Can’t Afford to Live in Malibu?

Perhaps you can’t afford to live in Malibu, but if you can afford to drive a Malibu, read on; you are about to be introduced to a lifestyle in Paradise equal to or better than Malibu at a fraction of the cost!

In 1997, we purchased a beautiful, newly constructed villa located in the Sierra Madres overlooking Banderas Bay and El Centro, the downtown area of Puerto Vallarta, Mexico. During the first four years of living in PV, we doubled the size of the villa bringing it to nearly 20,000 square feet of construction. It has been featured in a number of architectural books and real estate magazines and was shown many times on the nationally syndicated TV program, “Famous Homes and Hideaways”. That being said, a very unusual incident occurred when we received a phone call from a film studio in Mexico City requesting an opportunity to preview our villa with a group of executives from the Disney Company in Los Angeles. They were searching for the ideal set for filming a new project titled “South of the Border” which was released in 2008. It was cute story about a Beverly Hills socialite that lost her chihuahua while visiting a spa in Mexico. The story was actually taken from the true story about Paris Hilton and the pup that she thought was stolen but was left with her grandmother. The folks from Disney toured the villa, loved what they saw, but rejected it as a possible movie set. The story is to take place in Beverly Hills and they said that although the villa is furnished like the finest mansions in Beverly Hills, the location was too much like Malibu. Since our villa is not going to be the movie set for “South of the Border”, as a consolation, we’ll just have to continue living in an area just like Malibu!

Recently, we had a realtor friend from Santa Cruz, California visit us. After touring our villa, she informed us what she estimated the selling price would be if we were in Malibu. We are absolutely flabbergasted every time that we’re told that our villa would sell for three or four times as much if it were in California. In all probability, we couldn’t afford to live there! Located on the Mexican Riviera, our view in Vallarta is equal to or better than Malibu and the weather is substantially better during the seven month “high season” of November through May.

In Vallarta there are thousands of new houses and tens of thousands of new condos, all having sweeping views of Banderas Bay, El Centro or downtown, and the Sierra Madres. Palm trees, flowering Amapa trees, orchids, bougainvilleas, and other tropical vegetation abound. Multi-colored parrots and tropical birds are routinely seen as they live in the neighborhoods of Vallarta. The climate has to be one of the finest on the planet with an average daily temperature of 73°F, highs of 83°F and lows of 64°F, during the “high season”. There is normally one wet day per month during that period with an average of 0.6 inch of rain, which if it occurs, will do so in the evening.

The houses and condos in PV include all the amenities found in any houses or condos in the States, however, their costs are approximately half of what they are in Florida and a third of what they are in California. Malibu, forget it! Property taxes are .1% of the selling price. During the 22 years that we’ve lived here, there have been no property tax hikes and no property revaluations, even though values have tripled. It’s difficult to imagine what the property taxes on our villa would be if it were located in Malibu. As another note of interest, you pay no capital gains tax on the sale of property in PV if you can show that it was your primary residence for more than five years.

On the downside, mortgages are somewhat difficult to obtain and therefore, most properties are paid for in full upon purchase. Also, when living on the Mexican Riviera, foreigners do not receive title and deed to their property. Instead, the property is held in a 50 year trust where we have the exclusive right to usage. Unfortunately, we’ll probably not survive the 50 year period, however if we do, it will be automatically renewed for another 50 year period. Upon death, our heirs receive the trust and can renew it for another 50 years. Upon sale, the buyer sets up a new 50 year trust. The trust is as safe as holding title and deed and is virtually untouchable by any entity.

Perhaps we can’t afford to live in Malibu but maybe, just maybe, we have something here in the Paradise, known as Vallarta, which is a little nicer than anything in Malibu!