Are you considering purchasing property in Panama? Whether you’re looking for a vacation home, a retirement haven, or an investment opportunity, Panama offers compelling benefits for foreign buyers. With its strategic location, stable economy, and breathtaking landscapes, it’s no wonder this Central American gem continues to attract international investors.
Why Foreign Buyers Are Choosing Panama
Panama welcomes foreign investors with open arms, offering the same property rights to foreigners as to local citizens. The country has established over a dozen laws specifically designed to protect foreign investments, with private property protection enshrined in its constitution.
What makes Panama particularly attractive is its affordability. You can purchase highly desirable property for significantly less than comparable properties in the United States or Canada. Additionally, Panama offers diverse real estate options to suit every preference and budget—from luxurious high-rise apartments in Panama City to tropical beachfront condos and breezy mountain retreats in areas like Boquete.
Legal Rights for Foreign Buyers
As a foreigner buying property in Panama, you’ll enjoy:
- The same ownership rights as Panamanian citizens
- The ability to own property outright (“Fee Simple” ownership)
- No restrictions based on country of origin
- No requirement to be a resident or citizen
- No minimum investment requirement
However, there are some important restrictions to be aware of:
- Properties within 10 kilometers of international borders cannot be owned by foreigners
- The first 22 meters from the high-tide line on beaches is considered public domain
- Some coastal properties operate under a “Concession” or “Rights of Possession” system
Step-by-Step Buying Process
- Find your ideal property: Work with a reputable real estate agent who understands the local market. At Casa Solution, we have helped more than 1500 happy buyers to find their properties.
- Conduct due diligence: Hire a qualified attorney to perform a thorough title search and ensure the property is free of liens or encumbrances.
- Sign the promissory contract: Your attorney will prepare a “Promesa de Compraventa” (Promise to Purchase/Sell Contract) that outlines the terms of the sale. A deposit (typically 10% of the purchase price) is usually required at this stage.
Casa Solution, offers to prepare the initial promise to purchase and sell contract free of charge for both parties and their attorneys to review.
- Arrange financing: If needed, explore your financing options with Panamanian banks or directly with the owner. Interest rates typically range from 4% to 8% for a 20-year term.
- Final payment: The promissory buyer’s attorney will proceed to instruct the buyer to make the final payment will be made as agreed upon in the Promise to Purchase and Sale contract.
- Property Registration: The final contract (protocol) is submitted to the Public Registry for registration, a process that typically takes approximately two to three weeks.
Ownership is officially transferred once the registration is complete, at which point the property will be recorded in your name or the name of the entity you have designated to receive it.
Taxes and Closing Costs
When purchasing property in Panama, it’s important to be aware of the common fees involved:
For the Seller:
- Transfer Tax
- Capital Gains Tax
- Costs for Obtaining Closing Documentation
- Attorney’s Legal Fees
- Escrow Fees (if any)
For the Buyer:
- Notary and Registration Fees
- Attorney’s Legal Fees
- Bank fees to send and receive the funds
- Escrow Fees (if any)
Estimating these costs can be challenging, as they vary significantly depending on the specifics of the transaction. To avoid surprises, we highly recommend consulting your attorney for a detailed quote in advance.
This will help you plan accordingly and factor these expenses into your budget.
Popular Areas for Foreign Buyers
Panama offers various attractive locations for property investment:
- Panama City: The capital offers modern high-rise apartments and luxury condos, particularly in areas like Punta Pacifica and Costa del Este.
- Boquete: This mountain town is popular among retirees for its cool climate, coffee plantations, and expatriate community.
- Bocas del Toro: This stunning archipelago features breathtaking beaches and tropical landscapes, perfect for vacation homes and eco-resorts.
- Pacific Beaches – Chiriqui: Areas like Las Lajas and Las Olas/La Barqueta offer beautiful beachfront properties at competitive prices.
- Coronado: A well-established beach community popular among expats, featuring golf courses and modern amenities.
The Path to Residency Through Real Estate
Panama offers a pathway to residency through real estate investment via the Panama Friendly Nations Visa. By investing at least $300,000 in Panamanian real estate, eligible foreign nationals can gain temporary residency, which can be converted to permanent residency after two years. After five years of permanent residency, you can apply for citizenship, provided you meet other requirements such as basic Spanish proficiency.
Avoiding Common Pitfalls
To ensure a smooth property purchase in Panama:
- Work with professionals: Engage reputable real estate agents and qualified attorneys with experience in international transactions.
- Conduct thorough due diligence: Ensure the property has a clear title and understand its exact boundaries.
- Understand the property type: Know whether you’re buying titled property, right of possession land, or concession property.
- Get everything in writing: Don’t rely on verbal agreements or assurances.
- Exercise caution: When considering beachfront property by understanding the restrictions that apply to coastal areas. We will guide you through the due diligence process and help ensure you have the necessary information to make informed decisions.
Conclusion
Buying property in Panama offers foreign investors a unique opportunity to own a piece of paradise while potentially gaining residency in a country known for its economic stability and high quality of life. By understanding the legal framework, engaging qualified professionals, and conducting thorough due diligence, you can make a sound investment in this beautiful Central American nation.
Ready to find your perfect property in Panama? Contact Casa Solution today, and let our experienced team guide you through every step of your real estate journey.
“Casa Solution made what could have been a tedious, hair-raising ordeal, quite frankly… pleasant. The ‘gift’ early on was the encouragement to value the listing a full 100k above our perceived minimum. The typically awkward position of representing buyer and seller was played like a beautiful Texas country song!! Many continued successes to you all.” – Bob & Marie
