Panama’s proposed tax relief for buyers of newly built homes has become linked to a broader debate over how the country taxes digital transactions, including services and purchases made through platforms such as Netflix, Amazon, Uber and Airbnb.

On August 19, the National Assembly’s Economy and Finance Committee suspended first-debate discussion of Bill 661, which would restore an exemption from Panama’s 2% Real Estate Transfer Tax, known as ITBI, on the first $120,000 of the taxable value of qualifying new homes.

The committee is expected to consider the measure alongside a separate government proposal addressing taxation of the digital economy. Neither proposal is currently law.

Why the Two Measures Are Connected

The connection comes from Panama’s Constitution. Article 276 requires legislation that reduces revenue already incorporated into the national budget to establish a substitute source of revenue or increase another existing source.

The government is therefore looking to offset the revenue that could be lost through the housing incentive by improving ITBMS collection on certain digital transactions.

On August 18, the Cabinet approved proposal 30-26, which would modify Panama’s Fiscal Code and establish clearer rules for applying ITBMS to certain transactions involving foreign digital providers when the product or service is consumed in Panama.

The proposal covers areas such as online purchases, subscriptions and services provided through digital platforms.

Finance Minister Felipe Chapman has estimated that improved collection from digital transactions could generate more than $100 million annually. As of August 20, however, the measure had Cabinet approval but had not yet formally entered debate in the National Assembly.

What Bill 661 Could Mean for New-Home Buyers

For real estate buyers, Bill 661 could lower some of the transaction costs associated with purchasing newly constructed homes.

Under the proposal, the first $120,000 of the taxable value of a qualifying first sale of a new residence would be exempt from ITBI. For properties valued between $120,000 and $200,000, preferential rates ranging from 0.50% to 1.80% would apply to the portion above $120,000.

For homes above $200,000, the first $120,000 would remain exempt, while the amount above that threshold would generally return to the standard ITBI treatment.

The sale would also need to be completed within two years of the property’s occupancy permit to qualify.

If approved, the measure could make some newly built homes more attractive to buyers by reducing upfront acquisition costs. It could also give developers additional flexibility in price-sensitive segments of the market.

For now, however, current tax rules remain in effect. Buyers should not base their closing-cost calculations on the proposed exemption until the legislation is approved and the final rules are known.

What About Airbnb and Short-Term Rentals?

The digital tax proposal also has implications for property owners involved in short-term rentals.

Panama’s standard ITBMS rate for most taxable goods and services is 7%, while lodging and accommodation are currently subject to a 10% rate.

The government’s digital-economy proposal is intended to improve tax collection on transactions made through digital platforms, including accommodation booked through services such as Airbnb.

Exactly how the final legislation will apply to individual property owners, rental platforms and different types of short-term accommodation has not yet been settled. Separate discussions surrounding the regulation of short-term rentals are also taking place.

This is particularly relevant in vacation and investment markets such as Coronado, Bocas del Toro and Playa Venao, where rental income can be an important part of an investment property’s financial performance.

What Could This Mean for Panama Real Estate?

If Bill 661 passes substantially as proposed, the most direct effect would likely be felt in the new-construction market.

Lower transfer costs could improve affordability for some buyers and help support sales in residential developments where buyers closely compare upfront costs, financing requirements and monthly payments.

For short-term rental investors, the impact remains less certain. Owners should continue using conservative rental projections that account for taxes, platform fees, property management, maintenance and potential regulatory changes.

The key point for buyers and investors is that both measures are still being debated. The proposed housing exemption has not yet taken effect, and the final rules governing digital platforms and short-term accommodation could still change before becoming law.

Casa Solution Can Help

If you are considering a new home, vacation property or investment property in Panama, Casa Solution can help you evaluate property values, comparable sales, market conditions and the costs involved in purchasing real estate.

Contact our team to explore opportunities throughout Panama and make a more informed real estate decision.

Article written: August 21, 2026