How to Retire in Honduras: Costs, Visas and More

Honduras is known for it’s beautiful beaches and low cost of living. The country is home to one of the largest cities in Central America, Tegucigalpa, and plenty of quaint mountain towns and a popular island called Roatan. In recent years, Americans have flocked to this Central American oasis of some 10 million people because their retirement savings can go much farther than in the U.S. A financial advisor can help you plan your retirement abroad and help you stretch your Social Security and other retirement funds while in Honduras.

Cost of Living and Housing in Honduras

According to Numbeo, a cost-of-living database, the cost of living in Honduras is about 41% lower, overall, than in the U.S., not counting housing costs. Rent in Honduras is about 73% lower than in the U.S.

Let’s look at a specific example. One of the most popular places to retire in Honduras is Roatan. Rent on a one-bedroom apartment in Roatan’s center will cost an average of $250 per month, and a three-bedroom apartment in the same area will cost about $967 per month. In contrast, an apartment in New York City will run about $3,452 for a one-bedroom and about $6,767 for a one-bedroom in downtown Manhattan.

If you want to purchase property in Honduras, the average price per square foot is about $93.79. In the U.S., the average cost per square foot to purchase a home or apartment is $292.35.

Retire in Honduras – Visas

Americans do not need visas to visit Honduras as tourists. However, if you want to retire in Honduras, you will need to get a retirement residency card, of which there are three types. The Secretary of Justice processes these in Tegucigalpa. You will need to work with a Honduran attorney to get your residency card.

It takes up to nine months to process an application for a retirement residency card, but Americans may enter Honduras on a tourist visa and begin their application process in country. Be prepared to spend about $2,500 to complete this process.

Be sure to bring your passport, police record, a health certificate, a passport photo and any residence-related documents with you when you enter Honduras as your residency application will require them. You must also be able to prove that you have at least $1,500 of lifetime monthly income if you are applying for the retirement visa.

Retire in Honduras – Healthcare

Honduras does not have a robust public health system. The World Health Organization ranks it 131st out of 191 countries. Therefore, many retirees choose to get private healthcare insurance and live near private hospitals. People can purchase healthcare insurance in Honduras or before leaving home. There are several 24-hour hospitals in Tegucigalpa and San Pedro Sula, all popular with American expats.

Most pharmacies will offer the same prescriptions as in the U.S., especially in a tourism hotspots. It is important to note that rural healthcare is scarce in Honduras.

Retire in Honduras – Taxes

If you earn an income in Honduras, it will be taxed between 10% and 20%. If you purchase a home in Honduras and then sell it, your real estate capital gains will be taxed at 10%. Additionally, your property will be taxed each year at about 0.4% of the total property value.

Money received from the U.S., like a pension, tax-advantaged account or Social Security retirement benefits, will not be taxed as income by Honduras.

Don’t forget that as an American citizen the U.S. government will tax you on foreign-earned income.

Retire in Honduras – Safety

According to the U.S. Department of State, violent crime, such as homicide and armed robbery, is common in Honduras. Additionally, gang activity, street crime and narcotics and human trafficking are pretty widespread. In large cities such as Tegucigalpa, violent crime exists and riots or protests are expected. However, there are plenty of gated communities and large pockets of expats living in Honduras that employ security staff to maintain a safe living environment.

The Takeaway

Honduras is a beautiful tropical location to visit or live in. It is home to mountains, beaches and more, so there is a bit of something for everyone living in Honduras. It is important to remember personal safety in Honduras and not take unnecessary risks when traveling throughout the country, mainly because private hospitals are only available in cities and tourist hotspots.

Tips on Retiring

• Consider talking with a financial advisor before moving abroad. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free advisor matching tool can connect you to several financial advisors in your area. You can find the perfect financial advisor for you in as little as five minutes. If you’re ready, get started now.
• Retiring comfortably in Honduras is entirely possible, even on Social Security retirement benefits. For some people, Social Security is even enough to provide disposable income for recreational purposes. Calculate your Social Security retirement benefit here.

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