Snowbirding 101

Many Canadians dream of no more cold; no more grey; no more bundling up in boots, scarves and gloves. No more wishing and hoping spring could get here sooner.

No more winter.

As dreamy as such an escape may sound, the decision to become a snowbird and spend the winter down south isn’t one you should take lightly. Spending part of the year in another country comes with a myriad of financial and lifestyle implications, all needing consideration before you make the decision to leave winter behind.

With that in mind, here’s an overview of things to think about before becoming a snowbird.

Choosing your destination

The quality of your snowbird experience will depend in large part on where you choose to spend the winter.

The majority of Canadian snowbirds choose the U.S as their winter destination. And for good reason: it’s right next-door, getting there and getting around is easy, and there’s a minimum of culture shock.

But it’s not the only country to consider. There’s a growing contingent of snowbirds in Mexico (on the Pacific coast, and also in the central highlands above Guadalajara). In recent years, active and adventurous snowbirds have chosen Central America as a winter destination: Belize, Panama, Costa Rica are all becoming attractive spots for extended winter stays.

Begin your decision process by isolating the important considerations. Price of accommodation and travel time are good starting points. Then, factor in weather: even between familiar U.S. sunbelt destinations such as Florida (humid) and Arizona (bone-dry) there can be a lot of difference in climate.

Perhaps most important consideration is the feel of a particular place. Some destinations are known for their laid-back atmospheres, others for their active, social cultures.

Should you rent or own?

A lot of snowbirds dream of owning their place in the sun, whether it’s on the beach, beside the lake, or across from the golf course. Others don’t want to put up with the hassles — they’d rather rent and leave the taxes, insurance, and home maintenance to someone else.

Either option is viable, and each has its advantages and disadvantages. Think about whether you’ve fallen in love with a particular destination (owning), or look forward to exploring a new part of the world every year (renting). Is heading south for the winter something you see yourself doing every year (owning), or only once in a while (renting)? Will your stays be lengthy (owning), or do you plan on staying only a few weeks each year (renting).

Understanding U.S. taxes

In response to the widespread perception non-residents are taking advantage of the U.S. tax code, the Internal Revenue Service has tightened up reporting laws for visitors. That includes snowbirds.

Even though you may be a Canadian citizen (and intend to remain one), and only visit the U.S. in winter, you could still owe tax to the U.S. government. And even if you don’t, you still may have to file a U.S. tax return.

It all depends on how much time you spend in the U.S. every year: if you spend fewer than 31 days in a year, you’re OK. If you spend more than 182 days, you’ll need to file a return and declare any income from U.S. domiciled assets. If it’s in between, you’ll need to make a calculation based on how much time you’ve spent in the U.S. over the previous three years.

If you plan to regularly spend your winters in the U.S., it’s possible you’ll have to file a U.S. tax return sooner or later. So it makes sense to familiarize yourself with tax obligations and reporting responsibilities. Don’t be afraid to seek help from a cross-border tax professional—your bank account will thank you for it.

Taking care of your health

You’ll also need supplementary health insurance.

Technically, all Canadians are covered under their provincial plans for any time they’re in the U.S. (or overseas, for that matter), but coverage is extremely limited.

In Ontario, for example, OHIP only covers the first $400 of medical expenses incurred in the U.S. If you live in BC, your provincial plan will only cover $75 a day for hospital stays. Other provinces offer slightly different coverage, but it’s unlikely they’ll come anywhere near paying the total cost of a visit to a foreign hospital.

Plenty of insurance companies offer specialized medical coverage for snowbirds. Websites like Kanetix.ca, CARP.ca and Snowbirds.org are good places to comparison shop.

Costs will depend largely on your age, general health, where you’re travelling to, and the proposed length of stay.

Another important consideration is any pre-existing medical conditions you may have. If a condition is serious, you need to report it and pay the rated premium. If you don’t you’re leaving yourself open to a denial of coverage in the event you fall ill.