Real Estate Purchase & Sale in Panama

Overview

Investing in Panama real estate is a simple process due to the Panama Public Registry, the government office responsible for managing all property titles. The process for purchasing real estate in Panama is similar to the process in the United States and most European countries.

On top of that, Panama real estate offers many opportunities due to its tax advantages, the financing opportunities available to both nationals and foreigners, and the capital appreciation that Panama real estate quickly gains.

This special-regime area has laws and regulations allowing local and foreign investors to establish companies in the area with the objectives of developing different kinds of activities and of promoting international trade, manufacturing and complimentary services.

Panamanian laws put local and foreign investors on equal grounds since there are no restrictions or exceptions to register a title deed. Properties can be registered under the name of a natural person or a legal entity, whether local or foreign. This means that it is not necessary to be a Panamanian resident to own Panamanian real estate.

There are some differences between locals and foreigners when it comes to financing terms. For example, Panamanians are required to provide a 10% down payment, while foreigners usually must meet 30% down payment and provide additional documentation to demonstrate financial solvency.

Panama also has many cases of Rights of Possession properties. This situation occurs when land is legally owned, but the owner does not have a title deed. Panamanian law allows this situation, where private documents are sufficient proof to justify real estate ownership that has no title.

Rights of Possession property is exempt from property taxes because it is not found in the Public Registry. These types of properties can also be passed down from one generation to another, and can be used to sell to third parties, whether national or foreigners.

However, it is also important to mention that prices for property in Rights of Possession are usually lower than market price because the property has no title registered in the Public Registry, which represents a higher investment risk.

Kraemer & Kraemer recommends the assistance of a lawyer to perform due diligence on your real estate transaction, to assist with the draft purchase-and-sale agreement, and to assist in the transaction closing process.