Panama real property transfers involving persons considered to
be in the business of selling and/or buying real estate are
subject to the Panama capital gains tax. Such persons are
considered real estate dealers who sell 10 or more properties
within a year. Their Panama capital gains tax rate is 10% of the
realized gain from the sale. Prior to the recording of the deed,
the seller is required to pay the Panama tax office 3% of the
larger amount between the sales price and the recorded property
value as an advance of the Panama capital gains tax. Similar to
the sale of shares, the seller can claim this payment was in
excess of the actual Panama capital gains tax on the realized
gain and receive a tax credit on the difference. This tax credit
can be used to pay other taxes, be converted into cash by the
tax office, or transferred to the 3rd parties.
Panama capital gains tax rate is 3.75% of the larger amount of
the sales price or the registered value of the property.
Panama Real Estate
20 Year Property Tax Exoneration
All newly constructed residential buildings will be exempted
from paying property taxes for 20 years from the date of the
occupation permit. This exoneration only applies to the
improvements and not the land. Since the exoneration applies to
the property and not the owner, the remaining years will
continue with the property after it is sold. If the land is
worth more than $30,000 USD then the property tax will apply.
Note: If the property developer failed to file for the 20
year exoneration or if you purchase a newly constructed home
from the seller who did not file for the exoneration you must do
it yourself. Go to the Exonerations Department at the Ministry
of Economy with a copy of your public deed and apply for the tax
Panama Real Estate Taxes
Panama Real Property Tax applies to the value of the land and
all registered improvements which are not exonerated.
Here is a list of the Panama real estate tax rates:
The first $30,000 USD is
Between $30,000 up to $50,000
have a rate of 1.75%.
Between $50,000 and $75,000
have a rate of 1.95%; and
Everything over $75,000 have
a rate of 2.1%.
Alternative Progressive Rate
There is another alternative progressive rate which
applies to existing properties in good standing where the
taxpayer submits a sworn statement for a new value based on a
certified appraisal company.
Properties with occupancy permits issued before July 1, 2012
shall be taxed at this rate as long as the improvements were
filed at the Public Registry by July 1, 2011.
New construction with building permits issued after July 1, 2010
with improvements registered within one year after the issuance
of the occupancy permit qualify for this rate. Additionally, the
land value must be updated if it has been more than 5 years from
the time the improvements were registered.
This rate is 0% up to $30,000
for the land and improvement value; and
0.75% between $30,000 up to
From $100,000 on up the rate
Plots of land
where condominium buildings are incorporated as horizontal
properties with a condo owner's proportionate value in the
land not exceeding $30,000 will be at a 0% rate. Otherwise the
land will be taxed at a 1% rate.
Panama Real Property Transfer
Panama Real Property Transfer Tax is 2% of the greater of the
total value of the sale or the registered value plus the value
of the improvements plus 5% for each year since obtaining the
property and the sale.