Cost of Living in Ecuador
The general cost of living in Ecuador is very low, ranked by Mercer at 198th out of 214 cities all over the world in 2012. This is said to be one of the drawing factors for foreign nationals to live and retire in the country. However, employment opportunities for expats are quite limited, especially if they don’t have sufficient Spanish skills.
Buying Real Estate
The government of Ecuador generally allows foreigners to buy a property in the country. However, there are certain restrictions near the coastline and borders of Ecuador. Prices of property in Ecuador are considerably low, therefore attracting a lot of foreign national buyers. Expats can choose to ask for the service of a real estate agent when scouting for properties in Ecuador, but it must be noted that Ecuador does not have multiple listing service (MLS) and estate agents work independently. Also, some of the real estate agents are unlicensed, and working unlicensed does not have any legal consequences so foreign nationals must be extra cautious in choosing one.
Once a property has been chosen, a deposit must be made and the rest of the balance can be paid for up to seven years through mortgage or cash. Some of the fees incurred when buying real estate in Ecuador include real estate transfer tax of 1%, additional transfer tax of 0.5%, legal fees of as much as 3%, and notary fees of 3.75%. Fees from real estate companies and agents vary, so it is best to shop around first and find one that is not only reputable, but also offers the best prices. Furthermore, the deeds of a property must be transferred by the Registry of Properties. Foreign owners of real estate in Ecuador should make sure that all the details in the property deeds are accurate because this is how property taxes are calculated. Those who plan on paying the property through mortgage can either apply in a local Ecuadorian bank or obtain mortgage in another country. Real estate purchase process in Ecuador only takes a few weeks, and the registration process takes approximately 21 days. Since most legal documents will be in Spanish, it is wise for expats to have property titles and other documents translated in English to know the exact details of the transaction.
The prices of property in Ecuador greatly vary, and it depends mostly on the location and size of the real estate. Properties located in the capital city, Quito, and other large cities like Guayaquil have higher prices than the ones in smaller towns. Apartments in the city center ranges from $800 to $1,200 per square meter, while apartments outside the city center costs about $650 to $1,000 per square meter.
Ecuador offers a wide range of rental accommodations for locals and foreign nationals alike. Most of these accommodations include studio apartments, small houses and small apartments – furnished or unfurnished. Prices obviously vary, depending on the location of the rental accommodation, but most foreign nationals choose to rent in the capital city, Quito, and other big cities like Guayaquil. Tenancy agreements in Ecuador usually last for one year, but shorter and longer tenancy agreements are also available, depending on the tenant’s negotiation with the landlord.
A one-bedroom apartment in Ecuador’s city center generally range from $200 to $550 a month, while a three-bedroom apartment costs about $400 to $1,000 a month. Meanwhile, a one-bedroom apartment outside the city costs approximately $150 to $400 a month, and a three-bedroom apartment costs about $350 to $700 a month.
The price of basic utilities in Ecuador such as water, heating, electricity and garbage range from $25 to $50 a month. Cable or ADSL internet connections with unlimited data and speed of 6Mbps can cost about $30 to $80 a month, while one-minute local calls using prepaid mobile phones cost approximately $0.12 to $0.25.
Dining out in Ecuador at an inexpensive restaurant can cost about $2 to $4, while eating a three-course meal for two at a mid-range restaurant costs about $12 to $22. Regular cappuccino in a restaurant costs about $2, and a McDonald’s combo meal or something similar at a fast food chain costs about $5.
A 1.5 liter of bottled water in Ecuador costs approximately $1, one liter of regular milk also costs $1, one kilogram of local cheese costs $4.41, one kilogram of white rice costs $1.02, a dozen eggs cost about $1.80, and a loaf of fresh white bread costs about $1.34. Domestic beer costs about $0.97, imported beer costs $2.25, a bottle of mid-range wine costs approximately $10, and a pack of cigarettes cost about $3.22.
One liter of gasoline in Ecuador ranges from $0.39 to $0.53. A one-way ticket at a local transport costs about $0.25, while a regular monthly pass costs about $17. Taxi fares start from $1, with an additional dollar for every kilometer ride.
Taxation laws in Ecuador impose an income tax rate that is on a sliding scale. It usually starts at 5%, and employees can pay up to a top rate of 35% depending on their salary bracket. An individual is considered a resident of Ecuador if they stayed in the country for more than half of the tax year. On the other hand, non-residents are taxed only on their income gained in Ecuador.
Other forms of taxes in Ecuador include real estate tax or “impuesto sobre la propriedad” which ranges from 0.025% to 0.3% for a property situated in a rural area, and 0.025% to 0.5% on properties located in towns and cities. Inheritance taxes are also paid in Ecuador up to 35%. The rate depends on the relationship of the benefactor and beneficiary, as well as on the amount that has been bestowed. Value-added tax (VAT) on goods and services are set at 12%.
Expat Services in Ecuador
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