Tips for Snowbirds: Southbound Savvy
Let’s face it – we may be Canadians but we really don’t like the cold. That’s why so many of us flee to the sun during the winter.
The actual numbers are staggering. Visit Florida, the state’s official tourism agency, reports that in 2012 a record 3.6 million Canadians spent time in the Sunshine State. That’s more than 10 per cent of the entire population of this country!
Add in those travelling to Texas, Arizona, California and other points south, and you have a huge exodus of Canadians heading to warmer climes in winter. If you’re going to be among them, there are several things you need to know before you pack your bags. Here are five tips that may save you money and avoid a lot of frustration.
1. Get travel insurance
A few years ago, my late wife was suddenly taken ill during our Florida vacation and had to spend a week in hospital. The medical care was first-rate, and the facilities were akin to a four-star hotel, with private rooms for all patients. As you might expect, the bill was correspondingly high. Without insurance, it would have cost us tens of thousands of dollars. Since we had coverage, we paid nothing – not one penny from our own pockets. Moreover, we had excellent telephone support all the way through. We were fortunate. Based on reports in the media, including an in-depth feature on CBC’s Marketplace, many Canadians are having their claims denied due to technicalities. Usually, this involves not completing the application form correctly. It’s easy to make a mistake; some of the forms are lengthy and complex. It’s a good idea to have your family doctor review it with you in advance. What’s the point of paying hundreds of dollars in premiums only to find the protection isn’t there when you need it?
2. Be wary of private rentals
There are many websites where you can find accommodations for rent by owners. Most are legitimate, but scammers are always a danger. A typical ploy is to advertise a property that the con artist doesn’t actually own and demand payment in advance. When you show up to take possession, you discover you’ve been had.
For starters, Florida’s property taxes on non-resident owners are outrageously high. You’ll think the taxes on your Canadian home are cheap once Florida gets you in its clutches. Then there’s the risk of being caught up in U.S. estate taxes if the owner of the property passes away. Add in all the costs associated with a warm weather climate (pest control, mould damage, pool maintenance, etc.) and the worry about hurricanes every summer.
4. Keep track of your time
Both the U.S. and Canada are interested in how long you spend down south. Your province wants to know if you’ve been away too long to maintain for health insurance. The limit varies from one province to another; Ontario allows you to be gone for 212 days or about seven months while the limit in Alberta is six months.
The U.S. is interested in the length of your stay because they’d like to tax you – the Internal Revenue Service (IRS) is desperate for money and will get it anywhere it can. Long-stay visitors have to meet a “substantial presence” test to determine if they might be taxable as a “resident alien.” To determine if you fall into this category, apply the following test:
Count each day or part day spent in the U.S. in 2013 as one day.
Count each day spent in 2012 as one-third of a day.
Count each day spent in 2011 as one-sixth of a day.
If the total is greater than 182, you qualify as a resident alien.
To illustrate, if you spend 150 days (about five months) in the States this year and the same amount in the two previous years, the total based on this formula would be 225, well in excess of the limit.