Real Estate Laws and Regulations in Panama

Updated Legal Framework: Law 284 of 2022 modernized the horizontal property regime in Panama, offering greater flexibility in property management and simplifying administrative and legal processes.

Construction Requirements and Permits: Developers must follow a detailed process of permits and approvals, including fire department reviews and municipal permits, which vary in cost.

Real Estate Financial Leasing Law: Law 8 of 2010 regulates financial leasing contracts, providing clarity and protection to the parties involved.

Benefits for Expatriates

Tourism Incentives: Panama offers special benefits and incentives for businesses related to the tourism sector, including the development of tourist properties.

Residence Visas: Panama's immigration laws are liberal, with over 15 types of immigration visas and permanent residence programs, making it easier for foreigners to reside in Panama.

Real Estate Investment Security

Investor Protection: Real estate investments in Panama are considered secure, with equal rights for both foreign investors and Panamanian citizens. Property titles are registered in the Public Registry, ensuring transparency and legal security.

Requirements for Residency in Panama

Minimum Investment: To qualify for permanent residency, foreign investors must invest a minimum of $300,000 USD in a property in Panama.

Tax Implications

Property Transfer Tax: When purchasing a property, a transfer tax of 2% is applied to the registered value of the property.

Capital Gains Tax: When selling a property, the seller must pay a 3% tax on the capital gains.

Property Tax: There are different property tax rates, depending on the value of the property. Newly constructed residential properties are exempt from property taxes for 20 years.

The buying, selling, and leasing of properties in Panama are subject to a set of specific laws and regulations that aim to modernize and simplify these processes, while offering protection and security to both buyers and sellers. Expatriates enjoy incentives and facilities for acquiring residency, and real estate investments are considered secure and protected by Panama's legal framework. Understanding these legal and tax aspects is crucial for any successful real estate investment in Panama.