Acquiring property in Panama

There are two ways to acquire land or real estate in Panama: Purchase of titled land, or purchase of possessory rights and thereafter processing the titling with the corresponding Government entity. Any good attorney can walk you through the process of buying property and give you more details concerning the steps below.

In order to purchase titled land, it is generally recommended to follow these steps:

1. Legal background and encumbrances research is conducted at central Public Registry system of Panama (this is done by a lawyer). Because there is a central unified land registry system unlike the U.S., title insurance is not common in Panama.

2. Verification of the title of ownership authenticity as well as the legal validity of permits and authorizations issued by the corresponding Governmental entities regarding the property that is being sold/purchased.

3. Drafting or reviewing all related purchase agreements.

4. Drafting and notarizing the Closing Public Deed including the title of ownership transfer, corporate authorities and all other documents needed, as well as recording the same at the Public Registry Office.

In order to purchase possessory rights, the parties must sign a purchase agreement and thereafter process the titling before the National Land Administration entity (ANATI).

 

Tax Incentives for Foreign Retirees

It is recommended to consult with an attorney who understands the law when it comes to property tax incentives offered by the Panamanian government. Things are subject to change so the information below is a guided overview that is subject to change:

As of September 2006

All properties in which a permit has been issued from September 2006 and upon the registration of the improvements on the Public Register will be exempt as follows:

Property Value                                            Exemption Period

$ 100,000                                                    15 years

$ 100,000 – 250,000                                   10 years

$ 250,000                                                     5 years

As of July 2009

Those projects which a construction permit is issued before July 1, 2009 and the corresponding improvements have been registered at the Public Register before December 31, 2011 will be tax exempt for 20 years.

As of September 2011

Per current law, new construction properties can benefit from a tax exemption of 5 – 20 years, depending on the following:

  • Valid date of issuance of the construction permit
  • Demonstrable progress towards completion of the project
  • Value of the property
  • Relationship of the project to Panama’s tourism industry

In addition to new construction, Article 764 of the Panamanian Tax Code indicates additional properties which are exempt from property tax. These include:

  1. Properties registered at a value of $30,000 or less including improvements to the land
  2. Land used exclusively for farming and registered with the Ministry of Agriculture and Development as valued less than $150,000. The tax basis is comprised of the value of the land plus the improvement value.

You must present a copy of your public deed to the Exoneration's Department of the Ministry of Economy along with some other requirements in order to get a certification a formal application of the tax exemption.

 

 

This content does not promote, sell, endorse or recommend any investment advice or the sale of any asset or security. All information is subject to change without notice.