Property in Panama: buying, residency and support

Transfer tax (ITBI) is 2% and is paid by the seller; since September 2026 the first $120,000 of a first sale of a new home is exempt. Annual property tax starts at 0.5% for a primary home and 0.6% for other property, with a tax-free threshold. Foreign-source income is not taxed in Panama.

A buyer's closing costs are roughly 2–5% when paying cash and 3–7% with a mortgage (lawyer, notary, registration). The ITBI transfer tax is 2% of the higher of the price and the cadastral value and normally falls on the seller. Law 546 of 31 August 2026 (in force 1 September) exempts the first $120,000 from ITBI on a first sale of a new home and sets a reduced scale up to $200,000 (0.5% to 1.8%). Condition: the sale closes within two years of the occupancy permit. The seller pays capital gains tax: 3% of the higher value as an advance, or 10% of the net gain. Annual property tax on a primary home: the first $120,000 is exempt, then 0.5% up to $250,000 and 0.7% above. On other property: up to $30,000 exempt, 0.6% up to $250,000, 0.8% up to $500,000 and 1% above. It is paid in three instalments a year. New housing enjoys multi-year relief that depends on the type of property.

Six steps to buy. 1. Choose titled property. The registry records only titled property; rights of possession (ROP) are not recorded. 2. Sign a promise to buy and sell (promesa de compraventa) and pay a deposit, usually about 10%. 3. A lawyer checks the title, cadastral maps, tax payments, utility bills and encumbrances. 4. The public deed (escritura pública) is signed before a notary and funds move as the contract says. 5. The deed is registered at the Public Registry (Registro Público). 6. If you want residency, you apply for the investment certificate and then for residency status. A purchase typically takes 30–60 days.

Banks typically lend non-residents 50–70% of value for up to 15–20 years, with rates for foreigners indicatively 7–9%; approval takes 2–8 weeks after a full file.

The Qualified Investor programme (Executive Decree 17 of 8 September 2026, in force since 16 September) grants permanent residency at once, with no provisional status. Thresholds: $300,000 for new first-sale real estate and for a purchase promise on an off-plan project; $500,000 for secondary-market property, securities and a fixed-term deposit in a state bank; $750,000 for a deposit in a private bank. The investment must be held for five years and proven annually, and the funds must come from abroad. Processing takes about 15 business days for the investment certificate and 30 business days for residency. Citizenship by naturalization is possible five years after the permanent-residency decision, with Spanish, a history and civics test and presidential approval.

For an investor the market splits into city, resort and hotel property. Income earned in Panama is taxed on a progressive scale: 0% up to B/.11,000, 15% up to B/.50,000 and 25% above. Ask a Panamanian tax adviser how rent on your particular property is taxed. Project yields are always a forecast by the developer or operator. Ask for the management contract, its term, the fees and how income is calculated.

Title. Buy only titled property recorded in the Public Registry. Rights of possession (ROP) do not give ownership, cannot be mortgaged and have no central database. Off-plan purchases. For investment residency on an off-plan purchase under a purchase promise, 100% must be paid to the developer against an irrevocable bank guarantee for the full amount, or held in a trust. A normal schedule of a down payment and a balance at handover does not automatically meet that requirement. Valuation. The qualifying value is the lower of the price and a reasonable market value, net of encumbrances. A price just above the threshold can be valued below it. Keeping residency. The migration authority may cancel residency if you are absent from the country for more than two years without a justified, authorised reason. Rules change. The programme's threshold was revised in 2020, 2022, 2024 and 2026.