What is Madagascar’s Cost Of Living Index?

A map showing the island of Madagascar and the surrounding countries.

When you think of Madagascar, you probably envision an exotic paradise island on par with, or even better than, Tahiti or Fiji. Maybe your employer is sending you there to work for a while, or perhaps you’d like to move there for retirement. What does it cost to live there, though?

One of the most critical pieces of information you need before you commit to moving anywhere, inside or outside the U.S., is your new home’s cost of living index. You don’t want to discover you can’t afford to live there after you move.

Madagascar has a high rate of poverty and is, overall, an impoverished country. While their average income places them in the top 60 countries globally, it’s only $400-$520 per month before taxes.

How much are things like rent, taxes, food, childcare, and healthcare? Can you afford to retire there? Do they allow you to bring cash into the country, and do they limit that? 

We’ve answered all these questions and more below so you have a good idea of the cost of living in Madagascar.

Cost of Living In U.S. Dollars in Madagascar

Even though Madagascar is part of east Africa, it’s not absurdly cheap to live there. The average cost of living in Madagascar for a family of four is roughly $1,500 per month

We’ve broken down everything you can expect to pay so you can get a better idea of what your costs could be.

Internet and Utility Expenses

According to Numbeo.com, where you can see the costs of many necessities in Madagascar, Internet prices average about $74 per month. That includes 60 Mbps, unlimited data, and a cable/ADSL bundle. 

Basic utilities for a 900 square foot apartment, like water and garbage, electricity, gas, heating, and cooling, are roughly $46 per month. To stay on the conservative side of things, you can expect to pay a minimum of $120 per month for the Internet and utilities. 

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Cost of Transportation (Cars and Public Transit)

Numbeo uses the Volkswagen Golf and Toyota Corolla to determine the average costs of new sedans, which are $26,000 and $40,000, respectively. Gas is $4.15 per gallon, which is far more expensive than the U.S. right now. 

A one-way ticket on local public transit is $0.13, and a monthly pass will cost you $5.95. You’ll spend approximately $2.10 per mile for a cab. 

Cost of Food and Groceries

A gallon of milk, a pound of bread, and a dozen eggs cost about $5.20 together. A pound of white rice costs just $0.25. One pound of beef round costs roughly $1.80, and the same amount in chicken fillets is approximately $2.00. 

Produce including a pound each of apples, oranges, bananas, potatoes, tomatoes, and onions, cost about $2.15 together. 

How Much Is a Coke in Madagascar?

In many countries, the name “Coke” stands for any soda, but in others, it doesn’t. Nevertheless, in Madagascar, the cost of a 12-ounce bottle of Coke or Pepsi is about $0.61. 

Dining Out

Madagascar has many of the same restaurant chains as the U.S. You can generally expect to pay about $5.00 per person for a McMeal at McDonald’s in Madagascar.

A full meal at an inexpensive restaurant is about $1.50 per person, while a three-course meal at a mid-range restaurant runs around $15.50 per person.

Clothing Costs

There are all types of clothing, but you can get a general idea of clothing costs from some of the most popular clothing types out there.

A pair of jeans similar to Levi’s 501s will cost about $57, while a women’s sundress from a chain store such as H&M can run approximately $21. 

Tennis shoes are expensive, particularly if they’re a big-name brand like Nike. You’ll pay upwards of $130 for those, but a pair of men’s dress shoes will cost just $52.

Childcare Costs in Madagascar

Childcare in Madagascar is mostly schooling, and if you want to send your child to a private preschool, you can expect to pay about $550 or so per month per child.

Annual costs for international primary school are over $4,000. All of this is per child, so keep that in mind if you have kids you’ll send to school in Madagascar.

Average Rent In Madagascar

Just like anywhere, what you pay in rent depends on several factors. If you’re renting an apartment in Madagascar, you’ll pay the following average costs:

  • One-bedroom in a city center: $250 or so per month
  • One-bedroom outside of a city center, $90 or so per month
  • Three-bedroom in a city center: $860 or so per month
  • Three-bedroom outside a city center: $615 or so per month

Cost of Leisure and Entertainment

Ah, entertainment. Who wants to live somewhere without partaking in it? A fitness club membership can run between $25 and $75 per month, depending on the club and what you sign up for. 

International release films in Madagascar cost about $6 per seat. 

Related: Fishing in Seychelles

Healthcare Costs

Madagascar’s healthcare system is a mix of public and private hospitals and clinics. If you’re not a permanent resident or immigrant, Expatfinancials.com recommends that you use private healthcare whenever possible and invest in an international health insurance plan to cover the costs. 

Sample Monthly Budget for Living in Madagascar

Unless you’re an American expat earning an American-sized salary, you’ll find that your money doesn’t go very far. Madagascar’s average income after taxes is between just $200 and $220, and private schooling alone for only one child can eat all of that up. 

Madagascar does have public schooling. However, you have to pay registration fees and possibly others each year. We use a very rough estimate for the monthly cost of public education for this sample budget.

Starting Amount: $300
Childcare (Public School Only)$3
Dining Out/Leisure$10
Total Expenses$295.95
Amount Left Over$21.05

Real Estate Prices in Madagascar

If you want to buy an apartment, you’ll pay roughly $90 to $150 per square foot inside a city center and about $50 to $100 per square foot outside of a city center. Mortgages are expensive in Madagascar, with an average interest rate above 18 percent. Compare that to the average worldwide interest rate, 5.5 percent, and you can see how owning property in Madagascar gets expensive.

Madagascar doesn’t publish price statistics on houses, but the general price per square meter is roughly $520. Despite that, the Global Property Guide says that a newly-built, 70 square meter house can run just under $30,000. 

Related: Cost of Living in Liberia

Taxes in Madagascar

Like every country, Madagascar functions because it collects various taxes. Some of these taxes come directly out of your income while you pay others separately, depending on your particular situation. 

Income Tax

Madagascar defines personal income tax as a tax on labor, dividends, interest, and pensions. If you make less than $88.47 per month in Madagascar, your individual tax rate is a flat $.50. If you earn more than $88.47, you pay a 20 percent personal income tax rate.

Retirement Tax

Employers must also pay up to 13 percent of eight times the minimum employee salary to the National Pensions Fund. If you’re an employee, you pay a minimum of one percent of your taxable income and a maximum amount of one percent of eight times your taxable income per month. 

Value-Added Tax (VAT)

The country has a 20 percent VAT on the supply of goods and services, trade, construction, service delivery, and commercial, industrial, and agricultural work, among other things. However, businesses with a turnover of less than $50,560 don’t have to register for it, although they can choose to if they wish.

The standard VAT of 20 percent applies to all goods and services in the country. Exports, education fees, certain investment operations, interest from receivables, credit, deposits, and loans given to members of microfinance companies are exempt from Madagascar’s VAT.

Consumers also pay a standard 20 percent tax at the point of sale (sales tax) on most goods and services. 

Real Estate and Property Tax

You’ll generally pay anywhere from five to 10 percent annually on any real estate that you own. Madagascar charges a separate tax for land, which depends on how much land you have and how you use it. For non-agricultural land, the annual tax rate is one percent of its market value. 

If you have agricultural land, then what you pay depends on what you grow and how much land you have.

Inheritance Taxes in Madagascar

Fortunately, Madagascar does not impose taxes on inheritances. You also pay no estate or gift taxes there. If you’re moving there, or you’ll inherit something after moving there, you won’t have to worry about its taxes.

An image of a city in Madagascar from an elevated view.

Average Income in Madagascar

Madagascar isn’t the most expensive place in the world, and indeed, there’s a lot about it that’s much cheaper than the rest of the world when you convert to U.S. dollars. 

Consider that when you look at the average monthly income in Madagascar, though. The average monthly income is $440, and roughly $210 after taxes. 

Immigration Costs

If you want to immigrate to Madagascar, you’ll go through the complicated process of applying for a permanent resident visa. You first have to get a one-month convertible visa, and then apply for the appropriate residential visa. 

Madagascar and the U.S. charge fees for the immigration process. If you choose to work with someone who can handle the work on your behalf, you’ll probably pay more than $700 just in visa and document fees.

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Can I Use U.S. Dollars In Madagascar?

You can’t use U.S. dollars directly. Madagascar has its domestic currency, which is the Malagasy Ariary, and they also accept the Euro. 

However, you can easily exchange your U.S. dollars for either Ariary or Euros. You’ll find forex bureaus and bank kiosks at most banks in major towns and cities. Also, most towns have ATMs scattered throughout, although they only dispense Ariary. 

The easiest method for changing your money is at the airport when you arrive, although if you’re planning to stay, you can do so later at a bank or a kiosk. 

How Much Cash Can I Bring Into Madagascar?

Most countries limit how much currency you can bring in before you have to declare it and pay a tax on it. If you fail to do so, some countries will seize it all, so it’s essential to know precisely what you can bring with you. 

Madagascar allows you to bring an unlimited amount of foreign currency into the country. However, you need to declare any amount over $8,875. 

If you’re unsure whether to declare anything when entering Madagascar, your best bet is to declare it. The worst that will happen is they’ll tell you that you didn’t need to.

How Much Do I Need to Live Comfortably In Madagascar?

Since the average cost of living in Madagascar is around $1,500 per month for a family of four, you should be sure you have at least $3,000 per month to ensure a comfortable lifestyle. 

How Much Do I Need to Retire In Madagascar?

It isn’t easy to calculate precisely how much you need to retire to this island nation. You have the immigration costs to pay, plus you need to have an idea of how long you plan to be retired and understand the cost of living in Madagascar.

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Final Thoughts

Whether you’re planning to retire, start or invest in a business, or your employer is sending you, Madagascar is a good place to live once you understand its cost of living. Since Madagascar is a poor nation, you need to balance your income with prices and taxes because you could easily end up spending more than you earn. 

You also need to factor immigration costs into your plans because they aren’t free. Neither is bringing in large sums of money. But now that you have a grasp of this, you have a better idea of whether moving to Madagascar is worth it.

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