Buying Panama Real Estate is a very atractive proposition because the country’s economy has grown by an average of 8% (GDP) in the last ten years, it has good political stability and it is strategically located located.
Currently Panama is in a market favorable to buyers and investors.
There is an inventory of properties in various areas of the city with prices adjusted downward and at the same time a constant flow of foreigners that guarantees a rental demand.
Life in the country is very comfortable and you can verify the process of real estate transactions that are executed daily, without any problems.
Other important aspects that may convince you and consider choosing Panama as an investment destination is that private property is protected in its constitution.
Real estate in Panama includes property titles that are validated in the Public Registry, and we highlight the fact that people of any nationality residing anywhere in the world can own properties in the country in their personal capacity or through legal entities. such as partnerships, limited liability companies, or private interest foundations.
Minimum requirements for buying Panama real estate.
According to the constitution, all foreigners have the right to acquire properties and only a passport is required as the minimum mandatory documentation.
It is not only advisable, but necessary, to hire a lawyer to carry out the entire investment procedure in real estate safely.
The final sale contract must be signed and registered in person in Panama before a public notary.
Therefore, the seller and buyer need to be physically in the country at the time of execution and if this is not possible, they also have the possibility of assigning powers of attorney to people who are in Panama.
If you have a corporation in Panama to be the owner of the real estate, it facilitates the purchase remotely.
Buying Panama Real Estate: Property Tax
Two tax rates were recently approved, reducing the rate to be paid annually, encouraging the purchase of properties for residence and investment.
The regular rate for second homes and commercial properties is:
Up to 30,000 0.00%
From 30,001 to 250,000 0.60%
From 250,001 to 500,000 0.80%
From 500,001 onwards 1.00%
The tax rate of the Tax Family Heritage rate which must be requested in compliance with Certain conditions are:
Up to 120,000 0.00%
From 120,000 to 700,000 0.50%
From 700,000 onwards 0.70%
The annual property tax is paid in three installments as follows:
1st. departure ——– April 30
2nd. departure ——- August 31
3rd. item ——- December 31
If the payment is made annually before February 28, the taxpayer may benefit from a discount of 10% of the total, this applies to both natural and legal persons.
In case of failure to pay the tax after the date of the corresponding item has expired, then the taxpayer will be subject to the payment of a 10% surcharge plus the corresponding interest according to what the law establishes.
Buying Panama Real Estate: expenses
Like any economic transaction, the purchase and sale of a property has costs for both contracting parties, which are relatively low compared to other countries in the region.
Payable by the seller:
- Real estate transfer tax, for transferring ownership of the property from one person or entity to another, corresponding to 2% of the sale value.
- Income tax for capital gains on the sale of real estate corresponding to 3% of the sale value.
- The other expenses generated by handing over the property peacefully.
- The real estate broker’s fees should you use one for the sale.
Payable by the buyer:
- The attorney’s fees for the preparation and endorsement of documents.
- The costs at a Circuit Notary’s Office to formalize the Deed of Sale.
- The expenses of registration in the Public Registry.
Panama Real Estate procedure to buy
Once you have chosen the property you want to buy, the steps are generally the following for all types of real estate transactions:
- The contracting parties sign a promise of sale agreement to withdraw the property from the market and agree on the terms, conditions, price and form of payment in the transaction.
- The seller must make the payment of transfer taxes and issue peace of mind to deliver the property free of accounts.
- A qualified lawyer in Panama must draw up the bill of sale and sign it. This document establishes that the property is transferred from the owner to the buyer.
- This bill of sale must be delivered to a Circuit Public Notary where the contracting parties sign and this institution formats it as a public deed.
- The already signed public deed is entered into the Public Registry for registration.
Panama is currently a real estate market favorable to buyers and investors.
The amount of inventory that exists and the constant flow of foreign people makes it ideal for the purchase of investment properties because:
- The low prices of properties in various areas of the city
- The demand that exists for rental properties.
In addition to being an excellent country for all types of investments, it is also a sophisticated place of retirement and establishment for all those who want to enjoy their retirement, since it offers comfort, exclusivity and living facilities in every way.
At Ferguson & Ferguson you have everything you need at your disposal and our team will be able to provide you with all the necessary help to obtain the necessary information regarding investments in Panama.