Panama is famous for pristine beaches, lush rainforests, enviable climate, and friendly communities. It is also known for highly affordable luxury properties and an especially low cost of living, making it a haven for expats who want to squeeze the most out of life. If you dream of moving to this isthmus nation, whether it’s for a business venture, retirement, or simply a change of pace, this guide to Panama real estate for expats tells you everything you need to know about buying a property here.
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THE PANAMA PROPERTY MARKET
Panama’s real estate market has been steadily growing through the years, which is the reason several international financial and real estate firms have sought to establish themselves and do business here, including HSBC, Citibank, Microsoft, Procter & Gamble, Caterpillar, Inc., as well as real estate firms in the US, to name a few.
As for real estate options, the tiny country hosts a wide array of property types including luxury homes, modern houses, coastal properties, penthouses, villas, condos, and more.
The starting price for a 3-bedroom expat Panama real estate in a coveted area can be $300,000, but the number can vary greatly depending on a great number of factors. It is normal to see houses valued at $400,000 or more. Still, that’s considerably lower in price and with better features than what you’ll get in the US for the same price.
The process of buying property in Panama is similar to the way it’s done in most countries. Properties are titled to reflect the legal ownership, and both nationals and foreigners can access mortgages to finance the purchase of a property. It’s worth noting that in Panama, lenders focus more on an applicant’s ability to pay and less on credit history, as is the norm in most western countries. Titled properties are recorded in Panama’s public registry, which is accessible online.
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WHAT IT’S LIKE LIVING IN PANAMA
Living in a tropical country like Panama sounds like a lot of fun, but it’s worth a deep dive to find out if it fits your longer-term aspirations. Before you pack your bags and head over here, let the following pointers guide you.
Cost of living
Sources claim that the cost of living in Panama is 32.7% lower than in North America. A resident can expect to spend $1,120 to $8,000 a month, depending on lifestyle and expenses.
Although living in Panama doesn’t mean you get to live lavishly for pennies, anyone can manage a comfy life with a modest salary when residing here. Of course, those who earn more will be able to live in pricier Panama real estate for expats and enjoy a more luxurious existence because Panama is definitely not lacking when it comes to life’s finer things.
Quality of life
The cost of living might be lower than in many other places, but that doesn’t mean the quality of life is low as well. In fact, Panama has led the world in wellbeing for two years in a row. The country is also known for providing a safe living environment for all, while ranking highly in taxation and tolerance.
The country’s political environment is a democratic system based on justice, equality, and the rule of law. People here are notoriously cheerful, and will go out of their way to help you even if you don’t speak their native language. There is very little crime here, as you can read from this country report, as long as you practice common sense and do your due diligence.
Healthcare is one aspect where Panama is topnotch. Here, you’ll find a lot of competent doctors, state-of-the-art medical equipment and facilities, and high quality healthcare services, while costing a fraction of what you’ll usually find in North America. Even rural areas have well-equipped hospitals where city doctors hold clinics and see patients on a regular basis. No matter where you decide to live and purchase Panama real estate for expats, you won’t have trouble finding an English-speaking doctor nearby who can provide you with the care you need.
With regards to infrastructure, new roads, bridges, and other public works are always being built, with plenty of modernization projects in the pipeline. All over the country, you can find reliable internet and mobile phone service.The water from the tap is potable in most areas.
Beautiful weather and nature
Panama boasts a warm and pleasing tropical climate all year round. It never snows and temperatures rarely go over 90°F for too long. Shoreline communities like Bocas del Toro, Coronado, and Panama City tend to be hotter, but you can always head to the beach and plunge into ocean waters. For those who want milder climes, the temperate highlands of Altos del Maria, Los Altos de Cerro Azul, and Boquete are a perfect fit.
Whichever expat Panama real estate you decide to buy, you’re never far away from wonderful green color palettes and pure, crisp air. The region’s lush and diverse fauna is definitely one to marvel at, which is why ecotourism is one of the nation’s major industries.
From miles of white sandy beaches, to rugged mountains, to dense jungles, the natural scenery in Panama is truly breathtaking.
Established expat communities
Practically speaking, any foreigner can purchase a property and live anywhere in Panama. That said,for those who prefer living alongside their fellow “extranjeros,” you can find established expat Panama real estate communities in many areas in the country.
Purchasing Panama real estate for expats in these areas means that you’ll be able to get by with day-to-day living even when you only know basic Spanish, as you’ll be around people who can speak English, even if not fluently.
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WHERE CAN EXPATS LIVE IN PANAMA?
Often cited as one of the best places to live overseas, Panama offers a variety of communities for expats to choose from.
Each location possesses its own unique character, with different amenities that suit different lifestyles and budget. Here are some of the most popular communities that feature the best of Panama real estate for expats.
Boquete
As one of Panama’s premiere expat destinations, Boquete regularly finds itself in many “Best Places to Retire” lists. The sprawling district of about 25,000 people is known for its fertile land – almost 80% of Panama’s fresh produce comes from Boquete and its surrounding areas. Likewise, numerous coffee and flower festivals are held here each year, attracting tourists and participants from all over.
Aside from its agricultural leanings, the community of Panama real estate for retirees also has a thriving music and arts scene, most notable of which is the yearly Boquete Jazz & Blues Festival held in March.
The community also has several golf courses, a wide array of restaurants, and a whole host of activities to help keep expats busy and entertained all year round.
Bocas del Toro
For those who want the Caribbean atmosphere without the overcrowdedness, Bocas del Toro Panama real estate is ideal for you. Located on the Caribbean side of Panama, Bocas is an archipelago consisting of nine islands with stunning beaches and thick rainforest all throughout. There are plenty of activities to enjoy on the seven large islands, including surfing, scuba diving, island excursions, and more.
As a small archipelagic setting, the urban amenities in Bocas are basic. Here, you won’t find any big name stores, no private hospitals, no cineplexes. Major cities are also a good distance away. However, if you’re looking for a respite from the ruckus of life, Bocas del Toro, Panama real estate is the place to be.
Coronado
Hands down the most popular beach community in Panama, Coronado prides itself on its year-round mild weather, uncrowded beaches, and a warm and welcoming expat community.
Home prices in Coronado are among the highest in Panama, with some of the biggest gated communities located here. Amenities include golf courses, shopping plazas, restaurants, major grocery chains, and numerous hospitals and clinics.
As one of the oldest expat communities in Panama, Coronado has grown into a lively beach community with all the trappings of modern life. Luxury homes and high-rise condos abound in the Panama real estate for retirees listed here, and there’s high-speed internet, cellular service, and cable TV for residents to enjoy. Coronado’s high-value lifestyle may cost a pretty penny, but when it comes to comfort and convenience, it’s the place to beat.
David
Panama’s third largest city (after Panama City and Colón) is home to almost 200,000 people. As it is the hub of Chiriqui Province, David is a bustling hub where residents of the outlying towns frequent regularly to shop for supplies.
The best thing about David is its off-the-radar atmosphere, allowing residents to enjoy quiet living, proximity to nature, and first-world amenities. There are popular fast food restaurants and household brands all over, which help give off the feeling that you never really left home.
The town has a small international airport, as well as a marina on the coast. Other amenities include big-box retail stores, cultural and entertainment centers, a large multiplex theater, multiple healthcare facilities, car dealerships, malls, and extensive dining options.
Panama City
The country’s capital is one of the most progressive cities in all of Central America. Modern amenities, beautiful weather and natural scenery, endless career opportunities, and relatively affordable homes make it easy to see why foreigners from all over the world are attracted to Panama City, Panama real estate and living the rest of their lives here.
The city is bursting with things to do, with all the trappings one can expect from an international metropolis. It also has the only metrorail system in the region, making it easy to get around. Needless to say, if you want comfortable, cosmopolitan living minus the luxury budget,Panama City, Panama real estatedeserves your serious consideration.
Pedasi
Idyllic is the keyword in Pedasi, a charming beach town that is increasingly becoming a popular expat destination. As one would imagine, popular activities here are mostly beach-related – surfing, fishing, snorkeling, scuba diving, and even kitesurfing.
The community is small and close-knit, and the locals are friendly and courteous. With its sparse population, Pedasi can make you feel like you’re in an exclusive beach club. Aside from the beach, Pedasi also has a good number of wildlife refuges and national parks.
Though the properties here are still affordable, that doesn’t look to be the case very soon, as Pedasi’s popularity continues to grow and more tourists find their way here. It doesn’t have the amenities enjoyed by expats who own Boquete, Coronado, or Panama City, Panama real estate, but it is still close enough to everything you may need, as the cultural hub that is Las Tablas is just a 45-minute drive to the north.
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PURCHASING REAL ESTATE IN PANAMA AS AN EXPAT
The process of buying property in Panama for foreigners can be intricate, but it doesn’t have to be intimidating. Once you’ve identified your ideal location and property, follow these steps to begin the purchase of your very own expat Panama real estate.
Find a real estate agent who specializes in expat needs
First and foremost, seek the help of an experienced real estate agent who specializes in Panama real estate for retirees and expats. A good agent will know the properties on the market that suit you best and can identify the pros and cons of each property for you.Your agent can help with each step along the way, guiding you through negotiations and maximize your return on investment.
In Panama real estate agents must have a license to operate, so ensure that the agent you choose has a valid and active license.
Confirm the title
Your agent can check in the public registry to ensure that the property you’re buying has a clean title and that the seller is the registered owner of the property. If the title check reveals any issues, such as having liens, mortgages, or restrictions on it, best to delay the purchase of the property until the issues are taken care of, or forgo the purchase and look for another property altogether.
Make a serious offer
Your agent can give you an idea of current market values, which can be helpful in assessing if a property is reasonably priced. When you find a property you like, your agent can help you arrive at a good asking price for it. Once you’re settled on a number, your agent can then take your offer to the seller to negotiate until a deal is made.
Enter into a purchase agreement
After your agent has determined that the Panama real estate for expats that you wish to buy has a clean title, you can sign a purchase agreement that clearly outlines the terms and conditions of the transaction. A purchase agreement usually includes an inspection of the property and a re-surveyif the property hasn’t been surveyed in the last 10 years.
After the purchase agreement is signed, closing will then be scheduled. You will then have to pay the down payment to the seller, which is normally 10% of the asking price. At closing, you and the seller will then have to sign a final buy/sell contract.
Transfer the title
The Panamanian government usually collects a 2% tax to transfer a property’s title to the buyer, based on the property’s value according to the deed of sale.
The process will also incur other fees, which can vary depending on the size, type, and value of the property. Here are some of the common fees in US dollars during the transfer of title:
- Notary and public registry fees: $250 – $400
- Legal property transaction fee: $1,200 – $1,500
- Escrow transaction fee: $600 – $1,000
With the title transferred, the final form of the contract is then made and signed by all involved parties. It’s worth noting that Panama doesn’t require anyone to be present during the signing. Out-of-country buyers can e-sign their documents or authorize an attorney to sign in their place.
Transfer the funds
Payments for property purchases in Panama, including down payments, are usually done through an escrow account.
Buyers set up the escrow account in their home country or a local bank in Panama, which will then issue an “irrevocable letter of payment” to the seller informing them that they have the money and will release them when the terms of the contract are met.
Usually, the funds are transferred after the final contract is signed, but in some cases, the transfer is done after the property’s public deed is registered in the buyer’s name.
Register your purchase in the public registry
Your agent will file the record of your purchase in Panama City, after which the title transfer procedure can take place. This could take seven to 10 days.
The final deed will then be sent to your agent, who will then prepare your final documents and send them to you, along with your registered title deed.
Have your agent send a copy of the deed to the tax records department to make sure the property is truly yours.
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NEED-TO-KNOW FACTS ABOUT BUYING PROPERTY IN PANAMA FOR EXPATS
In Panama, foreign real estate buyers have the same rights as local buyers, but with a few restrictions, especially when it comes to waterfront and island property. Likewise, foreigners are not allowed to buy properties within a military zone or reservation for indigenous people.
Property taxes apply only to properties with a registered value of more than $30,000. Panama caps annual property tax at 2.1% for properties valued over $75,000.
The Panamanian government also charges title transfer taxes amounting to 2% of the asking price or the property value, whichever is higher. A short- and long-term capital gains tax is also applied.
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LET RED FROG BEACH HELP YOU EXPLORE PANAMA REAL ESTATE OPTIONS FOR EXPATS
If you have questions about buying Panama City, Panama real estate, Bocas del Toro, Panama real estate, and more, we at Red Frog Beach can assist you. From visa applications to choosing the right community and property, we have helped many expats like you find the right real estate solutions.
Please call our US office at 507.6951.6518 or our Panama office at 281.892.1344 for inquiries. You can also contact us here.
In the meantime, check out our available properties for sale in Panama
