Panama Real Estate Law

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