What expenses can I expect to pay as a homeowner in La Paz?
How much does it cost to live in La Paz? This is one of the many questions we often get from our clients who are considering a move here from another country. The answer varies, of course, on your lifestyle, but following is an overview of what to expect in terms of monthly and annual La Paz living expenses. For prices quoted in pesos, just do a Google search for the current exchange rate to your currency.
Closing Costs on Your New Home
If you are looking to buy property here in La Paz, you will need to plan for closing costs in addition to the purchase price of the property. Closing costs range from 3-4% to over 10% of the purchase price, depending on the cost and type of property (home or undeveloped lot). Regardless of the price of the property, if you are an expat and not a Mexican citizen, you will need to pay to initiate or transfer the fideicomiso, or bank trust, to your name. There will also be some costs associated with the services of an attorney and a notary for their time and work. These fees typically add up to around $4,000 USD. Additionally, you will need to pay acquisition taxes of 2.5% of the property’s value. Lastly, you will also have some smaller expenses associated with escrow services, surveys, legal certificates and appraisal, these usually add up to less than $1,000 USD.
Annual Fees
Fideicomiso fees: A Fideicomiso is the official title document to your property. By Mexican law, properties within 50 km of any ocean front and 100 km of any border cannot be sold directly to foreigners, and are acquired via a bank trust. With a fideicomiso, you still own the property, but the title is held in a trust by the bank. As the beneficiary of the trust, you have all the rights of ownership of the property, including the right to build on and improve your property, or sell it at any time. The bank requires you to pay a fee of approximately $450 to $500 USD each year, on the anniversary date of when you closed on the property. The bank will contact you by email (the one you gave to your closing attorney) 1-2 months before this date, so be sure to set a reminder and check your spam folder if you don’t see it. You can pay the fee in person at the bank, but most banks also offer some kind of online payment option.
Property Taxes: Property taxes depend on the type of property (house or land) and the value of the property. Property taxes are very low in La Paz, typically less than $500 USD, and are due in January of each year. However, you will get a 35% discount by paying before the end of November or a 20% discount by paying in December. Late fees start accruing in February and, if left unpaid, can result in penalties that must be paid prior to selling your house. Taxes can be paid online using your Clave Catastral number (which can be found in your fideicomiso) at https://lapaz.gob.mx.
HOA Fees: If your new home in La Paz is in a gated neighborhood, you may be subject to Homeowner’s Association Fees. These vary depending on the type of property and amenities provided, and are usually paid annually based on the fiscal calendar of the association.
Monthly Utilities
Electricity: CFE is the city electric utility and bills every two months. Electricity is one of the higher utility bills you will pay here, although it will still typically be lower than what you pay in the US or Canada. A typical electric bill here runs from $50-$100 USD per month, depending on your usage. The bill must be paid no later than the 24th day of the month, or you may get disconnected. You can pay the bill at any CFE office or substation using one of the kiosks and a credit card. You can also pay online at https://www.cfe.mx/Pages/Index.aspx, but this portal only accepts Mexican credit/debit cards and American Express. If you don’t receive your bill, you can take an old bill to any kiosk and scan it to see what you currently owe. You can also pay the CFE bill at any OXXO (the local convenience store chain).
Water: Most homes in La Paz and El Centenario are serviced by SAPA, the city water utility. SAPA delivers water to the different neighborhoods throughout the city on different days. Most homes have a water cistern that is filled by city water, and you draw from that cistern for your water source. Water bills are typically very low, around $10-$15 USD a month. SAPA bills every month, and the bill must also be paid by around the 24th of the month. You can pay the bill at any SAPA office or substation, or online at https://sapa.lapaz.gob.mx/.
Can I drink the water?: While the SAPA city water is drawn from local aquifers and treated, it can still contain small amounts of heavy metals and other minerals. As such, most residents rely on either bottled water, or install a filter, such as a reverse osmosis system, for drinking water. You can order bottled water for delivery from one of the local bottled water companies here, the cost for a garafon (about 20 liters) ranges from 20-40 pesos depending on the source. It’s also a good idea to install a water softener in your home, as the local water tends to be very high in mineral content, including calcium, which can be hard on plumbing and appliances.
Internet Service: There are several options for high-speed Internet in La Paz, including:
- Telmex: this is one of the more popular options, especially in established neighborhoods where Telmex is rolling out high-speed fiber optic cable. The cost is as low as $20 USD/month and you can pay monthly, but your cost will vary based on how much bandwidth you want. Bills can be paid online at https://telmex.com/.
- Telcel: offers a 4G hot spot internet plan that is both reasonably fast and inexpensive. You will need to sign a 2-year contract and either buy or rent the hot spot modem, but the bills are also very low, around $20 USD a month. There are no installation fees or appointments and you can also take it with you if you move. Bills can be paid online at https://www.telcel.com/.
- Wireless: if neither of the above options is attractive or available to you, it is also possible to install a point-to-point wireless internet service that can deliver blazing fast speeds. The equipment cost and monthly fees are higher, but so is the bandwidth. Contact us for more details.
Propane: Most likely your hot water heater and your cooking range will be powered by propane. Most homes come with a propane tank ranging from 300-500 liters. If you have a propane pool heater your usage will be higher. Depending on the size of your tank and your usage you will need to schedule the gas truck to come and fill it every couple of months. The cost runs around $12-$14 pesos per liter to fill it, and Global Gas will send a truck usually the same day you call. You can pay with a credit card or using cash.
Other Expenses
Groceries: You will find the cost of many food items to be much lower than in the US or Canada, depending on where you shop. There are many local markets and providers who offer fresh, even organic, locally grown produce at a fraction of the cost you would normally pay. There are also local markets for meat and seafood, as well as local family owned bakeries and tiendas where you can get most of what you need. See our post here on Where to Buy Locally Produced Food. Of course, you can also shop at Walmart, Chedraui, Sam’s Club or Soriana (the local chains) for staples, and may pay more for specialty items at these stores. However, if you shop local and focus on fresh ingredients, you will be pleasantly surprised at the value you receive for your money.
Gas: Fuel for your car is one of the higher expenses here in La Paz. The gasoline market was deregulated by the government a few years ago and gas prices rose accordingly. Gas runs just under $1 per liter but can definitely vary based on the location of the gas station. All gas stations are full service in La Paz, with attendants to pump your gas for you. Make sure they zero out the pump before they begin pumping your gas, and be sure to tip your attendant for any extra services, such as cleaning your windshield.
Entertainment: Your entertainment costs will vary widely based on your hobbies and preferences, but there are plenty of free and low-cost activities here in La Paz to enjoy. You can go paddleboarding and kayaking in La Paz Bay, head to any of La Paz’s free public beaches, hike or mountain bike through the desert, or attend any of the many free cultural events held here throughout the year. If you love to dine out, you’ll find that your restaurant bill is roughly 60% of what you would pay in the US or Canada for a comparable meal. La Paz has dozens of great restaurants and roadside stands that offer low-cost breakfast and lunch options that will only run you a few dollars, as well as fine dining restaurants that, while they might cost a bit more, are still a great value.
Pool Care: Having a pool is a great way to escape the heat in summer, but it also requires regular care. A respectable pool care service will cost between $75 and $100 per month for weekly service and they should supply the chemicals.
Housecleaning: Having your house cleaned is considerably less expensive here; a typical home will cost around 400 pesos ($20 USD) per day for a few hours of cleaning if you pay cash.
Gardening: Landscape maintenance is also fairly inexpensive here. You will pay roughly $150 pesos per hour for a gardening team to maintain your landscape.
Other Costs to Consider
There may be other costs associated with moving into your new home, such as buying furniture (if your new home was sold unfurnished), installing blinds, decorating and more. These costs will vary according to your tastes and budget, but part of the fun of moving to La Paz is discovering all the local stores and places to go shopping, as well as the local artisans who can handmake furniture and décor to order. See our La Paz Area Shopping Guide for ideas. All in all, we think you will find La Paz a very affordable place to live, where you can stretch your US or Canadian dollars will go a lot further. That’s one of the many reasons so many folks are opting to retire early and make La Paz their home, it’s just an all around great place to live!
Questions? Contact us at info@bajaliferealty.com, we are happy to help!