Today California has nothing but its brand name. Increasing housing prices, insane state taxes, and lack of safety. How can all that fit into the brand of the Golden State?
Exactly, it can’t.
The Californian dream is over. And California residents understand it better than anyone else. In 2021 alone, 360,000 people left the state, and it seems that Calexodus is gaining steam.
If you’re thinking about doing the same, our honest advice is to do it immediately. We’re pretty sure that for high-net-worth individuals, nothing will change for the better. It can only get worse.
So, why pay almost half of your income in taxes when you can pay less? And why should you stay in California when you can move overseas and have a better quality of life with the same budget?
Go where you’re treated best. That should be your primary goal. And if you ask us where you should go, we have one place in mind.
At Nomad Capitalist, we believe that Mexico is the best place to move from California. And if you want to know why, this article is for you.
Why Are People Leaving California?
In the 80s, California was a promised land full of opportunities where everybody wanted to try their luck. From Hollywood to Silicon Valley, people believed that a better life was waiting for them in California.
But today, California residents are running away from this state like it’s a sinking ship. So, what has changed?
Rising State Taxes
High taxes are one of the main reasons why people are leaving California. California’s income tax rate is 13.3%, the country’s highest. If you take a look at the sales tax ranging from 7.25% to 10.75%, it’s not much better.The proposed wealth tax makes the situation especially daunting for ultra-high-net-worth individuals whose annual income exceeds $50 million.
High Cost of Living
Another reason why people leave California is the high cost of living. California is one of the most expensive states, and California residents just can’t keep up.
People want to live a stress-free life in a place where they can actually make money. And California can’t guarantee it anymore. Not to sound baseless, just look at the data.
You spend 276% more on rent in California than in Mexico City. Isn’t that insane? Even if you have money, why should you overpay?
Increasing Housing Prices
This news won’t surprise you, but California has been in a serious housing crisis in the past years. The situation worsened during COVID-19 when many people switched to remote work and left major cities like San Francisco. As a result, prices for apartments in suburban areas skyrocketed.
If renting an apartment in California is difficult, then buying real estate that costs less than $1 million is almost impossible. Especially in the Orange County or San Clemente. To be precise, the median home value in California is $898,980, which is 10% more than in 2021. And we believe that it will keep growing.
Low Quality of Life
California still has a reputation as a promised land but is it really that great to live there?
In one recent study California was ranked only 48th best state to live in the US.
California also has the worst infrastructure and education system, and its crime rate is higher than the national average.
Inflation
Sky-high inflation in the US hit hard, and Southern California residents feel it like nobody else.
The Southern California region has the highest prices for food and accommodation in the whole country, which is why business owners, entrepreneurs, and wealthy people are looking for alternatives. And that’s the right approach.
Why be a victim of inflation if you can just leave?
Many people got the idea, and now thousands of Californians are moving out. Some are relocating to Texas, Arizona, Nevada, or New York. Some are even taking one step forward and are heading to the southern border instead.
Why Are Californians Moving to Mexico?
In 2015, our CEO Mr. Henderson called Mexico a soft-landing country for Americans. And the latest news about the California exodus only proves Mr. Henderson was right.
Located just three hours away from California, Mexico has been one of our favorite destinations at Nomad Capitalist. And we’re not alone. One million expats live in Mexico, most of whom are American citizens.
Considering the multiple advantages that Mexico offers, no wonder why people leave California to build a better life in Mexico. Ironically, Mexico has been right in front of them all the time, but they just needed a little push to see how great this country is.
But what exactly is so appealing about Mexico? Why, instead of moving to other states, are Californians going there? So, here are the main reasons.
Lower Cost of Living
The primary reason is that people seek a more affordable life in Mexico for themselves and their families.
As of now, consumer prices in Mexico are roughly 100% lower than in California, while rent is three times cheaper. In Mexico, you can afford a luxury villa with a sea view that you were only dreaming of in California. And we’re not talking about renting but purchasing it.
Considering minimal limitations on foreign ownership and an abundance of fantastic locations, purchasing real estate in Mexico will be a piece of cake.
Besides premium-class housing, you can expect more conveniences in Mexico. For instance, you can hire a housekeeper or a private chef and dedicate more time to your business.
The trick is that moving to Mexico will allow you to have a higher quality of life with the same budget. Entertainment, housing, and food – everything costs less.
Proximity
Another important factor that speaks in favor of moving to Mexico is its geographic location.
Moving to another country is always a life-changing decision. But it’s less frightening when you know that you can visit your family or friends any time you want. Mexico is only three hours away from California, and you can fly back and forth as much as you want.
In addition to the US proximity, you will have freedom of movement in Mexico. Mexico City has multiple direct flights to other countries. You can travel the world without obstacles and diversify your spare time.
Spend one weekend on the Caribbean island, next weekend in Europe. Who said that you can’t?
Weather
Mexico has something that people leaving California are used to – gorgeous nature and perfect Southern California weather. No matter where you decide to reside in Mexico, it’s always warm and sunny everywhere.
Mexico also has many cities where you can enjoy a comfortable life. If you prefer a dynamic and eventful lifestyle, consider moving to Mexico City.
Sipping wine in the world’s largest revolving restaurant, having a hot air balloon ride, and trying delicious Mexican delicacies. Honestly, there are so many things you may love about Mexico City.
But if you’re tired of rushing all the time and looking for a peaceful place to stay, we would suggest Playa Del Carmen with its charming streets and white-sand beaches.
Mexican Citizenship
At Nomad Capitalist, we have always said that a Mexican passport would be a valuable asset to your passport portfolio.
Mexico has high-quality citizenship that ranks 25th in global freedom. You can travel to 159 countries with a Mexican passport, including Schengen countries. And it’s relatively easy to obtain one.
How Can I Get a Mexican Passport?
There are various options to get a Mexican passport.
The first option is to obtain a temporary residency first. To get qualified, you can make an investment or buy a property in Mexico. With a temporary residency, you can stay in Mexico for four years. And once you feel that you want to stay for a longer time, apply for permanent residency and later for Mexican citizenship.
The second option is to become a Mexican citizen through citizenship by descent. You will get a permanent residency if you can prove that you have relatives in Mexico or other Latin American countries. Later you can apply for citizenship.
The last option is for retirees. If you prove you have enough savings, you can get a temporary residence and get citizenship in the future.
To get a Mexican passport, in all cases, you must have stayed 180 days in Mexico in the past five years. If you want to learn more, we have a detailed article about how to get Mexican citizenship.
What About Taxes?
And now it’s time to talk about taxes.
How much money you’ll pay in taxes in Mexico will solely depend on your particular case. The good news is that Mexico doesn’t have a wealth tax, and Mexican real estate taxes are low.
If you want to buy real estate in Mexico, you’ll have to pay 2% of an acquisition tax and up to $300 of annual property taxes. As you already know, real estate prices in Mexico are way lower than in California.
As the average housing price in Mexico is $65,000, we can confidently say that now is a great time to make an investment in Mexican real estate. But hurry.. According to experts, the prices will increase.
When it comes to income tax, you have to be creative. Yes, Mexico’s income tax ranges from 1.92% to 35%. But, Mexico also allows dual citizenship. If you don’t have a Mexican-sourced income and you own a tax residency and property in another country, you can be exempted from paying taxes in Mexico.
At Nomad Capitalist, we always said that you could protect your assets with multiple citizenships. And Mexican citizenship can be a great plan B for Americans.
To Sum Up
When you’ve been told all your life that the US is the best place to live, it may be difficult to make a grand move and leave.
However, people’s patience tends to run out sooner or later, and we can see it pretty clearly with a California exodus gaining momentum. People moving out of California are looking for countries where they can be treated best. And Mexico is definitely one of their favorite destinations.
Many years ago, our CEO Mr. Henderson left the US for good. And if you’re thinking about doing the same but don’t know where to start, our Nomad Capitalist team is here for you.
We have helped hundreds of people move their business overseas, legally reduce their taxes, and become dual citizens. If that’s what you’re looking for, feel free to reach out to us. We’ll create a holistic plan that will serve your purpose.
FAQs
Why are most people leaving California? ›
Well, there are a few reasons. The decision to leave were partly fueled by the COVID-19 pandemic, including new opportunities for people to work from home. Also, the high cost of living in California also drove people out.
Why are people leaving California and moving to Mexico? ›But a rising number of them are migrating out of the country and instead, heading south to Mexico to escape rising housing prices, traffic and expensive healthcare.
Why are so many Americans moving to Mexico? ›Lower Cost Of Living
What is this? With skyrocketing inflation and living costs in the United States, many Americans are finding that their dollars go much further in Mexico. Housing, healthcare, food, and transportation are just a few of the things that are significantly cheaper in Mexico than in the United States.
People are moving to places like Mexico where their fixed incomes stretch further because they're not paying as much for the basic necessities and their incomes are not being hit by rising costs that they cannot avoid, especially property taxes.
What state are most Californians moving to? ›Most Common Places People Migrate from California
Texas is currently the number one destination state for those leaving California.
Between July 2021 and July 2022, California lost roughly 211,000 people according to data from California's Department of Finance. Half of those — 113,048, were from Los Angeles County alone. Los Angeles County — California's largest county — lost around 160,000 in the last 12 months with most leaving for other states.
Why are Americans leaving California? ›The state's high cost of living (housing in particular) has been a major cause of the so-called California exodus. Renting an apartment is expensive in many parts of the state. The average rent price for apartments in Los Angeles is between $2,262 and $5,095 in 2022, according to Rent.com.
Why do people move back to Mexico? ›The number one reason why U.S. citizens move to Mexico is the cost of living. The average cost of living in Mexico City for a single adult is $535 a month without rent. Mexico City is also 61% less expensive than living in New York City. You can't beat those numbers!
Can Americans live safely in Mexico? ›Mexico is a very safe country to travel to and live in as long as you keep in mind some common-sense safety tips. With a vibrant culture, rich food, fantastic climate, and friendly people, it's an ideal destination and well worth the trip.
What part of Mexico are Americans moving to? ›Mexico City has seen an influx of people migrating to the historic metropolis, especially during the pandemic when remote work made it possible to work from different places.
What are the disadvantages of living in Mexico? ›
- But, It's Not All Paradise!
- Basic Utilities Aren't Always Reliable.
- Internet Speed Isn't As Fast.
- Uneven Sidewalks Or NO Sidewalks.
- Lack of Saftey Building Codes and Inspections.
- You Can't Flush Toilet Paper.
- Public Bathrooms Are NOT Free.
- Topes Can Hurt Your Car.
In 2021, over 360,000 people left California in what many are calling The California Exodus. But a rising number of them are migrating out of the country all together and instead, heading south to Mexico to escape rising housing prices, traffic and expensive healthcare.
Are there a lot of Americans moving to Mexico? ›There are now a record number of U.S. Americans becoming temporary residents in Mexico as of 2022. According to an analysis from Bloomberg, there was an 85% increase between 2019 and 2022 in the number of Americans becoming temporary residents in Mexico.
Can you live off $1,000 a month in Mexico? ›In Mexico, you can live a comfortable life on $1,000 a month. The average cost of living for expats, digital nomads and retirees varies between $600 to $2,000 depending on one's lifestyle choices and their location. Baseline costs in Mexico are around $750 a month.
What is the number 1 state people are leaving? ›1. California
Rising housing costs, rising taxes and politics seem to be driving many people to look for opportunities elsewhere. Other factors that emigrants have cited are the rising threat of wildfires and the constantly increasing cost of living.
Small ones: Delaware got the fewest Californians, only 161. Next was North Dakota at 404; West Virginia at 940; Vermont at 1,048; and New Hampshire at 1,110.
Does moving to California make you happier? ›Practicality aside, it turns out moving to California probably won't make someone happier. The problem lies in the word itself. According to Nobel prize-winning psychologist Daniel Kahneman, there are two different ways of looking at well-being: current mood and overall satisfaction.
What is the future of California? ›The state experienced 7 of its 10 warmest years on record from 2012 to 2018, and warming is expected to continue. Sea level is predicted to rise 2 to 7 feet on California's coast by 2100, and the frequency of extreme events such as droughts, heat waves, wildfires, and floods is expected to increase.
What states are people leaving? ›California, Illinois, Michigan, Massachusetts, and New York were at the top of the list of states people are leaving.
Is there an exodus out of California? ›In 2021, it was big news — the “California exodus.” Now, it just looks like the new trend: California's population is still shrinking. According to the latest population estimates from the U.S. Census Bureau, California's total population declined by more than 500,000 between April 2020 and July 2022.
Why not to move to California? ›
There are many reasons why someone should not move to California, including the fact that the state is expensive, has high taxes, wildfires, earthquakes, water droughts, and high housing costs, and the traffic can be unbearable in some parts of the state.
Why are so many companies leaving California? ›The reasons vary—but there are some common ones including high tax rates, punitive regulations, high labor costs, and a high cost of living. Many CEOs say their employees can't afford housing in bigger cities like San Francisco. Red tape – including long permitting processes-- doesn't help, either.
What happened to California 2023? ›Periods of heavy rainfall caused by multiple atmospheric rivers in California between December 31, 2022 and January 25, 2023 resulted in floods that affected parts of Southern California, the California Central Coast, Northern California and Nevada.
What kind of people are leaving California? ›Whites and African Americans have the highest rates of net migration out of California. Cost of living is clearly a major factor, as lower-income members of every racial and ethnic group leave more often than they arrive.
What states are Californians fleeing to? ›Citing changes in work-life balance, opportunities for remote work and more people deciding to quit their jobs, the report found that droves of Californians are leaving for states like Texas, Virginia, Washington and Florida. California lost more than 352,000 residents between April 2020 and January 2022, according to ...
Why does California have so many homeless people? ›Key Takeaways. California's homeless crisis is associated with high housing costs, inadequate shelter spaces, deinstitutionalization, and changes in the criminal justice system.
How long can an American live in Mexico? ›Your visitor permit is valid for the number of days granted by the immigration official and written on the permit —that will never exceed 180 days, but may be less than 180 days— starting from the date of your arrival.
How long can a U.S. citizen stay in Mexico? ›General Information. A visitor visa allows you to stay in Mexico for a period of up to 180 days, provided that you are not carrying out any paid activities.
Where do most U.S. citizens live in Mexico? ›Lake Chapala is Mexico's largest lake, and the surrounding area is also home to the largest concentration of U.S. expats in the world. U.S. and Canadian expats have been attracted to the Lake Chapala area by homes with gentle arches, hand-painted tiles, and adjoining gardens that bloom all year round.
What is the nicest part of Mexico to live? ›- Mexico City – The Place That Has It All.
- Mérida – Quiet Warmth and Beauty. ...
- Guadalajara – Affordable City and Retiree Living. ...
- Monterrey – Mexico's Hardest Working City. ...
- San Miguel de Allende – Loved by Expats and Visitors. The town of San Miguel de Allende is in Mexico's central heart. ...
Can I collect Social Security and live in Mexico? ›
If you are a U.S. citizen, you may receive your Social Security payments outside the U.S. as long as you are eligible for them.
What city in Mexico has the most American? ›Lake Chapala: Mexico's largest expat hotspot
Lake Chapala is Mexico's largest lake, and the surrounding area is also home to the largest concentration of U.S. expats in the world.
- Merida. Widely acknowledged as the safest city in Mexico (and even Latin America), your biggest safety concern in Mérida will probably be the busy traffic. ...
- Playa del Carmen. ...
- Mexico City. ...
- Puerto Vallarta. ...
- San Miguel de Allende. ...
- Sayulita. ...
- Huatulco.
Yes, you can go all in and decide to make your move to Mexico permanent but there are also lots of other options. Think about the lifestyle you want and what makes the most sense for you and your family. We live in Mexico full-time now.
How much is rent in Mexico? ›| Expense | U.S. $ |
|---|---|
| Rent (furnished, two-bedroom home) | $750 |
| Electricity | $30 |
| Water | $15 |
| Gas | $30 |
Yes, you can absolutely live in Mexico for $1500/month. Many people already do it. The trick is having and sticking to a budget. You'll have to set a realistic budget for a rental, health insurance, groceries, eating out, transportation, and entertainment.
How much money do you need to live comfortably in Mexico? ›...
Average Cost of Living Across Mexico: $600 – $2,000.
| Monthly Expenses | Cost (USD$) |
|---|---|
| Food | $300 |
| Transportation | $20 |
| Entertainment | $50 |
| Total | $745 |
Many of them work in California and live just below the border in the Mexican state of Baja California, or other areas near the border like Tijuana. It's a lot of people commuting who actually live in Mexico who actually work in the states. So it's like thousands and thousands of people just crossing daily.
Why are Californians moving to the South? ›Why are people leaving California for Texas in droves? People are moving to Texas primarily for economic reasons. They want good job opportunities and to be able to afford the type of lifestyle they want to live.
Where is everyone from LA moving to? ›People leaving Los Angeles are moving to Las Vegas in record numbers. Los Angeles ranked as the second major U.S. metro area people are leaving, according to data. San Francisco was first.
Is it a good idea to move to Mexico? ›
Mexico is a popular choice for expats, digital nomads, and retirees. The country offers a low cost of living, beautiful scenery, world-class food, excellent weather, and high quality of life.
Is living in Mexico cheaper than us? ›the US. It is considerably cheaper to live in Mexico than in the United States. While there are more and less expensive cities in Mexico, you're likely to have an objectively better lifestyle in Mexico than in the U.S. given the same level of resources. Overall consumer prices are nearly 100% lower, not including rent.
Does Mexico have good medical care? ›Mexico boasts an impressive and efficient healthcare system consisting of public and private schemes. The majority of Mexican hospitals are excellent and are staffed by highly trained and often English-speaking doctors. However, some nursing and care staff might not speak English.
What city in Mexico is the cheapest to live? ›Puebla is one of the cheapest places to live in Mexico. The monthly cost of living in Puebla starts from around $1,150 USD depending on your lifestyle choices. This includes rent, groceries, eating out, activities, coffee, and more. If you're a couple, it's more like $1,900 USD.
What is the gas price in Mexico? ›...
Mexico Gasoline prices, 06-Mar-2023.
| Mexico Gasoline prices | Litre | Gallon |
|---|---|---|
| MXN | 23.960 | 90.698 |
| USD | 1.323 | 5.008 |
| EUR | 1.254 | 4.747 |
One of the BIG reasons to move to Texas from California is the taxes. California state income tax is the highest in the country, on all levels. Californians pay as much as 13.3% in state income tax and, depending on local rates, between 7.25% and 10.75% in sales tax.
Why are retirees leaving California? ›The main reasons people say they want to leave California are taxes and cost of living, he said. And, to some extent, people leave because their kids moved out of state because they couldn't afford to live in California and buy a house, he said.
What big company just moved from California to Texas? ›Infrastructure engineering giant AECOM, a Fortune 500 company, announced in December it will relocate its global HQ from Los Angeles to Dallas.
Who pays more in taxes California or Texas? ›Californians pay $6,813, per capita in state and local taxes each year, according to the Tax Foundation. Texans pay $4,481 per year, per capita. That's about two-thirds of what Californians pay.
Is California still losing population? ›In 2021, it was big news — the “California exodus.” Now, it just looks like the new trend: California's population is still shrinking. According to the latest population estimates from the U.S. Census Bureau, California's total population declined by more than 500,000 between April 2020 and July 2022.
Is it better to live in Texas or California? ›
California has near-perfect weather and close proximity to entertainment and culture, but for many people that's not enough of a reason to stay. Texas is cheaper and has plenty of cities to suit any individual's needs. Dallas, Austin and Fort Worth have bustling arts scenes.
How long will California be habitable? ›America has been under a global climate crisis for a long period of time – chaos is now interfering with our livable climate and if we don't do anything to preserve it, parts of California could submerge as soon as 2040.
What is California's future? ›The state experienced 7 of its 10 warmest years on record from 2012 to 2018, and warming is expected to continue. Sea level is predicted to rise 2 to 7 feet on California's coast by 2100, and the frequency of extreme events such as droughts, heat waves, wildfires, and floods is expected to increase.
What is the new minimum wage for 2023 in California? ›Rate Changes Due to the Minimum Wage Increase – January 1, 2023. Due to the enactment of Senate Bill (SB) 3, the California minimum wage increased to $15.50 per hour, effective January 1, 2023, for all employers.