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
Yes, Americans can legally buy and own property in Panama with almost identical rights to local citizens. Americans enjoy full property ownership rights across most of the country, though some border and coastal restrictions apply for national security reasons.
Panama's pro-foreign investment policies make it one of the most accessible real estate markets in Latin America for American buyers, with no residency requirements for property ownership and straightforward legal procedures.
If you want to go deeper, you can check our pack of documents related to the real estate market in Panama, based on reliable facts and data, not opinions or rumors.
Americans can purchase property in Panama without restrictions in most areas, except within 10 kilometers of borders and the first 22 meters from beaches.
No visa or residency status is required for property ownership, though owning property can qualify Americans for residency programs requiring $200,000-$300,000 investments.
| Aspect | Details | Requirements/Restrictions |
|---|---|---|
| Legal Ownership | Full property rights same as locals | Avoid 10km border zones and 22m beachfront |
| Residency Required | No visa or residency needed | Property can qualify for residency visas |
| Ownership Structure | Direct personal ownership allowed | Corporations optional for privacy |
| Physical Presence | Not required for purchase | Power of Attorney available |
| Documentation | Title, survey, tax clearance | Passport and RUC number needed |
| Legal Assistance | Local lawyer strongly recommended | Handles contracts and due diligence |
| Property Prices | $1,000-$3,500 per sqm | Varies by location and amenities |
Can Americans legally buy property in Panama just like locals do?
Americans can legally buy property in Panama with almost identical rights to Panamanian citizens.
The Panamanian constitution grants foreigners full property ownership rights, allowing Americans to purchase residential, commercial, and undeveloped land directly in their own names. Americans receive the same type of property titles (TĂtulo de Propiedad) as locals and enjoy complete ownership rights including the ability to sell, rent, or transfer the property.
Panama's legal framework specifically protects foreign property rights through Constitutional guarantees that prevent discrimination based on nationality. The only significant differences between American and local ownership rights involve certain restricted areas for national security purposes, but these limitations apply equally to all non-citizens.
As of June 2025, Panama continues to maintain one of the most foreigner-friendly property ownership policies in Central America, with no quotas, caps, or approval requirements for most real estate transactions involving Americans.
Are there any restrictions on where Americans can purchase property in Panama?
Yes, Americans face specific geographic restrictions when purchasing property in Panama for national security reasons.
The primary restriction prohibits foreigners from owning property within 10 kilometers of any international border, including the borders with Costa Rica and Colombia. This security zone was established to protect sensitive border areas and applies to all non-Panamanian citizens.
Americans also cannot own the first 22 meters from the high tide line on any beach, as this area is considered public maritime domain under Panamanian law. However, Americans can own beachfront property beyond this 22-meter zone and can obtain concessions for commercial use of the restricted beachfront area.
Certain islands require government approval for foreign ownership, and some strategically important islands near the Panama Canal or in sensitive military zones are completely restricted from foreign ownership. Mountain areas, urban centers, and most coastal regions outside the 22-meter restriction remain fully accessible to American buyers.
Do Americans need a specific visa or residency status to buy or own real estate in Panama?
No, Americans do not need any visa or residency status to buy or own real estate in Panama.
Panama allows tourists and non-residents to purchase property using only a valid passport and tourist status. This policy makes Panama one of the most accessible real estate markets in Latin America for American investors and retirees.
However, owning property in Panama can qualify Americans for several residency programs. The Friendly Nations Visa requires a minimum $200,000 real estate investment and offers a path to permanent residency within five years. The Qualified Investor Visa requires a $300,000 property investment and provides faster processing times.
It's something we develop in our Panama property pack.
These residency programs offer significant benefits including tax advantages, easier banking access, and eventual eligibility for Panamanian citizenship after five years of permanent residency.
Can Americans own land outright or only through certain legal structures like corporations or foundations?
Americans can own land outright in their personal names without requiring any special legal structures.
Direct personal ownership is the most common and straightforward approach for American property buyers in Panama. This method provides the same legal protections and ownership rights as Panamanian citizens, with the property title registered directly under the American buyer's name.
Using a Panamanian corporation or Private Interest Foundation is optional and typically chosen for privacy, estate planning, or tax optimization reasons rather than legal requirements. Corporate ownership can provide benefits such as anonymity (shareholders are not public record), easier property transfers, and potential tax advantages for rental income.
Private Interest Foundations offer similar privacy benefits with additional estate planning advantages, allowing Americans to designate beneficiaries and establish succession plans. However, both structures involve additional costs including annual fees, legal compliance requirements, and more complex accounting obligations.
As we reach mid-2025, direct personal ownership remains the preferred choice for most American buyers due to its simplicity and lower ongoing costs.
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Do Americans need to be physically present in Panama to complete a property purchase?
No, Americans do not need to be physically present in Panama to complete a property purchase.
Panama's legal system allows Americans to appoint a Power of Attorney to handle the entire transaction remotely. This Power of Attorney must be granted to a licensed attorney in Panama who can legally represent the buyer throughout the purchase process, including signing contracts, transferring funds, and registering the property title.
The Power of Attorney document must be prepared in the United States, notarized, apostilled by the appropriate state authority, and then translated into Spanish by a certified translator in Panama. This process typically takes 2-3 weeks but allows Americans to complete purchases entirely from the United States.
Remote purchases have become increasingly common as of June 2025, with digital document signing and virtual property tours making the process more accessible. However, many Americans choose to visit Panama at least once during the purchase process to personally inspect the property and meet their legal team.
What documents and steps are required for an American to legally buy property in Panama?
The property purchase process in Panama requires specific documentation and follows established legal steps.
| Step | Required Actions | Timeline |
|---|---|---|
| 1. Property Selection | Research, view properties, hire realtor and lawyer | 1-4 weeks |
| 2. Offer and Promise to Purchase | Submit written offer, sign preliminary contract, pay deposit (10-20%) | 1-2 weeks |
| 3. Due Diligence | Title search, lien verification, tax clearance, survey review | 2-4 weeks |
| 4. Final Contract | Sign purchase agreement before notary, arrange financing | 1 week |
| 5. Closing and Registration | Pay balance, transfer ownership, register title at Public Registry | 1-2 weeks |
| 6. Post-Closing | Obtain RUC number, set up utilities, insurance | 2-3 weeks |
Essential documents include the original Property Title (TĂtulo de Propiedad), current property survey, Certificate of Good Standing showing no outstanding taxes, Public Registry Certificate showing property history, and Paz y Salvo tax clearance certificate. Americans must provide a valid passport and typically obtain a RUC (taxpayer identification number) for property registration and future tax obligations.
Is hiring a local lawyer mandatory for Americans purchasing real estate in Panama, and what does the lawyer typically handle?
While not legally mandatory, hiring a local lawyer is essential and strongly recommended for American property buyers in Panama.
A qualified Panamanian attorney handles critical aspects of the transaction that protect American buyers from common risks. The lawyer conducts comprehensive title searches to verify clear ownership, checks for liens or encumbrances, ensures all property taxes are current, and verifies compliance with zoning regulations.
The attorney also reviews and negotiates all contracts, ensures proper legal language and terms, handles the notarization process required for property transfers, and manages the registration of the new title at the Public Registry. For Americans buying remotely, the lawyer serves as their Power of Attorney and represents their interests throughout the entire process.
Legal fees typically range from $1,500 to $3,000 depending on the property value and complexity of the transaction. This investment protects Americans from potentially costly legal issues and ensures compliance with Panamanian property laws.
It's something we develop in our Panama property pack.
What are the typical property prices across major cities and regions in Panama, and how do they compare?
Property prices in Panama vary significantly by location, with Panama City commanding the highest prices and rural areas offering the most affordable options.
| Location | Price Range (per sqm) | Property Type |
|---|---|---|
| Panama City - Costa del Este | $2,100 - $3,000 | Luxury condos and apartments |
| Panama City - Santa Maria | $2,500 - $3,500 | Premium beachfront properties |
| Panama City - Punta Pacifica | $1,500 - $3,000 | High-rise condos and penthouses |
| Panama City - San Francisco | $1,300 - $2,700 | Modern residential developments |
| Panama City - El Cangrejo | $1,500 - $2,800 | Central urban apartments |
| Coronado Beach | $1,200 - $2,000 | Beachfront homes and condos |
| Boquete Highlands | $1,000 - $1,500 | Mountain homes and lots |
| Pedasi | $1,200 - $1,800 | Coastal properties and developments |
As of June 2025, Panama City's premium areas like Santa Maria and Costa del Este continue to appreciate due to limited inventory and high demand from international buyers. Beachfront properties in Coronado and Pedasi offer better value for Americans seeking vacation homes or rental investments, while Boquete remains popular among retirees for its cooler climate and established expat community.
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.
Which areas in Panama are most popular among Americans for living, rental income, or property appreciation, and what are the current trends in rental yields and tourism growth?
American buyers concentrate in specific areas of Panama based on lifestyle preferences and investment objectives.
Panama City attracts Americans seeking urban amenities, business opportunities, and strong rental markets. Areas like Costa del Este, Casco Viejo, and Balboa Avenue offer rental yields of 6-7% annually and benefit from Panama's growing financial sector and tourism industry.
Boquete in the ChiriquĂ Province draws American retirees and expats seeking cooler mountain climates, established expat communities, and lower living costs. Property values in Boquete have shown steady appreciation of 3-5% annually, driven by consistent American demand and limited developable land.
Coronado and the Pacific Coast appeal to Americans wanting beachfront properties for vacation homes or Airbnb rentals. The tourism boom along Panama's Pacific Coast is driving rental demand, with vacation rental yields reaching 8-10% in prime beachfront locations.
Panama's tourism industry is projected to grow 8-12% annually through 2026, boosting demand for rental properties in tourist areas. The government's focus on infrastructure development, including the expansion of Tocumen International Airport and new highway projects, is expected to further enhance property values in well-connected areas.
Are there taxes or fiscal obligations Americans should expect when owning, renting, or selling property in Panama?
Americans owning property in Panama face several tax obligations both in Panama and the United States.
Panama property taxes vary based on whether the property serves as your principal residence. For principal homes, there is no tax on the first $120,000 of value, then 0.5-0.7% on amounts above that threshold. Non-principal homes face 0.6-1% tax on values exceeding $30,000.
Transfer taxes of 2% apply to property sales, typically paid by the seller. Capital gains tax of 10% applies to profits from property sales in Panama, while Americans must also report these gains to the IRS for US tax purposes.
Rental income generates tax obligations in both countries. Panama imposes a 12% tax on rental income, while Americans must report worldwide rental income to the IRS. Americans with foreign financial accounts exceeding $10,000 must file FBAR and FATCA reports annually.
It's something we develop in our Panama property pack.
Many Americans benefit from the US-Panama tax treaty provisions that help avoid double taxation, but professional tax advice is essential for proper compliance with both tax systems.
Can Americans get a mortgage in Panama, and what are the typical loan terms, interest rates, and eligibility requirements?
Yes, Americans can obtain mortgages from Panamanian banks, though terms differ from US financing options.
Panamanian banks typically finance 60-70% of the property's appraised value for foreign buyers. Interest rates as of June 2025 average around 6.5% for US dollar-denominated loans, plus a mandatory 1% FECI (Emergency Fund for Banking Stability) fee that applies to all mortgage loans in Panama.
Loan terms usually extend up to 20 years with amortization schedules calculated on the outstanding principal. Banks require comprehensive income documentation, credit history verification, and typically prefer borrowers with monthly income at least four times the proposed mortgage payment.
Required documentation includes US tax returns for the past two years, bank statements, employment verification letters, US credit reports, and proof of other assets. Most banks also require borrowers to maintain checking and savings accounts with the lending institution and carry comprehensive property insurance throughout the loan term.
Some banks offer more favorable terms to borrowers who establish residency in Panama or maintain substantial deposits with the institution. Pre-approval processes typically take 4-6 weeks, making mortgage financing a viable option for Americans purchasing properties above $200,000.
What are the most common mistakes Americans make when buying property in Panama, and how can they avoid them?
Americans frequently make several critical mistakes when purchasing Panamanian real estate that can result in significant financial losses.
The most serious mistake involves purchasing "Right of Possession" (ROP) properties instead of fully titled land. ROP properties lack formal government-issued titles and offer only possessory rights that can be challenged or lost. Americans should always verify that properties have proper TĂtulo de Propiedad documentation before proceeding.
Skipping thorough due diligence represents another costly error. Many Americans fail to conduct comprehensive title searches, lien verification, and tax clearance checks before closing. This oversight can result in unexpected debts, legal challenges, or invalid property transfers.
Not hiring qualified local legal representation puts Americans at serious disadvantage in Panama's legal system. The country's legal procedures, documentation requirements, and property laws differ significantly from US standards, making professional legal guidance essential.
Ignoring local zoning regulations and building codes leads to problems for Americans planning renovations or new construction. Each corregimiento (district) has specific zoning laws, setback requirements, and building restrictions that must be verified before purchase.
Underestimating total ownership costs including maintenance, property taxes, insurance, and management fees for condominiums catches many American buyers unprepared. Always budget for these ongoing expenses and use escrow accounts for all significant payments during the purchase process to protect against fraud.
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.
Americans can successfully purchase and own property in Panama with the same rights as local citizens, making it an attractive destination for real estate investment and relocation.
By understanding the legal requirements, hiring qualified professionals, and avoiding common pitfalls, American buyers can navigate Panama's property market confidently and secure valuable real estate investments in this growing Central American economy.
Sources
- BrightTax - Buying Property in Panama
- Taxes for Expats - Panama Property Guide
- The Latin Investor - Panama US Citizen Property Ownership
- Golden Visas - Panama Residence
- Living in Panama - How to Buy Real Estate
- The Latin Investor - Panama Real Estate for Foreigners
- Global Property Guide - Panama Price History
- Nomad Capitalist - Living in Panama City
- The Latin Investor - Panama Real Estate Market
- Go With Guide - Panama Tourism Insights 2025