If you are from some other part of the world and are considering living in Costa Rica, one of the most important factors which will determine your cost of living here is your lifestyle. If you plan to continue an affluent style of living, you will spend more than someone who adjusts to the Costa Rican lifestyle. Either way, you can still live better here than in most other countries.
Although Costa Rica is the most expensive country in Central America, it enjoys one of the highest standards of living all of Latin America.
Homes in middle-class areas are generally less expensive than they are in the US or Europe, although this may be changing with the collapse of housing bubbles especially in the U.S. For example, a small condo in a suburb of San Jose can cost as little as $80,000 while the same condo at the beach can be priced much higher. You could purchase a modest “Tico” style home for around $50,000 or you could spend hundreds of thousands or even millions on a larger beachfront property or country estate. You can also build a good quality home for a cost of about $50 to 100 per sq.ft. depending on the quality of finishings you use. Property and other taxes are fairly low in Costa Rica, except for a sales tax on many items of 13%. In October, 2008 the Legislature passed a new law imposing a tax on “Luxury Homes.” These are defined as houses with a construction cost of $220,000 and up. The tax is .25% payable at the time of purchase. This tax is tied to projects to eliminate slums and provide affordable housing to the poorest sector of the population.
Domestic help such as a maid or gardener costs $330 to $400 per month. Telephone/cell phone service, electricity, and water are also less expensive than in North America or Europe. A monthly electric bill would average about $75. Cell phone service that includes 60 minutes is about $8 per month and a land line is even cheaper at $6/month. Depending on where you live, water is free or costs as little as $8 a month. Cable or satellite television companies charge an average of $50 per month. High speed Internet service averages about $50/month. Because of Costa Rica’s temperate climate, there is no need to heat or air condition your home in most areas. This alone will save hundreds of dollars each month. You also have your choice for cooking and heating water with gas or electricity.
Some people that move here find that they do not need to purchase a vehicle because public transportation is most everywhere and reasonable. For about 50¢ U.S. you can take a bus ride to the mall or to the grocery store. You could easily travel by bus to the farthest part of the country and spend around $10. Taxi service is also reasonable and readily available. If you decide that you must have a car, it is important to keep in mind that cars are very expensive due to high import taxes.
Furniture is one of the great values to be found here. The furniture making capital of the country is in Sarchi and you can have anything you desire built at very affordable prices. You can also purchase pre-made furniture from the scores of furniture stores. Fresh fruits and vegetables as well as meats and fish can be purchased at the local farmer’s markets (ferias) or in larger towns, the central market. Prices at the ferias and central markets are much lower than at the modern supermarkets.
Health care here ranks among the best in the world and at a much lower cost than in other countries. The Social Security system provides universal family coverage of high quality. People come from all over the world to take advantage of private health care services, especially dentistry and plastic surgery. Many medications available only by prescription in the US can be purchased directly over the counter here and at a significantly reduced price for generics. Pharmacists are permitted to dispense medications, give injections, diagnose and treat illnesses all without a prescription or visiting a physician. Only narcotics and addictive drugs require a prescription.
Property taxes are a BARGAIN in Costa Rica. On a $150,000 property in most locations, you could pay less than $300 per year. And when you sell your property, there is no capital gains tax. The no capital gains tax also applies to the turnover of investment properties.
One of the best ways for people with some resources to enjoy life in Costa Rica is to pay cash for all your major purchases like your home, car, furniture and appliances. Ship here only your personal belongings. Without any debt and keeping your lifestyle in mind, a couple can live comfortably with a monthly income of $2000-$2500 and a more luxurious lifestyle can be realized with an income over $3000 per month. Considering that middle-class Costa Ricans earn between $1000 and $2000 per month, paying mortgages and car payments, and those earning more than $2000 per month are considered to be affluent, you can see how well you can live here for less.
The cost of living for foreigners who move here and depend on income from abroad has been increasing over the last decade. This is due to the Central Bank control of the exchange rate, as well as the weakness of the U.S. dollar. While the rate of domestic inflation has varied in recent years between 11 and 14%, the Central Bank has fixed devaluation of the Costa Rica colon at only 7 to 9%. Thus those who have dollars get relatively fewer colones in exchange and pay more for goods and services purchased here. This is compounded in the current international crisis as many people dreaming of moving from the U.S. or Europe to Costa Rica face a situation of declining asset value and reduced investment or retirement income.
If you are looking for bargain-basement living, then Costa Rica may not be for you. You can find cheaper real estate and a lower cost of living in other countries such as Nicaragua, Honduras, Guatemala, Belize and Mexico. However, there will be trade offs in safety and violence, unstable political situations, lack of infrastructure, unstable currencies and a lower quality of life. Costa Rica is la pura vida.