Saturday, April 05, 2008

Panama real estate taxes

Transfer tax must be paid by by seller at the moment of transfer of the property.

A 2% real estate transfer tax is levied on the transfer of real estate based either upon (1) the sale price stated in the official purchase/sale document (sale contract) or (2) upon the official property value, which ever is higher.

The taxpayer may choose to pay either (1) the 2% real estate transfer tax over the greater of the purchase price of the property or the oficial property value, increased by 5% per year of tenancy, or (2) to pay income tax at a 10% rate based upon the assessment value plus a 10% increase for each year of tenancy. If the taxpayer chooses this second option, no further taxes on capital gains on the transaction are levied.

Sale of a new residential property is exempt from this tax if the buyer uses it as a personal residency.

The real estate transfer tax can be offset as a direct credit against the income tax levied on a capital gain arising from the sale, if any.

Income on capital gains resulting from the sale of real estate is taxed in full and on a separate basis regardless of whether the company or the individual had a net taxable income or a net operating loss.

Real Estate or Property Tax

All land and real estate improvements thereon located in Panama are subject to real estate taxes.

Real Estate tax is appraised by an agency of the Ministry of Economics and Finance. It must be paid according to the official assesment value, which is usually the declared value on the sale document.

The maximum annual percentage of assessment is 2.10% which is based upon two items: (a) over the value of the land, and (b) over the declared value of the improvements built.

The taxable base will depend upon the total value of the land plus all improvements. Real estate transactions at prices of more than the appraisal value will automatically increase the value of said properties for tax purposes. Certain properties and improvements thereon are exempt or can obtain exemptions from real estate taxes according to special incentive tax laws.

Real Estate Properties with assessed official values of less than US$30,000.00 are exempt from taxes. Real estate taxes have priority over all incumberances on the property.

Taxes can be paid in three installments, namely by April 30th, August 31st, and December 31st.

A tax clearance certificate must be obtained before any real estate transaction can be completed and will be required by the Panamanian Public Registry Office for any transaction regarding the property.


das said...

In addition to real estate and tourism, Panama is known worldwide as a financial hub, often referred to as "the Switzerland of Latin America". With over 100 licensed financial institutions to choose from and extremely rigid privacy laws, Panama is an offshore banking haven and offers many advantages and incentives to foreigners thinking about estate planning and asset protection. Panamanian corporate law offers many legal structures to facilitate such effective financial and estate planning.
This Central American country has won numerous awards for being the world’s number one retirement and second home destination, with lucrative opportunities for investment property, vacation and retirement homes.




Anonymous said...

Thanks were a beverly hills real estate blog that caters to blog readers in cheviot hills and beverly hills. So thanks and well pass on out our senior club too, to read your blog,Beverly Hills Real Estate.

Patrick said...

This sounds really interesting. I haven’t heard about anything like this previously. I have huge interest in real estate. Thanks

1800 Club Condos

Patrick said...

Very interesting Real estate blog. Hope it will always be alive! Thanks for this..
How to Sell House

pjeary said...

I admit, I have not been on this real estate blog in a long time… however it was another joy to see it is such an important topic and ignored by so many, even
professionals. I thank you to help making people more aware of possible issues.
Great stuff as usual….

Click here for : Miramar Homes

Patrick said...

Great Post! I find your blog very helpful for real estate and I am sure others do as well. Keep up the good work!

Click here for : Homes Sunny Isles Beach for Sale

Mattis said...

You can also read more about selling real estate in US. Thanks for the article - very good.

davelindhl said...

it may be nice blog and paname real estate taxes may be very useful to us.nice thoughts to share with us.
dave lindahl

toffelnigar said...

When purchasing or selling property such as south florida real estate, the selection of your Real Estate professional is of paramount importance. Discover the south florida real estate difference by working with one of our knowledgeable associates specially trained in markets like south florida homes and Key of south florida real estate; they will provide you with expert advice.

Andrea said...

Panama Properties for Rent & Sale

Credit Loan said...

My Brothers and Sister all over the world, I am Mrs Boo Wheat from Canada ; i was in need of loan some month ago. i needed a loan to open my restaurant and bar, when one of my long time business partner introduce me to this good and trustful loan lender DR PURVA PIUS that help me out with a loan, and is interest rate is very low , thank God today. I am now a successful business woman, and I became useful. In the life of others, I now hold a restaurant and bar. And about 30 workers, thank GOD for my life I am leaving well today a happy father with three kids, thanks to you DR PURVA PIUS Now I can take care of my lovely family, i can now pay my bill. I am now the bread winner of my family. If you are look for a trustful and reliable loan leader. You can Email him via,mail ( Please tell him Mrs Boo Wheat from Canada introduce you to him. THANKS