Buying Real Estate In Panama: What You Need To Know

With a large English speaking population, low taxes and a favorable package of benefits and discounts for non-resident retirees, Panama is an attractive and affordable option for foreign …

With a large English speaking population, low taxes and a favorable package of benefits and discounts for non-resident retirees, Panama is an attractive and affordable option for foreign buyers. Although transparency and standardization in the real estate market has improved since 1989, it is still recommended that buyers engage a reputable independent attorney in Panama to help ensure a smooth, fair and legitimate purchase process. The following article from International Property Journal explains what you should know when buying property in Panama.

On many levels, Panama is a relatively easy country for international buyers. While Spanish is the native language, English is widely spoken and the dollar is the accepted currency for international deals. And thanks to the Canal, which is undergoing a massive expansion—as well as the country’s status as a favorite offshore tax haven–Panama will always attract an array of foreign investments.

For many residential buyers, the most attractive element is a package of deals and discounts for non-resident retirees, known as the pensionado. Anyone who can prove they are retired and living on a pension is eligible for discounts on everything from air fare to restaurants, as well as access to health care and resident status.

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Panama is also renowned for its low taxes. International buyers of new properties are typically exempt from property taxes for 20 years. Only Panama-generated revenue is taxed. And there are special programs in designated tourism zones to excuse income taxes on rental revenue.

The downside is Panama’s roller coaster history of revolving governments and policies. Since the U.S. government helped topple dictator Manuel Noriega in 1989, the country has been relatively stable and calm, with a welcoming attitude toward foreign investment. Panama president Ricardo Martinelli, elected in 2009, is known as a savvy businessman, who has talked about improving transparency and developing measures to increase foreign investment.

IPJ Tips:

  • It’s essential to use a reputable, independent attorney who can guide the transaction, including investigating the title and registering the final deal with the Public Registry.
  • When clear title is not available, some properties are sold using “rights of possession,” which gives the buyer control over the property. But “rights of possession” is a huge red flag for any deal. Even in legitimate deals, rights can be challenged in complex systems, which can be abused by scammers.
  • Don’t expect the courts to help. The Panama judicial system is a notorious, unwelcoming labyrinth for foreigners. Quick and simple resolutions are rare unless you are represented by Panamanian interests.
  • Agent commissions are typically three to five percent of the sales price and the country’s agent group, ACOBIR, is moving to bring standards inline with the rest of the world.
  • Many choose to buy through a Panamanian corporation, which offers tax, inheritance and security benefits. However, it also adds layers of complexities. “This is not necessarily some Machiavellian tactic reserved for shady criminals,” one online commentator notes. “It is more of a mainstream loophole that will benefit almost anyone who uses it, including shady criminals.”
  • Buy/Sell contracts are usually in Spanish, but should include an English translation.  And be warned: Due to the vagaries in translation the English version may not always be interpreted the same as the version in Spanish.

This article has been republished from International Property Journal. You can also view this article at
International Property Journal, an international property news and information site.


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