Panama Real Estate Law

The laws of real estate vary from one nation to the next. It is always important to acquaint yourself with these rules prior to shopping for a new home or you might end up buying something you don’t end up owning.

In Panama, there are actually two different kinds of property ownership. The first is one that U.S., Canadian, and most European buyers will be familiar with.

Called “Titled Property” or “Propiedad Titulada”, this form of ownership works as the name implies. The owner of a property is recorded on a title and this is filed in the Panamanian Public Registry Office. This agency maintains all property records for the nine provinces of Panama.

Purchasing Titled Property should be accomplished in steps. The first of these is the completion of a Promise to Purchase Agreement. This step allows time for the buyer to work through their due diligence on the property. When pursuing this step, make sure to retain professionals and remember that title insurances is always cheap no matter what the cost.

When you have done your homework, you will enter into a Purchase and Sale Agreement. Unlike many other countries, your payment for the property will generally be held in escrow until the Public Deed reflecting your ownership is filed at the Public Registry.

Another common form of real estate ownership in Panama is called “Rights of Possession” or “Derechos Posesorios”. You will run across quite a lot this in Panama’s more rural areas. A Rights of Possession property is actually owned by the local or national government. You don’t actually buy this land, you essentially lease the it under a defined set of parameters for a fixed period of time. When dealing with this form of ownership, you will want to perform an extraordinary level of due diligence to insure that the term of your plans, and every aspect of your intended use are within the guidelines of your land use agreement.

If you are thinking about retiring in Panama or just visiting to develop an asset protection, business, banking, or investment strategy, make sure to begin by building a strong relationship with a local attorney. There are many third party sources able to help you select the best one for your needs. These groups provide unbiased reviews of providers in Panama’s professional community speeding you to a successful pairing.

For more information on retirement, banking, estate management, taxation, employment, forming a Panamanian foundation or corporation, real estate, trade policy, local economics, vessel registration, obtaining legal counsel, or any other topic related to doing business in Panama… click here

Thanks to a very pro-immigration and pro-investment government, one of Panama’s easiest to understand property tax schedules begins and ends with a zero!

In certain instances, you can purchase property in Panama that has been approved for a 20 year exemption from all property tax.

The statutes allowing this remarkable concession were recently extended, but not all properties qualify. Make sure to ask your real estate agent and confirm their finding with your Panamanian attorney.

If the house you have grown fond of doesn’t qualify for the tax abatement, take heart. In some instances, purchasing a property that is subject to taxes makes sense, as those with the 20 year exemption tend to be priced higher. You should also check to see how many years of the exemption remain. If a lower priced property affords savings that exceed the estimated total of your taxes during a comparable period, you might want to consider going with the lower price.

To estimate you tax bill, all you need to know is the “Registered” or “Assessed” value of the home. The annual tax total on a property is arrived at by calculating the total due in each applicable tax bracket, then summing the results. This whole process begins at $30,000 of Registered value. No tax is due until a property reaches that value.

For example, if you were calculating the taxes on a $100,000 house, your tax bill would be calculated this way.

Tax on $0 to $30,000 of value = Zero X Zero or $0.00

Tax on $30 to $50K of value= ($20,000 x 1.75%) or $350.00

Tax on $50 to $75K of value= ($25,000 x 1.95%) or $487.50 , plus

Tax on $75 to $100K of value= ($25,000 x 2.10%) or $525.00

Add the totals from each bracket and you have an annual Property Tax of $1,362.50

There are some other factors to consider, but for the most part calculating your local property taxes in Panama is this easy.

If you are considering the purchase of a vacation or retirement home in Panama, make sure to position yourself in a tax positive way. To do this you will need some help from a local attorney. If you want to insure that you make the right choice in local counsel, contact one of the many third party sources able to provide you with unbiased reviews of individuals and firms.

For more information on buying or renting real estate, forming a Panamanian foundation or corporation, employment, banking, trade policy, corporations, tax benefits, local economics, vessel registration, obtaining legal counsel, or any other topic related to doing business in Panama click here

Panama has a number of laws and incentives in place to attract and protect real estate investment by foreigners. In general, foreigners are allowed by law to own real estate in Panama, with few restrictions, and acquiring property is a largely painless affair.

However, any foreigner (or national, for that matter) considering a real estate purchase in Panama should enlist a legal representative to perform due diligence on the property and oversee the details of the transaction, to ensure there are no unpleasant surprises down the road. Read the rest of this entry »

Making the choice to buy real estate in Panama is a decision that should not be taken lightly. There are many issues and backhanded business practices that you need to make sure you know exactly what you are getting into and what you thoroughly need to look into that you might normally take for granted if you come from a more westernized country. Even working toilets are a commodity here that you would need to explicitly address if you expect to have one in your home, and that is just beginning to touch on the things you need to be aware of.You would not accept less than your standard requirements anywhere else, do not here. A little bit of knowledge regarding how the Panama real estate business directory will help you immensely.

Real estate law is difficult to understand for non-natives and there are many easy ways you can be taken advantage with if you do not understand the way the law is structured in Panama. Making a simple mistake by employing the wrong lawyer can mean a bad deal if you are not careful since lawyers into buying property for more than it’s worth without the amenities you expected to be present. Read the rest of this entry »