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
Foreigners can buy property in Panama almost as easily as locals, with very few restrictions and no residency requirements.
Panama offers one of the most foreign-friendly real estate markets in Latin America, allowing non-residents to purchase titled property with nearly identical rights to Panamanian citizens, except for border areas and certain beach zones.
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.
As of September 2025, foreigners can purchase property in Panama without residency requirements, except within 10km of international borders and the first 22 meters from beaches.
The buying process typically takes 1-3 months, requires legal assistance, and involves closing costs of 3-5% of the purchase price.
| Aspect | Requirements | Details |
|---|---|---|
| Ownership Rights | Nearly identical to locals | Full titled property ownership, no quotas or caps |
| Residency Required | No | Can purchase as tourist with valid passport |
| Physical Presence | Not mandatory | Can complete remotely via power of attorney |
| Legal Assistance | Highly recommended | 0.5-1% of purchase price |
| Transfer Tax | 2% | On higher of sale or cadastral value |
| Property Tax | 0-0.7% | First $120,000 exempt, progressive rates above |
| Mortgage Availability | Limited for foreigners | 30% down, 50-70% max financing |
| Rental Yields | 6.8-9.5% | Panama City averages 7.8% gross yields |
| Capital Gains Tax | 10% or 3% | 10% on actual gain or 3% of gross sale |
Can foreigners buy property in Panama the same way as locals, or are there restrictions?
Foreigners can buy property in Panama with almost identical rights to Panamanian citizens.
Panama allows full property ownership rights for foreigners, with the same legal protections granted to Panamanian citizens. There is no requirement to be a resident or citizen to own land or real estate. 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.
The main restrictions apply to specific geographic areas for national security reasons. Foreigners cannot own property within 10 kilometers of international borders with Costa Rica and Colombia, and the first 22 meters from the high tide line on any beach, as this area is considered public maritime domain under Panamanian law.
Beyond these border and coastal restrictions, foreigners can purchase apartments, houses, commercial buildings, and undeveloped land throughout Panama. Foreign buyers should almost always purchase titled property, unless working with a trusted attorney and developer.
It's something we develop in our Panama property pack.
Do foreigners need to meet any residency or visa requirements before they can purchase property?
No residency or visa requirements are needed to buy property in Panama as a foreigner.
You don't need residency to purchase property in Panama. Foreigners enjoy nearly the same ownership rights as citizens. Panama allows tourists and non-residents to purchase property using only a valid passport and tourist status.
However, property ownership can actually help you qualify for certain residency programs. Owning property valued at $300,000+ can help you qualify for Panama's Friendly Nations Visa or the Real Estate Investor Visa. 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.
As of September 2025, you can purchase property immediately upon arrival in Panama as a tourist, making it one of the most accessible markets for foreign investors in Latin America.
Is it necessary to be physically present in Panama to complete the purchase, or can it be done remotely?
Physical presence is not required to complete a property purchase in Panama.
It is not necessary to be physically present in Panama to complete the purchase. Transactions can be done remotely via a power of attorney to your lawyer; however, visiting is still recommended for due diligence.
While technically possible, purchasing property in Panama without visiting is not recommended. Physical inspection, meeting with professionals in person, and experiencing the location first-hand are important steps in making a sound investment.
For remote purchases, you'll need to grant power of attorney to a licensed attorney in Panama who can act on your behalf during the transaction. The attorney can handle document signing, property registration, and fund transfers. However, most experienced investors recommend at least one site visit to verify the property condition and meet your legal team in person.
Remote purchase procedures work best for buyers who have previous experience in Panama's market or are working with established, trusted professionals.
What is the step-by-step process for buying property as a foreigner, and what documents are required?
The property buying process in Panama follows a structured seven-step procedure that typically takes 1-3 months to complete.
- Property Selection: Research and view properties (can be done virtually)
- Assemble Professional Team: Hire a licensed real estate agent and attorney
- Make Offer: Submit offer and negotiate terms with seller
- Promise to Purchase Agreement: Sign "Promesa de Compraventa" and pay 10% deposit
- Due Diligence: Attorney verifies clear title, checks for liens and tax status
- Purchase Agreement: Sign final public deed before a notary public
- Closing and Registration: Pay balance and register property in Public Registry
Required documents include: passport copy, proof of funds, notarized contracts, property title, tax clearances, cadastral plan, and public deed. Additional documentation may include bank statements, income verification, and certified translations of foreign documents.
Timeline: Expect 1-3 months from offer to official registration. Ownership is officially transferred when the new deed is filed by the buyer's attorney or notary at the Public Registry.
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Is hiring a lawyer mandatory, and if not, why is it strongly recommended?
Hiring a lawyer is not legally mandatory but is strongly recommended for all property transactions in Panama.
Not mandatory by law, but highly recommended. Lawyers perform title search, check for liens, verify property status, draft contracts, explain legalities, and handle registration.
Legal fees typically range from 0.5% to 1% of the purchase price, making professional legal assistance very affordable relative to the transaction value. Notary involvement is required for all property transfers.
Attorneys provide essential services including conducting comprehensive title searches at the Public Registry, verifying the property is free of liens or encumbrances, ensuring all taxes are current, drafting and reviewing contracts, and managing the registration process. They also help navigate potential complications like inheritance issues, mortgage transfers, or zoning restrictions.
Given Panama's civil law system and language requirements, foreign buyers benefit significantly from local legal expertise. The relatively small cost of legal representation provides substantial protection against costly mistakes.
What taxes, fees, and other costs should a foreigner expect when buying and later reselling property?
Foreign buyers face several taxes and fees during purchase, ownership, and sale of Panama property.
| Cost Type | Rate/Amount | When Applied |
|---|---|---|
| Transfer Tax | 2% | At purchase (on higher of sale or cadastral value) |
| Legal Fees | 0.5-1% | At purchase |
| Notary Fees | 0.1-0.25% | At purchase |
| Registration Fees | 0.2-0.3% | At purchase |
| Total Closing Costs | 3-5% | At purchase |
| Property Tax (annual) | 0-0.7% | During ownership |
| Rental Income Tax | 10% | On rental income |
| Capital Gains Tax | 10% or 3% | At sale |
Property Tax rates are progressive: $0–120,000 value: 0% (exempt), $120,001–700,000: 0.5%, Over $700,000: 0.7%. New builds often qualify for 5–20 years of tax exemption.
On sale, Capital Gains Tax allows you to choose either 10% on actual gain or 3% of gross sale as an advance; can offset or credit on final capital gains taxes.
It's something we develop in our Panama property pack.
Are mortgages available to foreigners, and if so, what are the typical rates, conditions, and tips for getting approved?
Mortgages are available to foreigners in Panama but with stricter terms than for local residents.
Available, but terms are stricter than for locals: Down payment: typically 30%, Maximum financing: 50–70%, Interest rates: variable, depend on financial status; foreigners may face slightly higher rates and more documentation requirements.
Because of this, most foreign buyers pay in cash or use financing from their home country, especially when purchasing pre-construction units with installment payments.
Requirements for foreign borrowers typically include proof of income from home country, bank statements showing financial stability, debt-to-income ratios below 40%, and larger down payments. Some banks require establishing banking relationships in Panama before approving mortgages.
Many experienced buyers recommend exploring financing options in their home country, using home equity loans, or negotiating payment plans directly with developers for pre-construction properties.
How do property prices break down by city and region, and what are the current trends?
Property prices in Panama vary significantly by location, with Panama City commanding the highest prices and rural areas offering more affordable options.
According to the latest edition of the Real Estate Survey of Latin America (RIAL), published biannually by the Center for Financial Research at Torcuato Di Tella University, the average asking price for residential properties in the country's capital, Panama City, reached USD 1,804 per square meter as of March 2025. This reflects a year-on-year increase of 2.38% and a cumulative rise of 7.38% from the market's most recent low in September 2021.
Average prices per square meter vary widely, with Punta Pacifica and Casco Viejo topping $4,300, while El Cangrejo averages close to $2,800. Coronado (beachfront): $180,000–600,000+
As of September 2025, the market shows steady growth with increasing demand from both foreign and domestic buyers. Home sales surged by 20.7% in 2023, according to the Convivienda. This built on a 6.7% rise in 2022 and a dramatic 46% increase in 2021. Transaction values increased by 8.3% last year, with this momentum projected to continue through 2025.
Pre-construction properties continue to attract investors seeking payment plan flexibility, while resale properties offer immediate rental potential.
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 are most popular with foreigners for living, renting out, or investing, and what are their liveability scores, rental yields, and growth forecasts?
Several areas in Panama attract foreign investors and residents, each offering different advantages for living and investment.
| Location | Primary Appeal | Rental Yield Range | Growth Outlook |
|---|---|---|---|
| Panama City | Urban amenities, business hub | 6-8% | Strong |
| Coronado & Pacific Beaches | Beachfront lifestyle, retirees | Variable | Moderate |
| Boquete | Cool climate, expat community | 6-9% | Growing |
| Bocas del Toro | Tourism, beach access | 7-9% | Tourism-dependent |
| PedasĂ | Emerging beach destination | Variable | High potential |
| Costa del Este | Modern infrastructure | 6-8% | Stable |
| Casco Viejo | Historic charm, tourism | 5-7% | Mature market |
The research conducted by Global Property Guide in April 2025 found the average monthly rent in Panama City at USD 1,550 for studios and 1-bedroom units, USD 1,600 for two-bedroom units, USD 2,400 for 3-bedroom units, and USD 5,500 for larger units with 4 or more bedrooms. The corresponding gross rental yields for residential properties averaged 7.83%.
In 2024, gross rental yields in Panama ranged from 6.8% to 9.5%, making these compact spaces an attractive investment, particularly in urban and tourist hotspots.
Foreign residents particularly favor areas with established expat communities, modern amenities, and proximity to healthcare and international schools.
What are the fiscal implications for foreigners, such as property taxes, rental income taxes, or capital gains taxes?
Foreign property owners in Panama face several tax obligations that are generally favorable compared to other countries.
Annual property tax rates are progressive based on property value, with the first $120,000 completely exempt from taxation. Properties valued between $120,001-$700,000 pay 0.5% annually, while properties over $700,000 pay 0.7% annually.
Rental income tax is 10% with deductible expenses allowed, and rental incomes in Panama City are taxed at 6%, which is very advantageous. Allowable deductions include property management fees, maintenance costs, insurance, and depreciation.
For capital gains, sellers can choose between paying 10% on actual profit or 3% of the gross sale price. Double tax treaties may apply; U.S. citizens must report worldwide income.
Many new developments qualify for property tax exemptions ranging from 5-20 years, significantly reducing long-term ownership costs. It's important to verify exemption status with your attorney before purchase.
What are the most common mistakes or pitfalls foreigners make when buying property in Panama?
Foreign buyers often encounter several preventable mistakes that can result in financial losses or legal complications.
- Buying non-titled property: Purchasing "Right of Possession" land carries significant risk of losing the property, as the government holds the actual title
- Skipping due diligence: Failing to conduct proper title searches can reveal liens, encumbrances, or ownership disputes
- Underestimating total costs: Not budgeting for 3-5% closing costs plus ongoing property taxes and maintenance
- Misunderstanding tax exemptions: Assuming new construction tax exemptions automatically apply without verification
- Using unlicensed professionals: Working with unqualified agents or attorneys can lead to legal problems
- Overpaying for property: Not researching comparable market values or negotiating effectively
- Ignoring location restrictions: Purchasing in border areas or restricted coastal zones
Liquidity varies as well; some areas are oversupplied, and buyers should be cautious about entering saturated markets.
It's something we develop in our Panama property pack.
What regions or cities show the best potential right now for capital appreciation, tourism growth, or strong rental income?
Several areas in Panama demonstrate strong investment potential based on infrastructure development, tourism growth, and rental demand.
Panama City (San Francisco, Marbella, Punta Pacifica): Rental demand, modernization, infrastructure projects; Coronado, Playa Caracol, Costa del Este: High demand, expat and vacation market; Boquete, PedasĂ, Bocas del Toro: Growing expat hubs, tourism potential, moderate entry prices; Mountain/lake properties: Growing trend among lifestyle buyers and digital nomads
These trends are driving up demand for long-term rentals in well-located neighborhoods. Rental prices are rising accordingly. In areas like El Cangrejo and Costa del Este—both popular with expats and younger demographics especially—rents are up more than 12% this year.
We're seeing strong interest in turn-key short-term rental units located in licensed buildings in Costa del Este, for example. These investments offer high yields with legal certainty, professional management, and built-in demand from tourists and business travelers.
Emerging beach destinations like PedasĂ and mountain communities like Boquete show particular promise due to growing remote work trends and lifestyle migration from North America.
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.
Panama offers one of the most accessible and secure property markets for foreign investors in Latin America as of September 2025.
With minimal restrictions, attractive rental yields of 6.8-9.5%, and growing economic stability, Panama continues to attract international buyers seeking both lifestyle and investment opportunities.
Sources
- Panama Sovereign Realty - Property Laws 2025
- Living In Panama - 10K Rule & Foreign Ownership
- Taxes for Expats - Complete Buying Guide
- Global Property Guide - Panama Buying Guide
- TheLatinvestor - Americans Buying Property
- Global Property Guide - Market Analysis 2025
- TheLatinvestor - Real Estate Trends 2025
- Angloinfo - Property Laws in Panama