Snowbirding

A snowbird is a term used for retired Canadians who find it attractive financially to head south every winter season to escape winter and enjoy cheaper living costs in Florida, Texas, Arizona, or Mexico. While living expenses are growing in every location, certain items like clothing and liquor are substantially cheaper. The main extra expense is health coverage. Canadian medicare remains in force as long as you are out of the home province less than 6 months. So most coverage builds in an assumption that you will be returned home in the event of a serious condition. Considerations here are that if you drive, you may find that you are back in Canada while your car remains south.
There are capital gains considerations in owning property and these are dependent on the specific location. But they are not zero as they might be in Canada. These can be deferred through appropriate legal mechanisms implemented ahead of time.
==United States==
Many Canadians choose to purchase their place in the sun. This raises several complications. In the US, resident aliens are subject to estate taxes. If you own rental property in the United States or spend extended periods of time there, you could be subject to various U.S. filing requirements, even though you may have no U.S. tax to pay.BDO Canada Tax Bulletin, U.S. Tax Issues for Canadians, March 2020, viewed March 20, 2021. If you spend nearly 6 months a year in the US, the odds are about 50% that you might die while there, so it is important to take the necessary legal steps to assure that your property remains in your estate for use by your spouse or for the benefit of your heirs. A White Paper that lays out some of the complexities is available here.
Nothing is insurmountable, but some planning can save heartache later.
===US substantial presence test===
Snowbirding Canadians should be aware that the US Internal Revenue Service (IRS) applies a test known as the “substantial presence test”US Internal Revenue Service (IRS), Substantial Presence Test, viewed March 20, 2021. to determine whether an individual who spends part of the year in the U.S. is a resident of the U.S. for U.S. income tax purposes. If you are above the level of the substantial presence test, you are considered a resident alien. It is possible to considered a nonresident alien through the mechanisms by claiming a "closer connection to a foreign country"US Internal Revenue Service (IRS), Conditions for a Closer Connection to a Foreign Country, viewed November 4, 2013.. You must file IRS Form 8840 to claim this exemption.
If you meet the substantial presence test in any given year, you’re automatically considered a U.S. resident for U.S. tax purposes for that year and are, therefore, subject to U.S. tax and filing requirements. This will be so, even though you may also be a Canadian resident and pay Canadian taxes.
==Mexico==
In Mexico, properties within 30 km of the ocean or 50km from the border cannot be owned outright. They are maintained in a banking trust for your exclusive use. They can be resold without obstacle. And the trust can handle succession issues automatically.
=== Life in Puerto Vallarta, Mexico ===
Puerto Vallarta (PV), Mexico is an attractive winter location. Facilities such as high speed wireless internet, Magicjack VOIP, and Canadian Satellite TV make life easier. A Canadian car can be used. 
Costs are about 40% cheaper than Vancouver. Weather is delightfully boring. UPS can be used for forwarding snail mail currently and a mail scanning service may also be available. 
An international health policy based in Mexico can be purchased. It has deductibles, copayments and limits much like US health insurance. 3 months hospitalization outside the country is covered every 12 months (and longer at a reduced rate). There are no added restrictions on coverage. 
A doctor's visit is 300 pesos. A hospital overnight stay is about 5000 pesos with IV and tests. Drug prices are comparable to Canada (25% cheaper than US). Coverage is about $1k/mo each for a couple, 50% higher after age 65. Hospital facilities are good and advanced equipment is plentiful. An MRI or CT Scan can be obtained the same day with results sent by email. 
Phone and high speed wireless internet is 389p/mo. Property taxes are 14p/thousand each year. Electricity costs can run at 1000p/mo. Water is 200p/mo. Car insurance is 4000p/year. Satellite TV is C$63/mo (Shaw Direct) and covers both a PV home and a Canadian home (Vancouver) with 6 receivers. MagicJack is US$20/year.
Fine dining out can cost from 200p each to 800p with wine and tips depending on the specific restaurant (beachfront, view, gourmet). Eating in a local Mexican restaurant with a beer would run about 80p. 
Exchange rates have been 14.5p/USD and 11.3/C$ most of the 2009 season.
==Traveling with animals==
Regular snowbirds often bring along their household pets. If they drive to their snowbird location, there are resources available online that indicate pet-friendly hotels along the way. Some planning is necessary to ensure that Fido does not have to sleep in the car.
When flying many airlines have restrictions on transporting pets. Air Canada does not allow any pets in cabin. Alaska Airlines allows 6 in-cabin pets per flight. They must be reserved in advance and cost $100. Westjet allows 4 in-cabin pets per flight and charges $50 each. There is also an added $15 charge per traveler if you want an assigned seat such as an aisle seat to get extra legroom. The pet must be stored under the seat in front and there are size limitations.
==Exporting a car==
Most cars can be used while going south for up to 6 months. Insurance coverage extends to use in the US. However when entering Mexico, extra insurance must be purchased. It can be acquired online, or purchased at the border. In Mexico, local liability coverage is essential because you and your car will be held in the event of an accident regardless of fault until an insurance company lawyer shows up on the scene and liberates you. Your car is imported under your tourist visa (FMT) and must leave the country when you do. 
If you decide to stay longer than 6 months, you must apply for an FM3 visa and your car can remain in the country under that visa indefinitely. While insurance must still be maintained, no vehicle registration (current license plates) is required.
Vehicles can be naturalized so that they can be sold and carry local plates. However, only used vehicles that are exactly ten years old can be naturalized. This mean that most FM3 holders simply drive their cars back north and sell them there. This means that they need temporary registration that is valid in their originating location.
Because border towns along the US border are trading zones, you will not be stopped at the Mexican border. So you must stop and get your FMT at the border. Then, 21 km further south is the "real" border and it is here that you must pay to import your car. You get a sticker for the windshield demonstrating legal importation.
Repairs to cars are considerably cheaper in Mexico. A brake job is 650 pesos. Repairing a tail light assembly and patching/repainting body work is 2000 pesos. Replacing the condenser and recharging the AC is 2000 pesos.
==See also==
* Cross-border and expatriate issues
==References==
==Further reading==
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Category:Retirement living