ARUBA AT A GLANCE
- CLIMATE
Median: 82°F
- Currency
Aruban florin (AWG)
- LANGUAGE
Dutch, Papiamento, English
- AIRPORT
AUA
LIVING IN ARUBA
People often ask us why we chose Aruba for our retirement home. The truth is, Aruba was the one place we found that had it all. I enjoy the early mornings, my husband likes the late nights. I like the beaches and sun, my husband prefers to do things more interactive. We looked at many places, and no matter where we looked there was something missing.
Beyond that, amazing weather, a safe environment, and wonderful local culture sealed the deal! You see, Aruba is outside the hurricane belt and is gorgeous year-round with a median temperature of 82F. Unlike many island destinations, it’s safe to leave the tourist areas and enjoy the local neighborhoods. Getting to know the local people and culture is what really clinched it for us. It is a great melting pot of Papiamento, Caribbean, European, and American influences. This truly makes Aruba unique.
ENTRY & PERMITS
Non-residency
To enter Aruba as a non-resident a current passport is required. A visa isn’t required for American, Canadian, or EU citizens.
The maximum period a tourist can stay in Aruba is 30 consecutive days. Property owners can stay in Aruba for 180 days per year without a permit.
Non-residents from the United States and Canada can receive an extension to stay in Aruba for up to 180 days per calendar year. If you extend you stay beyond 30 days, you are required to have travel insurance (medical and liability) that’s valid for the duration of your stay.
DIMAS (Directorate of Alien Integration, Policy and Admission) can extend your stay beyond the 30 day tourist limit. To apply, you can download an extension form on www.dimasaruba.aw. There is no filing fee, but it must be submitted in-person at the Dimas office. With your documentation, you must include a valid copy of your return ticket and proof of travel insurance. If you do not own property in Aruba, you must present a declaration of guarantee from a resident of Aruba.
Because these rules can change and become quite complex, its highly recommend to contact DIMAS directly about your unique situation:
DIMAS
Paardenbaaistraat # 11
Oranjestad, Aruba
Tel: +(297) 522 1500
Fax: +(297) 522 1505
E-mail: dimas@aruba.gov.aw
Website: www.dimasaruba.com
BUYING REAL ESTATE
Special permission is not required for non-residents to purchase property in Aruba. In fact, the process is the same for both residents and non-residents. Non-residents can stay on the island with a tourist visa for 180 days per year.
A unique factor in Aruba real estate is the distinction between the type of land the home is built upon. There are two types:
Type 1: Freehold property land
Land is owned outright by the owner of the deed.
Type 2: Leased land
Leased land belongs to the government. In this case, the government assigns a 60-year lease to the title holder. As the owner of a home on leased land, you have the right to act as a full owner of the land. This means you may sell, mortgage, or negotiate rights (just as you can for Freehold property land.)
However, as title holder, you pay a yearly fee for the lease rights. This annual fee remains the same for the 60-year term. After 60 years, the lease is automatically extended. But after this 60-year term, the fee can increase.
Many homes in popular areas of Aruba are constructed on leased land.
Closing costs & taxes
The buyer pays closing costs, comprised of transfer tax and notary fees as outlined below:
- Transfer tax
6% if selling price is above ~$140,600. 3% if below value. - Notary fees
Typically, 2% of selling price. (1% for transfer deed and 1% for mortgage deed). A notary, appointed by the Dutch Monarchy and approved by the Aruban government, is required by law. A notary closing can take two to three months. - Taxes
The first $34,000 is tax-free, and thereafter tax rate is .4%. More information here.
Mortgages
Mortgages from local banks are available to both residents and non-residents. Typically, the bank charges 1% of the loan amount at closing. For non-residents seeking financing, generally a deposit between 40% – 50% is required. Non-residents who acquire a mortgage from a local bank are also required to get insurance locally.
INSURANCE
Personal / Property Insurance
Non-residents applying for a local mortgage must also obtain insurance locally to purchase or build a home. There are various types of coverage available in Aruba, but life insurance and fire insurance are mandatory in this case. If a couple obtains a mortgage based on a dual income, both partners must take out life insurance policies. Here’s a list of local insurance companies.
Travel insurance
Non-residents extending their stay in Aruba beyond 30 days must show proof of valid travel insurance (medical and liability) that lasts the full duration of their stay.
TAXES
While real estate taxes in Aruba are low, foreign residents are subject to taxes based on their worldwide income at a rate considered high by many expats. But keep in mind, non-residents can purchase real estate and stay in Aruba based on these parameters.
Real estate taxes
- Annual property tax: .4%
- Land tax: US $.08 per sq. ft.
- Rental properties: Net rental income is taxed at the same progressive rate system used for income tax. (See below)
Income tax
Residents are taxed on their worldwide income, with rates ranging from 14% to 52% based on taxable income. Here are the rates for 2020 (in USD).
- Below $19,406: 14%
- $19,406 – $36,614: 25%
- $36,614 to $81,921: 42%
- Over $81,921: 52%
Tax is calculated according to the above rates after the deduction of the tax-free amount, which is $16,034 for 2020.
Inheritance tax
For the spouse and children a 2% to 6% tax applies. If you’re a non-resident and you inherit Aruba property, an 8% transfer tax applies.
Capital gains
Taxed at the same rate as income tax.
CLIMATE
Of the roughly 700 islands in the Caribbean, Aruba may just have the most ideal climate. Aruba is an Arid desert climate, but not extreme, with a median temperature of 82 degrees Fahrenheit (28 degrees Celsius).
Rainfall averages about eighteen inches a year, with October, November, December and January accounting for most of it. Rain tends to be erratic and come in short-lived showers. It is important to mention that Aruba lies south of the general hurricane paths and usually only experiences fringe effects of nearby tropical weather.
So, if perfect, sunny weather is what you’re after, you cannot get better than Aruba.
MEDICAL CARE
In case of illness or medical emergency, Aruba is well equipped with great medical facilities. In a rare circumstance where the island’s medical services cannot cover an emergency, patients can be airlifted quickly to nearby facilities, such as Curacao.
The Dr. Horacio Oduber Hospital, located across from Punta Brabo Beach, is a reputable general hospital with modern equipment and a stellar medical team.
CURRENCY
Aruba’s currency is the florin. It’s denoted by letters ‘AWG’, but it’s known commonly as ‘AFL.’ US dollars are widely accepted, and nearly all places accept major credit cards.
The florin is pegged to the United States dollar at the rate of 1.79 florin per USD. US dollars are frequently accepted as payment at the rate of 1.75 florin per USD.