Property Tax in Panama

An overview of the taxes levied on the purchase of real estate in Panama...

Property taxes in Panama are charged at between 1.75 percent and 2.10 percent of the registered value of the property. There are numerous property tax exemptions but these apply to the value of the construction only - the land may still be subject to tax.

Properties valued at $30,000 or less (including land value) have a zero percent tax rate. The 2.10 percent band is reached at $75,000.

The maximum annual percentage of assessment of 2.10 percent is based upon two criteria:

  1. The value of the land
  2. The declared value of the improvements built

The taxable base depends on the total value of the land and all improvements. If a home is sold for more than its appraisal value, then the new value becomes the selling price for tax purposes.

Taxes can be paid in installments three times a year; at the end of April, August and December. Certification of tax clearance is necessary for the completion of any real estate transaction regarding a property. Property taxes have primary status over any other encumbrances.

Property tax exemption

If a property in Panama was bought before 2009, the taxes are not due for 20 years. However, many of the newer construction projects in Panama still fall under the 20-year exemption, and there are new, shorter exemptions in place for future construction.

In the future, property tax exemptions will be based on a new scale:

  • Up to $100,000 value, 15 years exemption
  • From $100,000 to $250,000, 10 years exemption
  • Value above $250,000, 5 years exemption

Commercial properties are exempt from property taxes for 10 years.

  • For more details on property tax exemptions and other fees levied on buying a house or apartment, see Property Taxes in Panama