Financials & Taxes in Panama
- Select Panama Real Estate staff writer
- Dec 5
- 2 min read
The Wallet Watch: A Guide to Panama Real Estate Taxes and Hidden Costs
The price tag on the listing isn't the final number. As you plan your move Financials & Taxes in Panama are an important concern, you need a clear expat guide to Panama real estate costs. The good news? Panama is a tax haven in many ways, and property taxes are surprisingly low compared to the US or Europe.
Here is the breakdown of what you will actually pay when you close the deal.
1. Closing Costs (The Buyer’s Burden)
When you sit down to sign, expect to pay roughly 2% to 2.5% of the purchase price in closing costs. This generally covers:
Legal Fees: Typically 1% - 1.5% of the transaction value.
Notary & Registry Fees: A few hundred dollars to stamp and record documents.
Escrow Fees: A small percentage or flat fee to hold the funds safely.
2. Property Taxes: The "Primary Residence" Loophole
This is where Panama shines. Panama real estate taxes act differently depending on whether you live there or rent it out.
Family Patrimony (Patrimonio Familiar): If you register the property as your primary residence, you pay 0% tax on the first $120,000 of the value.
The Rates:
$0 - $120,000: Exempt
$120,001 - $700,000: 0.5%
Over $700,000: 0.7%
Compare that to the 2%+ property tax rates in many US states!
3. Transfer Tax (The Seller’s Burden)
Usually, the seller pays the transfer tax (2%) and capital gains tax (3%). However, verify this in your offer letter. Sometimes in a "buyer's market," a seller might try to negotiate for you to cover some closing fees, but legally, the tax obligation falls on them.
4. Maintenance (HOA Fees)
In Panama, these are called Cuotas de Mantenimiento. In a high-rise in Panama City, you might pay $2-$3 per square meter. In rural gated communities, it is much lower. These fees often include gas, water, security, and usage of those stunning infinity pools.
Pro Tip: Always ask to see the "Paz y Salvo" (peace and safety) for both IDAAN (water) and the HOA before buying. You don't want to inherit the previous owner's unpaid bills!
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