With its dazzling beaches, crystal-clear waters, and ever-present sunshine, Bocas del Toro is every bit a tropical paradise.
In addition to miles of sparkling coastline, this sun-drenched province is also known for its vibrant culture, rich wildlife, and untouched natural beauty, all of which have led to its reputation as one of the most beautiful destinations in Panama.
Bocas del Toro-literally “Mouths of the Bull”-is also one of the most isolated areas in Panama, given its location between the Caribbean and the forested slopes of the Cordillera Talamanca.
Because of its inherent unspoiled beauty and the privacy it offers, the province has become highly in-demand among foreign investors.
Before packing your bags and heading to Bocas del Toro, however, take the time to read through our guide, which answers the most frequently asked questions about this highly desirable location and how to invest in real estate here.
Are foreigners allowed to own real estate in Bocas del Toro?
Panama, just like several other countries in the Caribbean, allows foreigners to invest in real estate property, provided they follow certain regulations.
Real estate is widely available for purchase, as long as it is not located within a military zone or a reservation for indigenous people. Foreigners are also barred from buying properties that are located less than 10 kilometers from Panama’s borders-including island properties.
In addition, owning property in Panama may make you eligible for a Permanent Resident status under Executive Decree No. 722, but your investment must be worth at least $200,000.
What is the procedure for buying real estate in Bocas del Toro?
If you’re interested in a Bocas del Toro property for sale, here are the steps you need to take, as well as some essential tips to have a stress-free experience:
- Hire a lawyer
Before looking into available homes in Bocas del Toro and other Carribean real estate, it’s highly advisable to first hire a lawyer who can help you find your way around the Panamanian housing market. Real estate transactions in Panama can be complicated, given that the Panamanian government recognizes three different types of real properties: Titled, Rights of Possession, and Concessions. Each of these requires different processes.
Moreover, legal documents in Panama are in Spanish, and if you’re not adept at the language, you will need the services of a bilingual lawyer who can help you parse through various contracts, as well as ensure that your purchase is secure and your rights are protected.
Make sure to work with reputable lawyers who are highly experienced in real estate transactions. We recommend Carmen Vicentes LLM, a Socia Principal or Main Partner at Vicente Serrano & Asociados. Her contact details are as follows:
- Verify the property’s title
Once you find a Bocas del Toro property for sale that matches your needs, one of the first things you should do is to check whether it has a valid title. The seller can do this by providing you with 2 documents, namely the public deed or escritura, and the Ownership and Encumbrances Certificate, or Certificado de Registro Público, which is issued by the Public Registry or the Registro Público.
If the seller cannot provide these documents, ask for the assigned property or finca number, which you and your lawyer can then use to search for the title.
Once you have verified that the property has a valid title, go to the Public Registry and ask for an updated version of theCertificado de Registro Público. This will allow you to see if there are any liens and other encumbrances attached to the property.
- Request a survey
After verifying that the land’s title is clear, the next step is to hire a licensed surveyor to conduct a survey of the property. This will help you determine property lines, as well as map out the property’s features. It is particularly important if you are purchasing undeveloped land.
- Transfer the title
When you are ready to finalize the purchase, ask your real estate agent and lawyer to draft the final purchase and sale contract. You will then submit this to a Notary Public, along with the old title, all previous land documents, and the new tax form.
- Pay for the property
There are several methods to choose from when paying for Bocas del Toro properties for sale, each of which has its own set of advantages and disadvantages. These are the most common methods:
- Cash payments. The most popular method in Panama by far is paying in cash as this is relatively easy and can be done in the presence of a Notary.
- Payment via check, money order, or wire transfer. Much like paying in cash, this method is also popular among investors as it is quite fast and simple, and does not require any currency exchanges. Simply present the check or money order to the Notary once the transaction has been completed.
- Mortgage financing. This payment method is widely available to both locals and foreign nationals, but most banks require foreigners to at least be a permanent resident. Unlike in North America, eligibility for a loan is based on the applicant’s ability to pay rather than their credit history. While loan terms and requirements may vary from one lender to another, generally, foreigners need to put up a 30% down payment and are granted a maximum of 30 years in loan terms.
- Record your purchase at the Public Registry
Unlike in the US, your purchase is not considered final until you file it at Panama’s Public Registry. Do this as soon as possible since it could take anywhere from 10 days to a few weeks before you can receive a signed and stamped title for your newly-purchased property.
The Notary Public will then create the new title with your name, and include essential details such as the name of the seller, a description of the property, and the property’s location. Upon the title’s approval, you and the seller will then sign the document as a precursor to paying for the property.
Do I have to pay real estate taxes and closing fees in Bocas del Toro?
As with Panamanian residents, foreigners are required to pay taxes and other fees in Bocas del Toro. In a real estate transaction, some of the fees you, as the buyer, will likely shoulder include:
- Notarial Fees
- Public Registry Fees
- Real Estate Transfer Tax
These fees may vary based on several factors. For instance, the notarial fees will be based on the length of the sale deed, whereas the public registry fees usually amount to approximately 0.3% of the sale price. Real estate transfer tax, on the other hand, is typically rated at 2% of either the value agreed upon in the deed of sale or the property value, whichever is greater.
What are the financing options for real estate buyers in Bocas del Toro?
Financing your real estate purchase in Bocas del Toro-and other locations in Panama, for that matter-is usually done using traditional fixed-rate mortgages.
One of the key things that make investing in Bocas del Toro extremely attractive is the relatively easy way with which one can secure financing. For instance, Panamanian banks have started to loosen restrictions on lending to both locals and foreigners over the past ten years, with non-residents aged 50 and below currently eligible for financing of up to 70% of the purchase price for a maximum duration of 25 years.
The interest rates for these loans will depend on several factors, such as the type of property being bought, the property’s loan-to-value (LTV) ratio, the age and financial situation of the applicant, and the loan period, among others.
When filing for a loan in Panama, make sure to submit the following documents:
- Completed and signed mortgage application
- Photocopy of your current and unexpired passport
- Photocopy of one additional photo ID
- Credit report from your country of residence
- Utility bill with your full name and complete address
- A complete resume, with your work and personal education background
- Two original bank reference letters
- Two original reference letters from commercial and professional sources
- A letter explaining your income sources and reason for the purchase
- Tax returns in the last two years
- Proof of immigration status
- Appraisal of the property from a bank-authorized appraiser
- The title deed of the property from Panama’s Public Registry
- Receipt of the purchase contract and proof of any down payment made
What should I avoid doing when buying real estate in Bocas del Toro?
As with any other transaction, there are certain things to avoid when buying Bocas del Toro real estate, all of which could lead to expensive losses and other problems.
Here are some of them:
Buying without working with a Realtor
It is totally possible and legal for buyers to buy their dream properties without hiring a Realtor or agent. However, this can make you vulnerable to a host of potentially expensive problems such as faulty contracts and scam jobs, among others, particularly when you are not a local resident.
Not shopping around
While it can get very tempting to buy the first house or property that catches your attention, doing this puts you at risk of falling victim to overpricing, among other things. Draw up a list of properties that you like then schedule a visit to each one so you can widen your choices and increase your chances of finding properties that are more in line with your needs and preferences.
Buying property without due diligence
Buying a property without conducting due diligence is one of the biggest mistakes an investor can make. Due diligence can uncover problems that may not be immediately apparent with a property, such as unpaid real property taxes and pending ownership and other legal issues.
Not preparing for additional expenses
Buying a house is a major financial investment, more so when it’s in a foreign location like Panama. Some buyers, however-mostly first-timers-save up only for the needed down payment, and are put at a loss once they realize the full extent of expenses that they have to cover. Take the time to read about the taxes and fees involved in the home buying process to avoid unpleasant surprises when the final bill comes in.
Buying property without going through the proper legal paperwork
A Bocas del Toro property for sale is a highly secure investment, but only if you go through the process legally and with all the needed paperwork. Some buyers, unfortunately, make the mistake of buying properties without consulting their lawyers, leading to painful legal and financial troubles. You can avoid this by hiring a competent lawyer and real estate agent who can help sort things out for you and provide you with much needed guidance before you enter into any agreement with the seller.
Building without permits. Just because you bought a piece of land doesn’t mean you can build structures on it anytime you want. This is especially true for properties in undeveloped areas, where investors are required to conduct studies and surveys before they can be granted permits for construction. As a result, many foreign investors-especially those who are in a bit of a rush to settle-opt to buy pre-existing homes, condos, and villas, as these can spare them the added trouble of filing for building permits.
What are the best areas to buy real estate in Bocas del Toro?
Located just 10 minutes from Bocas del Toro, Isla Bastimentos is famous for its palm-fringed beaches, mangrove thickets, and coral reefs, all of which serve as home to amazing wildlife. Aside from being a tropical wonderland, Isla Bastimentos is also home to several upscale resort towns, including the gorgeous Red Frog Beach, making it one of the most in-demand locations in the Bocas del Toro region.
The most populated island in all of Bocas del Toro, Isla Colon is home to a good selection of amenities, such as schools, restaurants, markets, and ATMs. It is also located quite close to the airport-a boon for jetsetting investors who might need to travel in and out of the country on a regular basis. Isla Colon also has numerous diving and surfing spots, including Playa Estrella, a protected eco-tourism destination that serves as a sanctuary for amazing marine wildlife and a hub for authentic Afro-Caribbean handicrafts and food.
Those who want to experience a more tranquil and laidback lifestyle may want to check out the neighborhoods in Isla Solarte. Formerly known as Nancy’s Cay, Isla Solarte provides a unique way of life where tropical forests, hiking trails, and hip eco destinations take the place of pubs and restaurants.
Invest in your very own Bocas del Toro home at Red Frog Beach Resort
In the market for gorgeous Bocas del Toro properties? Start your search at Red Frog Beach Resort. A Bocas del Toro gem, Red Frog Beach Resort provides a variety of real estate options for interested buyers, each providing breathtaking ocean and nature views and all the perks of luxury island living.
Red Frog Beach Resort boasts exquisite features, including five miles of beaches, eight miles of rainforest trails, a private beach club, a full service IGY Marina, an island spa, and an island grocery, among others. It was awarded a Green Globe Certification, and has been featured in Forbes, The Washington Post, and the World Property Journal.
See amazing real estate properties in beautiful Bocas del Toro. Set an appointment today by calling our U.S. office at 281.892.1344 or our Panama office at 507.6951.6518. You can also email our team of experts at realestate(at)redfrogbeach(dotted)com for additional details.