property for sale
FAQ´s Panama
- Why should I invest in Panama?
- Who can purchase property in Panama?
- What about the political stability and security of Panama?
- Is it safe for foreigners to buy property in Panama?
- What are the procedures to buy real estate in Panama?
- How long does it normally take to purchase a property in Panama?
- Are there property taxes in Panama, if so, how much?
- Are their capital gains taxes on the sale of property in Panama?
- Are there inheritance taxes in Panama, whereby the Panamanian government would keep a certain percentage of my beneficiary's inheritance?
- Once I have applied for a retiree-visa in Panama, am I going to have certain advantages?
- What about Medical Attention in Panama?
- What kind of mega-projects are planned in Panama to boost the economy?
- Is there really going to be a "demographic explosion" in Panama?
- Are financing sources available for foreigners to get a mortgage in Panama?
- What documentation is normally required for foreigners obtain financing on property in Panama?
1) Why should I invest in Panama?
Panama is fast becoming one of the world's top retirement destinations and world class tourist location with an annual tourist rate of 280,000 people. Its landscape is really gorgeous with beautiful beaches and great surfing, kayaking and diving activities coupled with an exotic fauna. Panama has an interesting cultural background from Stone Age to the history of conquistadors, and now a modern society with an US style infrastructure.
2) Who can purchase property in Panama?
Any foreigner can own a property in Panama, under the same laws as if you were a Panamanian citizen. You can do it under your personal name, or under an established corporation. For financing the property, the process is very similar to the one in the US. Since the U.S. dollar as national currency in Panama, you will get the same financing rates as you would in the States. movewithus international will guide though all the process of acquiring the mortgage, from the time you buy until we deliver the property. Currently new properties have a 20 year exoneration period, were you don't have to pay any kind of property tax. This was established by the government as an incentive for national and foreign investments.
3) What about the political stability and security of Panama?
Panama is a Democratic Republic. After the removal of Manuel Noriega in 1989, Panama's economic growth has been a steady progression of investments and employment. As in Costa Rica, a national police has replaced the military. There is no political unrest. Since Panama is pursuing global investment and eco-tourism, foreigners are readily welcome. In fact, many new laws creating attractive incentives for the foreign investor have been recently passed. The culture is very similar to the U.S. Many of the same stores and restaurants, such as Sears, Price Costco, Bennigan's, TGIF, and others, have branches here. Many people have a big misconception about Panama in thinking it is a wild jungle with hammocks strung between coconut trees. Panama City is a thriving modern metropolis where you can get most anything you can in the states at a lesser price. Luxury items are readily available.
4) Is it safe for foreigners to buy property in Panama?
Absolutely, Panama has the highest rating for tourist safety from Pinkerton Intelligence Services and a low crime rate in general. One of the first things foreigners who live in Panama will tell you is how safe they feel. In Panama City petty street crimes that hinder tourists in other countries are uncommon. Panama City, like every big city has some districts best to avoid, but in general you can go about Panama City day and night without worrying. This is true for most of the country with few exceptions.
5) What are the procedures to buy real estate in Panama?
Once you have found a property you like, have your attorney prepare a Promise to Buy/Sell Contract to lock in the property sale and secure the terms agreed upon, plus this gives you time to do the due diligence and get your funds into the escrow account. Then the final closing is scheduled, where the buyer/seller sign the final Buy/Sell Contract. Consequently, payment is made to the seller, broker, and attorney from escrow (in some cases, buyers/sellers agree that payment is made after the public deed of the property is transferred and registered into the buyers name). Finally, the Buy/Sell Contract is registered at the Public Registry where they transfer the property title ownership from the previous owner to the new owner.
6) How long does it normally take to purchase a property in Panama?
The time frame from start to finish is usually about 6 weeks, however, it really depends on a variety of factors which depend initially on the buyer and the seller, the negotiation between buyer and seller, and subsequently dependent on the attorneys and the public registry.
Book your inspection trip now.
7) Are there property taxes in Panama, if so, how much?
Property taxes are only levied on properties that have a registered value of US$20,000 or more (registered value is the value stated on the public deed that is registered at the Public Registry). The maximum annual property tax is 2.10% of the registered value of the land (land value under US$20,000.00 is exempt of this particular tax, as per Law # 36 of 1995). Property tax is also levied on the declared value of the building improvements on the land, however, the laws in Panama offer tax exonerations for building improvements for up to 20 years (this was implemented by the Panamanian government to promote new construction, which makes up a large portion of Panama's overall GDP). New properties completed by 31st August 2006 will have a 20 year property tax exemption. Possession Rights properties do not incur property taxes, since the property technically belongs to the government of Panama.
8) Are there capital gains taxes on the sale of property in Panama?
Yes, the law stipulates a 30% capital gains tax on the sale of real estate in Panama.
9) Are there inheritance taxes in Panama, whereby the Panamanian government would keep a certain percentage of my beneficiary's inheritance?
Yes. If your assets are in your personal name, you could lose half of your properties to the Panamanian government upon your death, thanks to inheritance taxes. For this reason, we recommend that all of our clients put their properties into Panama corporations, and utilize a Panama Private Interest Foundation to hold the shares of each corporation, which enables them to distribute their assets to their beneficiaries, avoiding all inheritance taxes, probate, and legal delays. All assets would be distributed to your beneficiaries exactly as they were left, exactly as per your wishes (according to your letter of wishes), with no deductions whatsoever.
10) Once I have applied for a retiree-visa in Panama, am I going to have certain advantages?
As a qualified retiree in Panama, you will be entitled to:
Plus Panama's pensioned law stipulates that anyone entering the country as a qualified pensioner today is guaranteed that status as long as he chooses to stay in the country.
11) What about Medical Attention in Panama?
One of the major concerns we all face living overseas, is receiving proper medical Attention. Excellent medical service is available in Panama City. Panama City is only a three hour flight to Miami, it would be easy to return to the states for major Medicare treatments. Medical costs are far less than in the states. These costs are usually under what your normal deductibles would be anyway.
back to top
12) What kind of mega-projects are planned in Panama to boost the economy?
There are several mega-projects either already under construction, being planned, or contemplated. The project to clean up the Bay of Panama ($350 million), the expansion of the Panama Canal ($5.25 billion), the Central American refinery ($6.8 billion), and the "mega-port" at Farfan ($680 million). And here's the really sweet part - all of that money is going to be spent inside Panama, on the local economy. Local materials and manpower will be tapped out before anything substantial is imported. These projects will be pouring money into Panama for at least the next ten to fifteen years so the medium range future is very bright especially when cast together with the demographics.
13) Is there really going to be a "demographic explosion" in Panama?
Given the fact that our modern world is getting older, 150 million people in the United States, Europe and Canada are going to retire within the next 10 years. So far there have been about 80,000 visas issued for retirees in Panama. When we look at these numbers we don't wonder if there's too much construction going on, we wonder if there's enough.
14) Are financing sources available for foreigners to get a mortgage in Panama?
There are many banks in Panama that offer mortgages to foreigners. HSBC Bank, Scotia Bank, BAC International Bank, Banco Cuzcatlan (Panabank), Banistmo, Banco General, Bank Boston, BBVA Bank, Banco Continental, Credicorp Bank, Multi-credit Bank, Banco Nacional de Panama, and others.
15) What documentation is normally required for foreigners obtain financing on property in Panama?
Most banks in Panama that finance foreigners require the following documentation for the applicant(s) of the loan;
(1) complete photocopy of passport
(2) photocopy of one additional form of ID, such as a drivers license,
(3) two original financial reference letters,
(4) two original commercial, professional, or personal reference letters,
(5) photocopy of utility bill showing physical address,
(6) curriculum vitae
(7) last 2 years financial statements,
(8) last 2 years personal income tax returns,
(9) photocopy of property documentation (registered title deed & registered survey),
(10) original recent certificate of title deed from the Public Registry,
(11) appraisal on the property by an approved appraisal company.
back to top
