection. So you’re not lost in the middle of nowhere.

JB: Sometimes, it feels that way.

LADISLAS MAURICE: [laughs] Which is good. Which is what a lot of people want, actually. And you have access to all the goods and services that you would want, essentially, thanks to Amazon deliveries, etc. And even the town itself has a lot of cute shops, restaurants. It’s not backwards at all.

JB: An interesting point on this is you don’t come down here to make money. I mean, like you said, you preserve your capital and everything else. It’s all about lifestyle. There’s an old saying, if you want to make a million dollars in Bocas, bring two.

LADISLAS MAURICE: [laughs]

JB: [laughs] But as far as investment, as far as houses and things like that, you’re going to live in the house, or you’re going to rent the room out to Airbnb, or along those lines. So you’re making lifestyle money, you’re not going to turn a $200,000 house into a million-dollar house, as I’ve seen happen in the States, with people bidding things up during the day. So anyway, that’s a very important part to understand here. A lot of people come down here and think that they’re going to make money doing whatever. I mean, believe me, everything’s been tried. It’s lifestyle.

LADISLAS MAURICE: Yeah. Lifestyle and taxes.

JB: It’s all about living this way.

LADISLAS MAURICE: You make money by reducing your overall tax bill.

JB: Yeah. Yeah.

LADISLAS MAURICE: And having more freedom in the way you operate and you do things. This is how you make money here, essentially, is by playing that arbitrage.

JB: Yeah.

LADISLAS MAURICE: And this is why I was very happy to meet JB and his team, because a lot of realtors, you meet them, they’re trying to say, “Oh, it’s great lifestyle, and it’s a great investment, and you’re going to make money, and the rental yields are high.”

JB: [laughs]

LADISLAS MAURICE: As soon as I started talking to JB about investment and rental yields, he didn’t want to talk to me. He’s like, “No, no, we don’t do investment properties. You don’t come here for yield. We don’t want to do this. We don’t want to manage your property.”

JB: [laughs] Yeah.

LADISLAS MAURICE: You know, you need to understand this is lifestyle, and you come here for the taxes, the lifestyle, you need to understand this. So you weren’t trying to, like sell me nonsense.

JB: No. No, no, no. It’s all about, it’s people that are coming down that stay here they’re going to be similar to you. So they’re going to be on the same track that you’re on as far as the lifestyle end, and you make up your mind that you’re not going to become wealthy down here.

LADISLAS MAURICE: [laughs]

JB: But you’ll become wealthy in a lot of other ways.

LADISLAS MAURICE: Yeah. Or, you’ll become wealthier, again, thanks to the tax arbitrage.

JB: Yeah.

LADISLAS MAURICE: Like especially Canadians, if you do things properly, you can go from 40%, 50% taxes down to literally zero. So imagine being, for example, Canadian, and you’re working in your half million-dollar condo somewhere in Toronto, it’s freezing outside, you’re working on your laptop. The alternative is working from here. This is your view. Again, we’re a bit unlucky today for the filming, because, typically, this would be blue skies and like a Caribbean Sea.

JB: That’s right.

LADISLAS MAURICE: And instead of paying 50% taxes in Toronto, you’re paying, if you structure things properly, 0% taxes. So this is literally the type of lifestyle and tax arbitrage decisions that people can make and, honestly, should make. And this is what a place like this really, really offers.

JB: That’s correct. And you’re right on target with that, you know.

LADISLAS MAURICE: Cool. Fantastic. JB, thank you very much.

JB: Pleasure, pleasure.

LADISLAS MAURICE: So now, with JB, we’re just going to– there were dolphins down there you wanted to show us, so we’re going to go check out the dolphins.

JB: Yeah. Yeah, that’s right.

LADISLAS MAURICE: We’re going to go for lunch, eat some fish, drink some beers. And if you want to get in touch with JB, there is his email below, and there is a link with more information on his services as well.

JB: I appreciate that.

LADISLAS MAURICE: All right. Cheers.

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