Panama Buying Property in Panama

Buying Process, Fees & Taxes

Can foreigners buy property in Panama?

Yes, foreigners can buy property in Panama and the Government of Panama welcomes investment from overseas buyers. There are no restrictions on foreign buyers acquiring real estate in Panama and foreign buyers enjoy the same rights as Panamanian citizens.

Buying process

Buying property in Panama is a relatively simple process, which typically involves the following steps:

1. Begin your property search and find your perfect property
2. Search and find lawyer
3. Make offer
4. Offer accepted
5. Refundable reservation to secure unit for period of time (typically 14 days)
6. Lawyers review and iron out Promissory Purchase Contract
7. Both parties sign contract
8. Typically 10% is transferred to seller as a firm deposit
9. Remaining 90% is paid upon deed transfer with notary (typical closing period 45 to 60 days)
10. Buyer is responsible for registration fees and notary fees and their own legal expenses
11. Seller is responsible for broker commission / transfer taxes and their own legal expenses

Fees & taxes

Transfer Tax

The seller is responsible for paying a transfer tax of 2% of the updated registered value (registered value + 5% per year of ownership) of the property or the purchase price (whichever is higher).

Property Tax

As of January 2019, property tax on a property declared as a primary residence is payable according to the property’s declared value in the Panama Public Registry, as follows:

• $0 to $120,000: Exempt,
• $120,001 to $700,000: 0.5% of the value,
• Over $700,000: 0.7% of the value.

Tax on Secondary Residences, commercial property or industrial property is payable as follows:

• $0 to $30,000: Exempt,
• $30,001 to $250,000: 0.6% of the value,
• $250,001 to $500,000: 0.8% of the value,
• Over $500,000: 1.0% of the value.

Some properties are exempt from property taxes.

Residency & Citizenship

How long can a foreign citizen stay in Panama?

Citizens of the USA, Canada, UK, EU and many countries in the Caribbean and Latin America are permitted to visit Panama without a visa for up to 180 days.

How do you become a resident of Panama?

Panama actively encourages financially self-sufficient foreign citizens to move to the country and retire in Panama and offers a range of routes to residency, including:

1. Friendly Nations Visa: Citizens of over 50 friendly nations (including the USA, Canada, UK and EU) who would like to relocate to Panama and can demonstrate economic activity in Panama (such as establishing or purchasing a corporation and making a relatively small deposit in a bank account of at least $5,000) may qualify for the Friendly Nations Visa fast track permanent residency program. This program allows successful applicants to become resident in Panama but does not include a requirement to live in Panama.
2. Retirement Visa (Panama Pensionado Visa): Retired individuals who can demonstrate a pension income guaranteed for life of at least $1,000 per month from a governmental or private source ($750 per month in the case of those who have purchased a property in Panama with a minimum value of $100,000) are eligible to apply for the Pensionado visa program. This program offers a range of benefits including discounts on entertainment, restaurants, medical care, airfares and utility bills.

How do you become a citizen of Panama?

Individuals who have lawfully resided in Panama for 5 years can apply for citizenship by naturalization.