Uruguay has become a popular retirement destination amongst American retirees in recent years, and it’s easy to see why. It is a vibrant country with low tax rates, a mild climate, stunning beaches, excellent infrastructure, and a stable economy.
It is also has a much lower cost of living than the United States. This allows retirees to stretch out their retirement savings and enjoy a comfortable lifestyle. Everyday consumer items, rent, and transportation costs are all cheaper than they are in the U.S. which gives retirees much more spending power.
If you are interested in retiring in Uruguay but are unsure how much income or retirement savings you will need, you have reached the right place. In this guide, I am going to explain how much it costs to live in Uruguay, how much everyday items cost, and how much money you will need to retire in Uruguay.
Key Takeaways
- Uruguay is one of South America’s most successful nations, with a high level of economic prosperity, a growing middle class, low crime rates, and very little poverty.
- It has become a popular destination with retirees because of its prosperity, mild climate, beautiful natural environment, friendly locals, affordability, and generous taxation arrangements.
- Although it is not as cheap as some other South American destinations, it still offers excellent value for money compared to the United States or European Union countries.
- The prices for consumer items are about 44% lower in Uruguay than in the United States (including rent)
- Uruguay is the 81st most affordable nation our of 138 nations on the cost of living index. It is the 4th most expensive country in Latin America (4 out of 16)
- Expat retirees living in Uruguay do not pay tax on most sources of foreign income, including social security payments, retirement pensions, capital gains, and rental properties
Why Retire In Uruguay?
Uruguay is a tropical paradise located in the southeastern region of South America, between Brazil and Argentina. With a population of just over 3.47 million people, it has a relatively low population density compared to the United States.
Uruguay is renowned for its stunning natural beauty, exciting culture, and friendly people. However, it’s also one of the most economically successful countries in the region, with a high standard of living and very little poverty. Here are a few reasons why retirees are moving to this beautiful part of the world:
- The people are amazing
Uruguayans are friendly, polite, well-educated, and welcoming of retirees. They are hard working and reliable people who conduct themselves professionally. - Climate
Uruguay has a mild climate with comfortable temperatures all year round. It never gets very cold and it never snows. The perfect destination for retirees looking for somewhere warm to retire. - The natural beauty
The beauty of Uruguay must be seen to be believed. There are thousands of hectares of verdant rainforests on one side of the country and pristine beaches on the other. You can spend years exploring the many rainforest trails, waterfalls, fishing hotspots, coves, and beaches. - Affordability
The cost of living in Uruguay is much lower than the United States (as you will see in a moment). - Plenty of activities to enjoy
Uruguay has a diverse culture with Latin American and European influences. You can enjoy wonderful music, plays, poetry, and films from talented artists. There are also many excellent tourist attractions, historical sites, restaurants, cafes, sporting clubs, and bars to enjoy. - Growing economy
Uruguay is an economic success largely thanks to its diversified export markets, with customers including China and the EU. The domestic economy has a low unemployment rate, high wages, and strong growth in several sectors. - An egalitarian nation with a strong middle class
One of the main reasons Uruguay why stands apart from other Latin America nations is that it has an egalitarian society with a high income per capita. It does not have the inequality and poverty which plague other South American nations. As a result, the people are healthier and happier — which makes it a wonderful place to live.
Where Does Uruguay Rank In The Cost-Of-Living Index?
The easiest way to obtain an overview of the cost of living in Uruguay is to use the Cost Of Living Index. This index calculates how affordable it is to live in different countries, based on the cost of everyday consumer items.
Currently, Uruguay is the 81st most affordable nation out of 138 countries on the list, with a cost of living index of 51.09. In other words, Uruguay is cheaper than 57 countries and more expensive than 80 countries on the index.
Living in Uruguay is slightly cheaper than Yemen, Zimbabwe, Jordan, Jamaica, Panama, Belize, and Latvia. It is slightly more expensive than Costa Rica, Saudi Arabia, Kuwait, Thailand, Chile, Slovakia, Czech Republic, and Fiji.
The United States is the 112th most affordable nation on the list of 138 countries, with a cost of living index of 71.92. This is 31 positions higher on the list. Here are a few other comparisons which can be useful:
- The prices for consumer items (not including rent) is 30.70% lower in Uruguay than in the United States
- The prices for consumer items (including rent) is 43.56% lower in Uruguay than in the United States
- Rent is about 68.33% lower in Uruguay than in the United States
- Restaurant prices are about 33.08% lower in Uruguay than in the United States
- Groceries are about 43.25% cheaper in Uruguay compared to the United States
Food & Dining In Uruguay
The food in Uruguay is delicious. It is an interesting mix of culinary traditions from Spain, Italy, Portugal, Scotland, France, Germany, and other parts of Latin America. This melting pot of influences is a result of centuries of immigration and colonization.
The diversity of influences means dining out is an exciting experience. The most popular foods include barbecue asado, pizza, churros, guisos or estofados (stews), dried fish, hungaras, choripan, fainás, and figazza.
You’ll be happy to discover that enjoying this food at a local restaurant is much cheaper than eating out in the U.S. Even if you are on a tight budget, you should be able to eat out regularly at restaurants and street stalls.
If you prefer to cook, you’ll find that the cost of fresh fruit, vegetables, meat, and seafood is also remarkably affordable. The fertile soil in Uruguay makes it a major food bowl, so the quality of local produce is always excellent.
Cost of restaurants in Uruguay
A basic meal at an inexpensive restaurant $450.00 UYU ($10.00 USD)
A three-course meal mid-range restaurant for two people $1,700.00 UYU ($38.00 USD)
McDonald’s Combo Meal $350.00 UYU ($7.80 USD)
Cost of groceries in Uruguay
Milk (regular, 1 liter) $33.70 UYU ($0.76 USD)
A loaf of White Bread (500g) $77.80 UYU ($1.75 USD)
Rice (white, 1kg) $46.50 UYU ($1.05 USD)
Eggs (dozen) $100.00 UYU ($2.25 USD)
Cheese (1kg) $339.00 UYU ($7.60 USD)
Chicken Breast Fillets (1kg) $296.40 UYU ($6.60 USD)
Beef Round (1kg) $353.00 UYU ($7.90 USD)
Tomato (1kg) $82.50 UYU ($1.85 USD)
Potato (1kg) $60.00 UYU ($1.35 USD)
Water (1.5-liter bottle) $50.00 UYU ($1.10 USD)
Bottle of Wine (Affordable, mid-range) $250.00 UYU ($5.60 USD)
Domestic Beer (0.5-liter bottle) $68.00 UYU ($1.50 USD)
Imported Beer (0.33-liter bottle) $82.10 UYU ($1.85 USD)
Cigarettes 20 Pack (Marlboro, or other popular brands) $165.00 UYU ($3.70 USD)
Coke/Pepsi (0.33 liter bottle) $67.30 UYU ($1.50 USD)
Transportation Costs In Uruguay
Uruguay has an excellent transportation system compared to most other countries in Latin America. They have multiple international airports, a large road network, and a major port. The geography of Uruguay means that a train network was not economically feasible, so they use an extensive bus network instead.
Most of the roads around Uruguay are paved, however, you will encounter dirt roads in rural locations. Most retires moving to Uruguay purchase a new or second hand car to travel around the country more easily.
The Cost Of Purchasing a Vehicle In Uruguay
Unfortunately,new cars are more expensive in Uruguay than they are in the United States or UK. This is largely due to the fact that the Uruguay economy is smaller and has a weaker currency.
You can expect to pay about $30,000 USD for a brand new Volkswagen Golf in Uruguay. The same vehicle could be purchased in the United States for around $23,000 USD. A Toyota Corolla sedan costs about $31,000 USD in Uruguay.
If you are on a tight budget, a second hand vehicle may be a better option. To give you an idea of cost, a 2013 Volkswagen Golf would cost around $8,000 USD, a 2013 Hyundai Access is around $11,000 USD, and a 2015 Peugeot RCZ for $15,000 USD.
Fuel is much more expensive in Uruguay than it is in the United States, at about $1.25 USD per liter ($4.70 USD per gallon). However, because it is a smaller country than the United States, you probably won’t be using as much gas to get around.
Cost Of Getting Around Uruguay Using Public Transport
- One-way Ticket (Local bus) $40.00 UYU ($0.90 USD)
- Monthly Pass (Local bus) $1,700.00 UYU ($38.00 USD)
- Taxi Start (Normal Tariff) $48.00 UYU ($1.10 USD)
- Taxi 1km (Normal Tariff) $44.00 UYU ($1.00 USD)
Cost Of Housing & Utilities in Uruguay
Housing costs are relatively low in Uruguay compared to the United States or the UK. Retirees can afford to rent a 3 or 4 bedroom house in Uruguay for the cost of renting a small apartment in a major American city.
Most of the homes in Uruguay are modern, well maintained, and comfortable to live in. There are many spectacular luxury properties dotted along the coast or surrounded by rainforests, but they often come with a larger price tag.
Apartments (Rent per month)
Located in a major Uruguay city:
(1 bedroom) $17,800.00 UYU ($400.00 USD)
(3 bedrooms) $31,500.00 UYU ($710.00 USD)
Located outside of a major city center
(1 bedroom) $13,750.00 UYU ($310.00 USD)
(3 bedrooms) $25,750.00 UYU ($580.00 USD)
Houses (Rent per month)
If you prefer to have some more privacy and a bit of space, renting a home may be a better option. Although the design style of homes in Uruguay is quite varied, they are all built to a high standard and comparable to what you might rent in the United States.
Prices can range anywhere from $700 USD to $10,000 USD per month for a home. A comfortable 3 bedroom villa house on the outskirts of Punta-Del-Este might cost around the $800 USD mark. A 3 bedroom architecturally designed property in Jose Ignacio can be rented for as little as $900 USD per month.
The prosperity of Uruguay means there is no shortage of luxury properties. They are modern homes with all of amenities you might expect from a property in the U.S. However, you will need a big budget as they typically rent for several thousand USD a month.
Buying Property In Uruguay
If you have decided that you love Uruguay and want to stay for several years, you might be better off buying a property. If you are interested in buying, You’ll be happy to learn that there are no rules preventing foreigners from buying property in Uruguay.
To purchase a house or apartment, you will need is a passport and the necessary funds. It’s advisable to work with a local lawyer and real estate broker to ensure you can safely purchase the property at a reasonable price.
Before the sale is finalized, four non-encumbrance certificates must be obtained. These give you the certainty that the property actually belongs to the seller and that the seller doesn’t have debts which impact ownership of the property.
It’s important to note there are several fees and taxes involved when buying property in Uruguay. They are listed in the section on Taxation included below. In terms of price, you can expect to pay about:
- $249,000 USD for a thatched-roof 3 bedroom, 2 bathroom home near the beach in Solís
- $260,000 USD for a modern 2 bedroom apartment with water views in Punta Del Este
- $290,000 USD for a 2 bedroom Mediterranean-style house with spectacular ocean views in Playa Hermosa
- $299,000 USD for a 4 bedroom, 3 bathroom house with pool in Pinares (just west of Punta del EsteTree Hill)
- $360,000 USD for a modern 3 bedroom home close to the beach town of José Ignacio
- $780,000 USD for a luxurious 4 bedroom 4 bathroom home in La Barra, Manantiales, Pueblo Mio
- $1,250,000 USD for a stately 5 bedroom, 5 bathroom home in Parque del Golf, Punta del Este
Utility Costs In Uruguay
Utility bills can be quite expensive in the United States and EU. However, this is not the case in Uruguay, with both general utilities and Internet costs being quite affordable.
For the average sized 2 or 3 bedroom home, expect to pay about $5,250 UYU ($118.00 USD) for Electricity, Heating, Cooling, Water, and Garbage disposal. An standard Internet connection (60+ Mbps, Unlimited Data) will cost about $1,380.00 UYU ($31.00 USD)
Employment & Income in Uruguay
It is possible for expats to work while in Uruguay, as long as you have the right visa. If you choose to work, you will have plenty of opportunities to find a position, as the economy is quite strong.
The average salary (after tax) in Uruguay is about $26,300.00 UYU ($590.00 USD) per month. However, you will be able to find a much higher paying job if you are a highly skilled worker.
Childcare Expenses in Uruguay
Childcare expenses are reasonably affordable in Uruguay, with a month of full day private childcare costing about $11,250 UYU ($250.00 USD).
The quality of the public primary and high schools is quite good and free for all children. However, if you want to enroll your child in an international school, it will cost about $232,500.00 UYU ($5,250.00 USD) annually.
Healthcare & Medical Expenses in Uruguay
Uruguay has an excellent health care system compared to most other South American nations. The doctors are highly skilled and it is relatively easy to make an appointment at a clinic or hospital.
There are currently 56 public hospitals and 48 private hospitals across the country. They have modern equipment and a high standard of care. There is also a British hospital in Montevideo, which has a staff of English speaking doctors.
Expats can use either the public or private health care system. However, expect to pay more for insurance and fees in the private system. Many expats use a health insurance program called Mutualista. It is a membership plan which gives you access to private hospitals for between $100 to $150 USD per month.
It’s worth noting that mutualista does have limits on coverage for pre-existing conditions. These limits may make the program unsuitable for retirees who have chronic illnesses.There are also other private healthcare insurance options available including BlueCross and BlueShield of Uruguay.
The majority of residents are in the national healthcare system, which is called Fondo Nacional de Salud. It provides free healthcare for low income residents and low cost healthcare in public hospitals for other citizens. A monthly payment is required to access the public system along with a cédula (Uruguayan ID card). Retirees receive this card when starting the legal process of becoming a resident of Uruguay.
Expats who run out of health insurance and cannot afford to pay for healthcare can obtain free healthcare in public clinics. However, there be long wait times and limits on what treatments are available.
Related: Health Insurance for Expats
Clothing & Shoes in Uruguay
Uruguayans like dressing up and have a great sense of fashion. They dress in a wide variety of styles from traditional outfits with gauchos and ponchos through to modern outfits from high-end European designers.
Most expats stick to the clothes they might normally wear at home during summer, including flip flops, sarongs, swimwear, t-shirts, and jeans. Everyday clothes are reasonably affordable, however, expect to pay a premium for designer clothing from the U.S. or Europe:
Casual Clothing
1 Pair of Jeans (Levis 501 Or Similar) $3,000.00 UYU ($68.00 USD)
1 Summer Dress or Spring Skirt (Popular chain store) $1,600 UYU ($23.00 USD)
Shoes
1 Pair of Running Shoes (Nike or Adidas) $3,500.00 UYU ($54.00 USD)
Pair of Men’s Business Shoes $3,750.00 UYU (USD $70.00 USD)
Taxes & Legal Information in Uruguay
The Uruguayan government is very welcoming of expats who want to work, invest, or retire in their country. Here is a quick overview of the tax arrangements for expats retiring in Uruguay.
Do US Citizens Have to Pay Taxes While Living in Uruguay?
If you remain a U.S. citizen, you will still have taxation obligations in the United States. This can include:
- Lodging IRS form 40 if you earn more than $10,000 USD per year (including income earned in a foreign country).
- Lodging IRS form 8938 if you have overseas assets worth more than $200,000 USD (per person).
- Completing FinCEN form 114 (known as a Foreign Bank Account Report or FBAR) if you have more than $10,000 USD in a foreign bank account or investment account.
Fortunately, Uruguay and the United States have a taxation treaty, so you will never be taxed twice on your income.
Income Tax in Uruguay
If you spend more than 183 days in Uruguay over the course of a year, you will be considered a ‘tax resident’ of Uruguay. This means you will need to pay taxes on any income earned in Uruguay.
You will not pay tax on most sources of foreign income. This includes social security payments, retirement pensions, capital gains, and rental income. This is one of the many reasons why Uruguay is an attractive retirement destination.
However, there is one exception to this rule. That is for interest and dividends, which are taxed at 12%. This rule is designed to prevent Uruguayans from keeping their income producing assets overseas and avoiding tax completely.
If you have already paid taxes on your interest payments and dividends to the IRS, then you would be exempt from paying tax in Uruguay. This helps tax residents avoid double taxation.
If you are working in Uruguay, you will pay income tax at a rate of between 0% to 30%.
Capital Gains Tax in Uruguay
Expats who are tax residents must pay capital gains tax of 12% on investments in Uruguay. However, if the capital gain is from dividends paid by an Uruguayan owned company, the rate is cut to 7%.
Consumption Tax in Uruguay
Uruguay has a 22% national sales tax called impuesto al valor agregado (IVA). It is levied on most consumer goods.
Real Estate and Property Tax In Uruguay
Buying and selling real estate in Uruguay is reasonably affordable. The fees that are associated with real estate transactions are:
- Notary’s fee: 3.00% (paid by buyer)
- Registration tax: 1.00% (paid by buyer)
- Real estate transfer tax: 2.00% (paid by buyer and seller)
- Real estate agent’s fees: 3.00% (paid by buyer and seller)
Is There A Retirement Tax In Uruguay?
There is no retirement tax in Uruguay, with all foreign income from social security and pension payments being 100% tax free.
Inheritance Taxes in Uruguay
There are no gift, wealth, estate, and/or inheritance taxes in Uruguay. However, there is a 3% tax on inherited real estate, which is payable within one year of the death of the owner. This tax is calculated on the ‘rateable value’ of the property, which is considerably less than the market value.
Related: Expat Taxes
Cost Of Entertainment In Uruguay
You will never run out of things to do in Uruguay. There are countless bars, restaurants, music venues, theaters, sports arenas, tourist attractions, cafes, markets and art galleries to visit. On top of this, you have the spectacular beaches, hiking trails, and waterfalls to explore.
In terms of cost, you will spend about:
- $577.00 UYU ($13.00 USD) for two movie tickets
- $1,590.00 UYU ($36.00 USD) for two theater tickets
- $998.00 UYU ($22.00 USD) for dinner for two at a local pub
- $2,200.00 UYU ($49.00 USD) for three course dinner for two with wine and desert
- $285.00 UYU ($6.00 USD) cocktail at a local club
- $180.00 UYU ($4.00 USD) for a cappuccino
- $170.00 UYU ($3.80 USD) for beer at a local pub
- $1,810.00 UYU ($40.00 USD) for a monthly gym membership
What to Expect Before Arrival In Uruguay
Immigration and Visa Information
Americans won’t need a visa if they are staying in Uruguay for 90 days or less. This gives you plenty of time to explore the country and decide if it your ideal retirement locations.
Once you are certain you wish to retire in Uruguay, the best option is to get a retirement visa. It will give you an Uruguayan passport without an income requirement. You will also be able to ship any possessions into the country without paying duty and you can import your car without paying tax on it.
Retirement visas can take a long time to process (often many months), but you are allowed to stay in the country while the visa is being approved. After 5 years of residency, you can apply for citizenship.
Can I Use USD in Uruguay?
Yes, most shops will accept USD. Most cash machines will also dispense both UYU and USD.
How Much Cash Can I Bring into Uruguay?
Travelers are allowed to bring $10,000 USD in undeclared cash and other assets into Uruguay. Larger amounts must be declared.
How Much Does it Cost to Live Comfortably in Uruguay?
A retired couple could enjoy a fairly comfortable lifestyle in Uruguay for between $1,500 and $2,000 per month. This figure includes plenty of money for rent, food, entertainment, fuel, utilities, health insurance, clothing, and other essential purchases.
How Much Do You Need to Retire in Uruguay?
The amount of money you would need to spend the rest of your life in Uruguay will vary based on your preferred lifestyle, where you live and how long you will live.
If you live frugally, you could retire in Uruguay with $250,000 USD. This is assuming you retire at 65, live to 78 (average American lifespan), and can live off $1,600 per month. For this price, you could rent a 2 or 3 bedroom flat outside of the city center and eat out a few times a week.
For a more lavish lifestyle, you might need closer to $500,000 USD. For this price, you will be eating out most nights and have plenty of spending money available.
Sample Uruguay Monthly Budget
Rent: $580 USD for a three bedroom apartment
Utilities: $120 USD
Transportation: $72 USD for two monthly bus passes
Fuel (If you own a car): $40-60 USD
Groceries: $100 USD
Eating Out: $250 USD
Entertainment: $200 USD
Internet: $31 USD
Health Insurance: $300 USD
Clothes/Shopping: $200 USD
This brings us to a total close to $1,600 USD. For this price, you would be enjoying a comfortable lifestyle within a reasonable budget. You will be in a nice apartment, with money to spend on eating out a few times a week and access to transport. It’s not a lavish lifestyle, but it is certainly comfortable enough for most retires.
If you want a more exciting lifestyle, you would need closer to $3,000 USD per month. This would be enough for a beautiful apartment, eating out most nights, plenty of time in bars or social clubs, and money for additional purchases.
Final Thoughts
Uruguay is one of the nicest countries in South America. Although it isn’t as affordable as some other South American nations, it is has friendly people, low crime rates, and prosperity. It’s definitely one of the most attractive destinations for retirees looking for a destination that is affordable, safe, comfortable, and warm.
