How to buy land in Panama (guide)

Authored by the expert who managed and guided the team behind the Panama Property Pack

Everything you need to know before buying real estate is included in our Panama Property Pack

Who is the author of this content?

THE LATINVESTOR

A team specialized in real estate investing in LATAM countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Panama. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At The LatinvestOR, we explore the Panamanian real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Panama City, Coronado, and Boquete. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What kinds of land can foreigners legally buy in Panama, and what kinds are restricted?

Foreigners can legally purchase titled land in Panama with the same ownership rights as Panamanian citizens across most property types and locations.

You can buy residential land for homes, commercial plots for businesses, agricultural land for farming, urban lots in cities, rural properties in the countryside, beachfront land beyond the 22-meter public zone, and even some islands with proper government concessions. The key requirement is that the land must have a clear title registered in the Public Registry with a verified Finca number.

However, several restrictions apply to foreign land ownership in Panama. You cannot purchase land within 10 kilometers of the borders with Costa Rica or Colombia due to national security regulations. The first 22 meters from the high-tide line on all beaches remain public property and cannot be privately owned by anyone, including Panamanian citizens. Indigenous reservations and military zones are completely off-limits to foreign ownership.

Most importantly, avoid untitled land known as "Right of Possession" (ROP) properties, which carry significant legal risks and are not recommended for foreigners. Some islands and marine zones may require special government concessions rather than outright ownership, which involves additional bureaucratic processes.

It's something we develop in our Panama property pack.

Where do foreigners usually buy land in Panama, and why are those areas popular?

Foreign land buyers typically concentrate their purchases in six main regions that offer distinct advantages for different investment goals and lifestyle preferences.

Panama City attracts investors seeking urban lifestyle and business opportunities, with foreigners purchasing commercial lots and residential land for high-end developments. The capital city serves as the business hub with modern infrastructure, international schools, and healthcare facilities that appeal to relocating professionals and families.

Coronado and the Pacific Beach corridor remain the top choice for vacation home buyers and rental property investors. This region features established expat communities, golf courses, beach resorts, and well-developed infrastructure that makes it ideal for those seeking a beachfront lifestyle with modern amenities.

Boquete and Volcán in the mountain regions attract retirees and lifestyle buyers due to their cooler climate, scenic mountain views, and lower cost of living. The eternal spring weather and established expat communities make these areas particularly popular for permanent relocation.

Bocas del Toro draws eco-tourism investors and those seeking Caribbean island living, with foreigners purchasing land for sustainable development projects, boutique hotels, and vacation rentals targeting the growing adventure tourism market.

Pedasí and El Valle offer more affordable options for beachfront and nature-focused properties, attracting budget-conscious buyers seeking weekend homes or rental properties in emerging tourist destinations.

What is the average price of land in different parts of Panama right now?

As of September 2025, land prices in Panama vary significantly based on location, accessibility, and development potential.

Region/Land Type	Price Range (USD per m²)	Notes
Panama City Urban Land	$1,800 - $3,500	Premium areas like Costa del Este reach $3,200+
Titled Beachfront Land	$10 - $50+	Highly variable by location and access
Agricultural Farmland	$1 - $6.50	Depends on soil quality and road access
Mountain Land (Boquete/Volcán)	$1 - $20	Scenic retiree areas with cooler climate
Commercial Urban Lots	$1,500 - $2,800	Central business districts
Island Properties	$5 - $100+	Requires government concession
Rural/Undeveloped Land	$0.50 - $5	Remote areas with limited access

What are the mandatory steps in the process of buying land, and which steps are optional?

The mandatory land purchase process in Panama involves nine essential steps that cannot be skipped for a legally valid transaction.

First, conduct property search and select your target region, followed by hiring a reputable attorney and licensed real estate agent. Next, make an official offer with a Promise to Purchase agreement that includes a 10% deposit. The fourth mandatory step involves comprehensive due diligence, including legal title search to verify the Finca number and check for any encumbrances or liens against the property.

The fifth step requires executing a formal purchase agreement (Contrato de compraventa) with all terms clearly specified. If you need financing, secure your mortgage or prepare cash funds as the sixth step. The seventh mandatory step involves preparing all legal documentation and having the deed notarized by a Panamanian notary public.

Step eight requires completing the funds transfer through wire transfer or cashier's check to comply with banking regulations. Finally, the ninth mandatory step involves registering the deed in the Public Registry to establish legal title ownership under your name.

Optional steps include physical property inspection by professional services, environmental or zoning assessments for development projects, and negotiating special legal protections or seller warranties beyond standard terms.

What official documents do you need to provide when buying land as a foreigner?

Foreign land buyers must provide six essential document categories to complete a legal purchase in Panama.

1. **Valid passport** - Your current passport with at least six months remaining validity2. **Proof of funds** - Bank statements showing sufficient funds for the purchase and closing costs3. **Signed purchase agreement** - The notarized Contrato de compraventa with all terms specified4. **Power of Attorney documents** - If you're not physically present during closing5. **Notarized and certified copies** - All foreign documents must be apostilled or consularized6. **Seller's documentation** - Including the seller's title deed and registration receipts from the Public Registry

Additional documentation may be required depending on your specific situation, such as corporate documents if purchasing through a company, marriage certificates for joint ownership, or proof of legal residency status if applicable. All documents in languages other than Spanish require certified translation by an authorized translator in Panama.

Can you complete the purchase of land in Panama without being physically in the country?

Yes, foreigners can complete land purchases in Panama without being physically present through a legally recognized Power of Attorney process.

You can grant Power of Attorney to a Panama-based representative, typically your attorney or a trusted local contact, who will act on your behalf during the closing process. This document must be properly notarized and legally valid under Panamanian law to authorize your representative to sign documents, transfer funds, and complete the property registration.

Alternatively, you can execute signatures at a Panamanian consulate in your home country, which allows you to sign all necessary documents with proper consular authentication. This process requires scheduling appointments with the consulate and ensuring all documents meet their specific requirements for international property transactions.

Remote purchases typically require additional time for document preparation, authentication, and coordination between multiple parties. You'll need to provide extra documentation to verify your identity and ensure compliance with anti-money laundering regulations when transferring funds internationally.

However, many experienced buyers recommend visiting the property at least once before purchase to verify its condition, location, and surrounding area, even if the final closing can be completed remotely.

What taxes, fees, and additional costs should you expect when buying land?

Land purchases in Panama involve several mandatory taxes and fees that typically total 3-5% of the property value beyond the purchase price.

The Real Estate Transfer Tax represents the largest cost at 2% of the higher value between the sale price and cadastral value, traditionally paid by the seller but often negotiated as part of the purchase terms. Notary and Registry fees add another 0.5-1% of the property value for document preparation and official registration in the Public Registry.

If you obtain mortgage financing, expect additional bank fees including appraisal costs, legal review fees, and loan processing charges that can add $2,000-5,000 to your total costs. Municipal clearances and certificates require small fees typically under $500 total for various local government approvals.

Translation and certification costs apply to all foreign documents, ranging from $100-500 depending on the number of documents requiring official translation. Legal representation fees typically range from $2,000-5,000 for standard transactions, though complex deals may cost more.

Annual property taxes in Panama follow a progressive rate structure from 0% to 1% of assessed value, with new construction often qualifying for tax exemptions ranging from 5-20 years depending on the property type and location.

Can foreigners pay cash for land purchases, and how common is that practice?

Cash payments are very common and widely accepted for land purchases in Panama, especially for properties under $500,000.

Approximately 60-70% of foreign land buyers complete their purchases with cash payments through wire transfers or cashier's checks, avoiding the complexities and costs associated with international mortgage financing. Cash purchases typically close faster, often within 30-45 days compared to 60-90 days for financed purchases.

Banks may request documentation showing the source of funds to comply with anti-money laundering regulations, particularly for transfers exceeding $10,000. You'll need to provide bank statements, income verification, or other documentation demonstrating the legitimate origin of your funds.

Wire transfers represent the most secure method for international cash purchases, though they involve banking fees typically ranging from $50-200 depending on your bank and the transfer amount. Cashier's checks from recognized international banks are also accepted but require additional verification time.

Cash buyers often negotiate better purchase prices since they can close quickly without financing contingencies, potentially saving 5-10% compared to financed purchases in competitive markets.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Panama versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

Is mortgage financing available for foreigners buying land, and if so, what are the typical rates, conditions, and tips to secure it?

Mortgage financing is available to foreigners for titled land purchases in Panama, though terms are less favorable than for Panamanian citizens.

As of September 2025, typical mortgage rates for foreigners range from 7-9% annually, including the FECI tax, which is significantly higher than rates offered to residents. Foreign buyers must provide larger down payments of 30-40% of the property value, with some banks requiring up to 50% for non-resident borrowers.

Maximum loan-to-value ratios typically cap at 60-70% for foreign borrowers, with loan terms ranging from 15-25 years depending on the borrower's age and financial profile. Banks generally require proof of stable income, excellent credit history, and substantial liquid assets beyond the down payment requirement.

To secure favorable financing terms, work with banks that specialize in expat lending such as Multibank, Banesco, or Global Bank. Provide comprehensive financial documentation including tax returns, bank statements, employment verification, and credit reports from your home country. Consider establishing a Panamanian bank account and building a local banking relationship before applying for a mortgage.

Permanent residents often qualify for significantly better terms, including lower interest rates and reduced down payment requirements, making residency status a valuable consideration for serious land investors.

Does buying land in Panama give you any path to residency or citizenship?

Yes, purchasing land in Panama can provide a pathway to both residency and eventual citizenship through specific investment visa programs.

The Friendly Nations Visa requires a minimum real estate investment of $200,000 and provides permanent residency for citizens of designated countries including the United States, Canada, most European nations, and several other countries. The Qualified Investor Visa requires a $300,000 investment but is rising to $500,000 soon, offering permanent residency regardless of nationality.

Both programs grant immediate permanent residency status, allowing you to live, work, and conduct business in Panama without additional permits. Permanent residents enjoy the same property ownership rights as citizens and qualify for better mortgage terms from local banks.

After maintaining continuous legal residence in Panama for five years, permanent residents become eligible to apply for Panamanian citizenship. The citizenship process requires demonstrating Spanish language proficiency, knowledge of Panamanian culture and history, and formal renunciation of previous nationality, though this is often treated as a formality.

It's something we develop in our Panama property pack.

Panamanian citizenship provides benefits including visa-free travel to over 140 countries, the right to vote in elections, and access to public healthcare and education systems.

What are the most common mistakes and pitfalls foreigners face when purchasing land in Panama?

The most dangerous mistake involves purchasing untitled land or "Right of Possession" (ROP) properties without proper legal review, which can result in complete loss of investment.

1. **Skipping professional legal representation** - Attempting to navigate the purchase process without qualified Panamanian legal counsel2. **Failing to verify title in Public Registry** - Not confirming the Finca number and checking for liens, encumbrances, or ownership disputes3. **Overpaying due to lack of market knowledge** - Accepting inflated prices without researching comparable sales or local market conditions4. **Underestimating closing costs** - Not budgeting for taxes, fees, and additional expenses that can add 3-5% to the purchase price5. **Relying on unlicensed brokers** - Working with unscrupulous "finders" or unlicensed agents who may misrepresent property details6. **Ignoring zoning restrictions** - Purchasing land without understanding local development regulations or environmental limitations7. **Rushing purchase decisions** - Making offers without adequate due diligence period or property inspection

Many foreigners also make the mistake of not understanding the difference between titled and untitled land, leading to investments in properties with questionable legal status. Always insist on seeing the original title documents and verify registration in the Public Registry before proceeding with any purchase.

Environmental and cultural factors also trip up foreign buyers who purchase land without understanding local infrastructure limitations, seasonal access issues, or community dynamics that could affect future development plans.

What do foreigners typically use their land for in Panama, and what is the long-term forecast for the land market?

Foreign land buyers in Panama typically pursue four main use categories that align with lifestyle goals and investment strategies.

Residential development represents the largest category, with foreigners building primary residences for retirement or relocation, vacation homes for periodic use, and rental properties targeting the growing expat and tourist markets. Many buyers in Boquete, Coronado, and similar areas focus on creating personal retreats or retirement compounds.

Tourism and hospitality investments have gained popularity, with foreigners developing boutique hotels, eco-lodges, vacation rental properties, and adventure tourism facilities in areas like Bocas del Toro and El Valle. These projects capitalize on Panama's growing reputation as a sustainable tourism destination.

Agricultural ventures attract investors interested in coffee plantations, cattle ranching, organic farming, and sustainable agriculture projects in the interior provinces. The country's year-round growing season and export advantages make agribusiness an appealing option for land buyers seeking income-producing properties.

The long-term forecast for Panama's land market remains positive through 2030, driven by continued foreign investment, major infrastructure improvements including airport expansions and highway development, and growing international recognition as a retirement and investment destination. Coastal areas, mountain regions, and urban zones are expected to see above-average price appreciation of 5-8% annually.

It's something we develop in our Panama property pack.

The luxury and sustainable development sectors show particularly strong growth potential, with increasing demand for eco-friendly projects and high-end residential developments targeting affluent international buyers seeking tropical lifestyle options.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. The LatinvestOR - Buy Land Panama Guide
2. The LatinvestOR - Foreigners Buy Land Panama
3. Global Property Guide - Panama Price History
4. The LatinvestOR - Panama Price Forecasts
5. Generis Online - Land Acquisition Guide Panama
6. Living in Panama - Real Estate Buying Guide
7. Doze Real Estate - Panama Property Taxes Guide
8. Casa Solution - Panama Mortgage Guide
9. NTL Trust - Panama Investment Residency
10. Panacrypto - Real Estate Mistakes Panama