Life in Vanuatu: Expensive or Cheap?

Life in Vanuatu in 2024

Vanuatu consists of 83 islands, each with its own character, mindset, and culture. The lack of a developed transport network and limited internet access create a self-sufficient way of life in many regions, reinforcing the population's distinctive local identity.

Barter and subsistence farming are important parts of the economy. More than 70% of the local population does not depend on money. Instead of shopping at supermarkets, indigenous residents tend to trade produce grown in their own gardens. This not only strengthens neighborly relations but also provides resilience against economic fluctuations.

Since 2000, Vanuatu's government has been tracking price changes. The results are not the most encouraging: updated data show a significant rise in the cost of core categories of goods and services. Even so, residents adapt, using local resources and supporting one another through community ties.

Life in the capital, Port Vila, differs from life on the other islands. There are more supermarkets and better infrastructure here. This is the city foreign investors come to when buying real estate for the purpose of obtaining citizenship.

Currency and wages

The national currency is the vatu. The smallest denomination is 1 vatu, the largest 10,000 vatu.

As of June 1, 2024, one dollar buys approximately 120 vatu. No excessive swings in the local currency's value have been recorded over the past several years.

Average wages in Vanuatu vary depending on the size and type of enterprise. At micro-enterprises, with no more than 15 employees, the average salary is around $607.68. At small enterprises with up to 100 employees, the average salary rises to $911.52. Medium-sized companies with 100 or more employees offer an average salary of $1,114.24, while large enterprises with more than 250 employees can offer an average salary of $1,417.92. In the public sector, the average salary is approximately $810.56.

These figures reflect Vanuatu's economic diversity and show how different areas of business adapt to local conditions, using the resources and opportunities available in the country.

Average cost of living

Let's look at the main spending categories for the local population and work out the average cost of a basic shopping basket.

Rent ranges from $660 for a modest one-bedroom apartment on the outskirts to $1,600 for a spacious three-bedroom apartment in the central districts of the capital.

The price of petrol currently stands at $1.48 per liter, and public transport tickets cost $1.32 per ride.

Utilities for an 85-square-meter apartment cost $188 a month, while unlimited internet at 60 Mbps costs $96 a month.

Let's run through the basic shopping basket. Prices for staple food items are currently as follows:

• a liter of milk: $1.76;
• a kilogram of rice: $1.82;
• a carton of eggs (12): $4.07;
• a kilogram of chicken: $7.60;
• half a kilogram of white bread: $2.07;
• a kilogram of bananas: $2.71;
• 0.5 liters of local beer: $1.09;
• a bottle of wine: $7.35.

Leisure also takes its share of the budget. For example, a single movie ticket costs at least $8. Residents and visitors in Vanuatu spend an average of 10% of the family budget on clothing and footwear each month.

Real estate prices

Buying real estate in Vanuatu gives foreign nationals the opportunity to obtain a local passport. But that is not the only benefit of such deals. Owners of apartments and houses can also earn income from renting out their properties.

The average price per square meter of residential real estate in Vanuatu is $800-950. High-end properties, such as villas in premium residential complexes, can cost $5,000 to $8,000 per square meter.

Vanuatu has a fairly favorable tax system. For example, there is no capital gains tax. This means that if you sell your apartment for more than you paid, you don't have to pay tax on the profit from the sale.

There is also no gift tax or inheritance tax here.

When buying real estate, an investor must pay:

• a registration fee: 7% of the sale price of the property;
• insurance: 0.5% to 0.7% of the value;
• legal fees for the transaction: a maximum of 1% of the price of the property.

Real estate in Vanuatu can generate passive income. Today, many foreign investors rent out their apartments. The average rent for a three-bedroom apartment in the capital is $2,000 a month. Renting a house in more remote areas brings in an average of $800 to $1,400 a month.

Landlords should keep in mind that Vanuatu applies a rental tax of 12.5% on income earned from long-term rentals. This tax is paid twice a year. There is one caveat, though: the first 200,000 vatu of rental income is not taxed.

Property owners who do not live in Vanuatu permanently can hand off the rental process to a management company's staff. The cost of such services ranges from 7% to 10% of rental income. This usually covers finding potential tenants, communicating with them, move-in, as well as cleaning the property and checking tenants out.

Vanuatu is a paradise where everyone can find something for themselves. This country offers not only stunning scenery and a warm climate, but also a unique opportunity to live in harmony with the environment, enjoying every day.

Most people who come here are foreigners who want to live close to nature, and those who want a backup base for themselves in case of unforeseen political or economic situations back home.

If you're drawn to a life filled with peace and calm, where every day is a chance to rest and be inspired, then Vanuatu could well become your second home.