How does buying property in Panama as an American work?

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, David, 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.

Can Americans buy property in Panama with the same rights as locals?

Americans enjoy nearly identical property ownership rights as Panamanian citizens when buying real estate in Panama.

Foreign nationals, including US citizens, can legally own titled property in their own name with full ownership rights. This includes the right to buy, sell, rent, and transfer property without requiring a Panamanian partner or establishing a corporation.

The only restrictions apply to properties within 10 kilometers of national borders and the first 22 meters from the high-tide line on beaches, which are considered public domain. These limitations affect very few properties and are designed for national security purposes.

As of September 2025, Panama maintains one of the most foreigner-friendly property ownership frameworks in Latin America, with constitutional protections for foreign property rights that have remained stable for decades.

Do Americans need residency or a special visa to purchase property in Panama?

No residency permit or special visa is required for Americans to buy property in Panama.

You can purchase real estate while on tourist status using only your US passport as identification. The transaction can be completed during a standard 90-day tourist visit or even remotely through a Power of Attorney.

However, if you plan to live in Panama long-term, obtaining residency through programs like the Friendly Nations Visa or Investor Visa can provide additional benefits. These programs require real estate investments of $200,000-$300,000 but offer pathways to permanent residency and eventual citizenship.

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

Tourist status is sufficient for property ownership, making Panama accessible to American buyers regardless of their immigration status.

Is physical presence required to complete a property purchase in Panama?

Americans do not need to be physically present in Panama to complete a property purchase.

The entire transaction can be handled remotely through a properly executed Power of Attorney. This document must be signed, notarized, apostilled by the US State Department, and translated into Spanish by a certified translator in Panama.

Your authorized representative, typically your Panamanian lawyer, can handle all aspects of the purchase including property viewings, contract negotiations, due diligence, and closing procedures on your behalf.

Many American buyers successfully complete purchases from the United States, though some prefer to visit Panama at least once to view the property personally before making a final decision.

What is the step-by-step process for Americans buying property in Panama?

Step	Action Required	Timeline
1. Property Selection	Engage realtor and lawyer, view properties	1-4 weeks
2. Preliminary Contract	Sign Promise to Purchase, pay 10-30% deposit	1-2 days
3. Due Diligence	Lawyer verifies title, taxes, liens, boundaries	2-4 weeks
4. Final Contract	Sign Purchase & Sale Agreement at notary	1 day
5. Closing	Pay balance, register at Public Registry	1-2 days
6. Post-Closing	Get RUC tax ID, utilities, insurance	1-2 weeks
7. Documentation	Update municipal records, receive title	2-4 weeks

Is hiring a local lawyer mandatory for Americans, and what services do they provide?

While not legally required, hiring a Panamanian lawyer is strongly recommended for American property buyers.

The lawyer's responsibilities include:1. Conducting comprehensive due diligence on the property title2. Verifying tax compliance and identifying any liens or encumbrances3. Managing escrow accounts and deposit protection4. Drafting and reviewing all purchase contracts5. Acting as your Power of Attorney if purchasing remotely6. Handling property registration at the Public Registry7. Updating municipal tax records8. Providing ongoing legal support after purchase

Legal fees typically range from $1,500 to $3,000 depending on the property value and complexity of the transaction. This investment protects against title disputes, fraud, and ensures compliance with Panamanian law.

Choose lawyers with experience in foreign buyer transactions and verified credentials with the Panama Bar Association.

Can Americans obtain mortgages in Panama, and what are the terms?

Panamanian banks do provide mortgages to American citizens, though terms differ from domestic borrowers.

Banks typically finance up to 70% of the property value for foreigners, requiring a minimum 30% down payment. Interest rates range from 4.5% to 7% annually, with loan terms extending up to 15-20 years for qualified borrowers.

Required documentation includes passport, bank reference letters, proof of income, credit reports, tax returns, and a sworn declaration of fund origins. Some banks may require establishing a Panamanian bank account before loan approval.

Tips for improving approval chances include maintaining excellent credit history, providing larger down payments, working with international banks like HSBC or Citibank, and demonstrating stable income sources. Pre-approval can strengthen your negotiating position with sellers.

How do property taxes work for Americans owning real estate in Panama?

Panama's property tax system is progressive and relatively favorable for foreign owners.

Properties valued under $120,000 are completely exempt from annual property tax. For properties above this threshold, tax rates range from 0.5% to 1% based on assessed value, which is typically lower than market value.

Additional fiscal obligations include a 2% transfer tax paid at purchase, a 3% capital gains advance when selling, and 12% income tax on rental income if you rent the property. US citizens must also file US tax returns declaring worldwide income, though foreign tax credits may apply.

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

Property taxes are generally lower than comparable US markets, making Panama attractive for long-term ownership.

Which areas do Americans typically choose when buying property in Panama?

American buyers concentrate in specific regions that offer modern amenities, security, and strong expat communities.

Popular choices include:**Panama City Areas:**- Costa del Este: Modern high-rises, shopping centers, international schools- Punta Pacifica: Luxury condos, Trump Tower, ocean views- San Francisco: Family-friendly, central location, good restaurants- El Cangrejo: Urban living, nightlife, business district- Casco Viejo: Historic charm, boutique hotels, cultural attractions**Beach Communities:**- Coronado: Gated beach community, golf course, 90 minutes from capital- Pacific beaches: Relaxed coastal lifestyle, growing infrastructure**Mountain Towns:**- Boquete: Cool climate, expat community, affordable living- David: Commercial center, good healthcare, lower costs

These areas offer established infrastructure, reliable utilities, and proximity to international airports, making them ideal for both investment and lifestyle purposes.

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.

What are the best investment areas in Panama for rental yields and appreciation?

Panama City dominates the rental market with yields averaging 6-8% annually, significantly higher than most US markets.

Costa del Este and El Cangrejo deliver the strongest rental performance, with high demand from business travelers and expat professionals. Studio apartments rent for approximately $1,550 monthly, two-bedrooms for $1,600, and three-bedrooms for $2,400.

For capital appreciation, Casco Viejo and Punta Pacifica show consistent 2-4% annual growth due to limited supply and increasing tourism. San Francisco offers the best balance of livability and investment potential for families.

Beach areas like Coronado provide lower yields (4-6%) but appeal to vacation rental markets and long-term appreciation as infrastructure develops.

Mountain towns like Boquete offer affordable entry points but limited rental markets, making them better for personal use than investment.

How do property prices compare across Panama's regions in 2025?

Location	Average Price (USD/sqm)	Annual Trend
Casco Viejo (off-plan)	$4,150	+2-4%
San Francisco (off-plan)	$2,720	+1-2%
Panama City (average)	$1,804-$2,483	+0.83-2.4%
Houses outside city	$1,603	-3.2%
Coronado beach area	$1,200-$1,800	+1-3%
Boquete properties	$800-$1,500	0-2%
David commercial	$600-$1,200	+0-1%

What mistakes should Americans avoid when buying property in Panama?

Several common pitfalls can cost American buyers significant money and legal complications.

Critical mistakes to avoid:1. **Buying Right of Possession (ROP) properties**: These lack formal title and carry substantial risks, especially on islands and coastal areas2. **Skipping title verification**: Always confirm clear title and absence of liens through proper legal channels3. **Ignoring zoning restrictions**: Local regulations can limit property use and development rights4. **Assuming tax benefits transfer**: Verify that any claimed tax incentives apply to your specific situation5. **Using seller's lawyer**: Always hire independent legal representation to protect your interests6. **Rushing due diligence**: Allow adequate time for comprehensive property and legal review7. **Overlooking maintenance costs**: Factor in ongoing expenses for security, maintenance, and utilities

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

Working with experienced professionals and conducting thorough research prevents most costly mistakes.

What are the current market trends affecting American property investment in Panama?

As of September 2025, several positive trends support American investment in Panama's property market.

Foreign buyer activity increased 25% in the past year, with Americans representing the largest group of international purchasers. Tourism recovery post-pandemic drives demand for short-term rental properties, particularly in Panama City and beach communities.

Rental prices rose 12% year-over-year in Panama City, while national rental yields improved to 6.8-7.8%. The luxury market shows particular strength, with high-end beachfront and urban properties experiencing strong demand.

Construction of new infrastructure including metro extensions and highway improvements enhances property values in previously less accessible areas. The government maintains pro-business policies encouraging foreign investment.

Market forecasts suggest continued 1-2% annual price appreciation through 2026, with rental markets remaining strong due to limited new supply and growing expat populations.

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. BrightTax - Buying Property in Panama
2. Taxes for Expats - Panama Property Guide
3. The Latinvestor - Can Americans Buy Property in Panama
4. Global Property Guide - Panama Price History
5. Global Property Guide - Panama Rental Yields
6. Expat-tations - Panama Real Estate Q1 2025
7. The Latinvestor - Panama Property Pitfalls
8. The Latinvestor - Panama City Price Forecasts