Thinking of selling property in Panama to overseas investors? Panama is a popular destination for foreign investors, thanks to its stable economy, low taxes, and beautiful beaches. If you’re thinking about buying property in Panama, there are a few things you need to know.
1. Can foreigners buy property in Panama?
Yes, foreigners can buy property in Panama. There are no restrictions on the amount of land or property that a foreigner can own. However, there are a few things to keep in mind:
- Foreigners cannot own property in Panamanian military zones or indigenous reservations.
- Foreigners must obtain a foreign investment certificate (FIC) before they can buy property. The FIC is a relatively simple process and can be obtained through a Panamanian law firm.
- Foreigners must pay a 10% transfer tax on the purchase price of the property.
2. What are the benefits of buying property in Panama?
There are many benefits to buying property in Panama, including:
- Panama has a stable economy with low inflation.
- Panama has a low corporate tax rate of 25%.
- Panama has a double taxation treaty with the United States.
- Panama has a beautiful climate and stunning beaches.
- Panama is a convenient location for doing business in Latin America.
- Panama is a safe and welcoming country for foreigners.
3. What are the costs of buying property in Panama?
The cost of buying property in Panama varies depending on the location and type of property. However, you can expect to pay the following costs:
- Purchase price: The purchase price of the property is the most obvious cost.
- Transfer tax: A 10% transfer tax is due on the purchase price of the property.
- Legal fees: Legal fees for buying property in Panama range from 1% to 2% of the purchase price.
- Notary fees: Notary fees for buying property in Panama are around $1,000.
- Title insurance: Title insurance is not required in Panama, but it is a good idea to purchase it. Title insurance protects you from any defects in the title to the property.
- Property taxes: Property taxes in Panama are relatively low. The average property tax rate is around 0.5% of the assessed value of the property.
4. How to buy property in Panama?
The process of buying property in Panama is relatively simple. Here are the steps involved:
- Find a property that you want to buy. You can do this by searching online, working with a real estate agent, or visiting Panama yourself.
- Make an offer on the property. Your offer should be in writing and it should include the purchase price, the closing date, and any other terms that you agree on with the seller.
- Have the property inspected. It is important to have the property inspected by a qualified professional before you buy it. This will help you to identify any potential problems with the property.
- Obtain a foreign investment certificate (FIC). As mentioned above, all foreigners who want to buy property in Panama must obtain a FIC. The FIC is a relatively simple process and can be obtained through a Panamanian law firm.
- Pay the purchase price and transfer taxes. Once the FIC is approved, you will need to pay the purchase price of the property and the transfer tax.
- Register the property in your name. Once the purchase price and transfer taxes have been paid, you will need to register the property in your name. This can be done at the Public Registry of Panama.
5. What are the risks of buying property in Panama?
As with any investment, there are risks involved in buying property in Panama. Some of the risks that you should be aware of include:
- The property market in Panama is volatile. The value of property can go up and down, so it is important to do your research before you buy.
- There is a risk of fraud. There are a number of unscrupulous individuals who prey on foreigners who are looking to buy property in Panama. It is important to work with a reputable real estate agent and to do your due diligence before you buy.
- The legal system in Panama can be slow and inefficient. If you have a dispute with the seller or the developer, it can take a long time to resolve it through the courts.
6. Conclusion
Buying property in Panama can be a great investment. However, it is important to do your research and to understand the risks involved before you buy. If you are considering buying property in Panama, be sure to consult with a qualified real estate agent and a Panamanian attorney.
