Can foreigners buy property in Panama City?

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

Yes, the analysis of Panama City's property market is included in our 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 City (in the country 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 Panama 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, Bocas del Toro, 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 foreigners legally buy property in Panama City, and are the rules different compared to locals?

Yes, foreigners can legally buy property in Panama City with full ownership rights and protections nearly identical to Panamanian citizens.

Panama's Constitution guarantees equal property rights for foreigners and locals, making it one of the most investor-friendly jurisdictions in Latin America. Foreign buyers enjoy the same legal protections, can hold title in their own name, and face no discrimination in the purchasing process.

The only two restrictions that apply to all buyers (both foreign and local) are properties within 10 kilometers of international borders and the first 22 meters of beachfront property, which remains public domain. These limitations rarely affect Panama City real estate transactions since the city is well inland and most waterfront properties are along the Pacific coast or bay areas beyond the restricted zone.

Foreign ownership is protected by Panama's bilateral investment treaties with over 20 countries, providing additional legal security for international property investors. The country's stable legal system, based on civil law principles, ensures that property rights are well-established and enforceable through the courts.

As of September 2025, there are no pending legislative changes that would alter these favorable conditions for foreign property ownership in Panama City.

Are there any restrictions for certain nationalities when buying property?

No, there are no nationality-based restrictions for buying property in Panama City - citizens of any country can purchase real estate with equal rights.

Unlike many countries that impose restrictions on buyers from specific nations, Panama maintains an open-door policy for all foreign investors regardless of their passport or country of origin. Whether you're from the United States, China, Russia, Iran, or any other nation, the same property purchase rules apply.

This non-discriminatory approach extends to all aspects of the transaction process, including financing options, legal representation, and post-purchase property management. Banks and financial institutions evaluate mortgage applications based on financial credentials rather than nationality, though foreigners typically face slightly higher down payment requirements compared to residents.

The only documentation requirement related to nationality is providing a valid passport and, in some cases, an apostilled background check from your home country if you're simultaneously applying for residency. However, these documents are standard administrative requirements rather than restrictive measures.

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

Do foreigners need residency, a visa, or special permits to purchase real estate?

No residency, visa, or special permits are required for foreigners to buy property in Panama City - you can purchase as a tourist or non-resident.

Panama allows property purchases on tourist status, making it possible to complete transactions during a vacation or business trip. The standard 90-day tourist visa that most nationalities receive upon arrival provides sufficient time to complete the entire purchase process, from property viewing to final closing.

However, purchasing property can help you qualify for various residency programs if you choose to pursue them later. The Friendly Nations Visa requires a minimum real estate investment of $200,000 as of September 2025, though this threshold will increase to $500,000 by October 2026. Other investment-based residency options include the Self-Economic Solvency Visa, which also recognizes real estate investments.

For buyers planning to use their property purchase toward future residency applications, it's important to ensure proper documentation during the transaction, including certified copies of the sale contract, title certificate from the public registry, and proof of legal origin of funds. These documents become essential if you later decide to apply for permanent residency or citizenship.

Some buyers prefer to establish a Panamanian corporation to hold the property, which can provide certain tax advantages and estate planning benefits, but this is optional rather than required.

Is it necessary to be physically present in Panama to complete a property purchase?

Physical presence in Panama is not mandatory - the entire property purchase process can be completed remotely through a local attorney.

Remote purchases are accomplished by granting a notarized Power of Attorney to a qualified Panamanian lawyer, who can then act on your behalf for all legal actions including signing contracts, completing due diligence, and finalizing the transaction at closing. This Power of Attorney must be notarized in your home country and apostilled according to the Hague Convention for international recognition.

Many successful property transactions in Panama City are completed by buyers who never physically visit the property until after closing. This is particularly common for investment properties or when buyers have already visited Panama previously and are familiar with specific neighborhoods and developments.

The remote purchase process typically involves digital document review, video property tours, virtual meetings with lawyers and real estate agents, and wire transfers for deposit and final payment. Modern technology and Panama's well-developed legal infrastructure make this process secure and efficient.

However, if you're buying for personal residence or unfamiliar with the Panama City market, visiting in person is highly recommended to assess neighborhoods, inspect the property condition, and meet your legal team face-to-face. This is especially important for older properties or those requiring renovations.

What is the exact step-by-step process to buy property, and which documents are required?

The property purchase process in Panama City follows six main steps, typically taking 30-60 days from offer to closing.

Step	Action Required	Key Documents Needed
1. Research & Preparation	Select area, engage agent/lawyer, secure financing pre-approval	Passport, proof of funds, bank references
2. Offer & Preliminary Contract	Submit offer, negotiate terms, sign "Promesa de Compraventa", pay deposit (typically 10%)	Offer letter, preliminary purchase contract, deposit receipt
3. Due Diligence Period	Title search, property inspection, verify no liens or outstanding taxes	Title certificate, tax clearance certificate, registry search report
4. Final Contract Preparation	Draft final deed, arrange final financing, schedule notary appointment	Final purchase deed, bank documentation, insurance policy
5. Closing & Transfer	Sign before notary, transfer funds, receive keys and title	Transfer receipt, cadastral plan, all clearance certificates
6. Post-Closing Registration	Register with Public Registry, obtain RUC for taxes, set up utilities	Passport, title deed, utility connection forms

Essential documents include a valid passport, proof of legal origin of funds (bank statements, income verification), and if pursuing residency, additional immigration forms and apostilled background checks. All foreign documents must be translated into Spanish by a certified translator and apostilled in your home country.

The deposit amount typically ranges from 10-20% of the purchase price and is held in an escrow account until closing. Final payment is usually made by wire transfer on the closing date, though some buyers arrange certified checks for smaller transactions.

Is hiring a lawyer mandatory, or can foreigners manage the process on their own?

Hiring a real estate lawyer is not strictly mandatory under Panamanian law, but it is strongly recommended and considered essential for foreign buyers.

While you could theoretically handle the paperwork yourself, the complexity of Panama's legal system, language barriers, and the high stakes involved in real estate transactions make professional legal representation practically necessary. Most reputable real estate agents and notaries will insist that foreign buyers use qualified legal counsel to protect all parties from potential liability.

A qualified lawyer handles critical tasks including comprehensive title searches, verification of property boundaries and zoning compliance, review of all contracts and legal documents, coordination with the Public Registry, and ensuring proper transfer of utilities and tax obligations. They also identify potential issues like outstanding liens, unpaid taxes, or zoning violations that could affect your ownership rights.

Legal fees typically range from 1-2.5% of the property value, which is reasonable considering the protection and peace of mind provided. This cost often pays for itself by preventing costly mistakes or identifying issues that could significantly impact the property's value or your ability to use it as intended.

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

Choose lawyers who specialize in real estate transactions, are members of the Panama Bar Association, and have experience working with foreign clients. Many also speak English fluently, which facilitates communication throughout the process.

What are the typical taxes, fees, and extra costs involved in buying and later reselling property?

Total transaction costs for buying property in Panama City typically range from 3-7% of the purchase price, with additional annual carrying costs and resale expenses.

Purchase costs include legal fees (1-2.5% of property value), real estate agent commission paid by seller (typically 5%), notary fees (approximately $500-1,000), Public Registry registration fee (about 2% of declared value), and various government stamps and certificates ($200-500). If financing the purchase, add bank loan origination fees (1-2%) and mandatory property insurance.

Annual property taxes in Panama are among the lowest in the region, with rates based on declared property value: properties valued up to $30,000 are exempt, $30,001-$250,000 are taxed at 0.6%, $250,001-$500,000 at 0.8%, and properties over $500,000 at 1%. Most Panama City condos and homes fall into the lower tax brackets due to conservative government valuations.

When reselling, expect to pay capital gains tax of 5% on the declared sale value (not the profit), plus real estate agent commission of 5%, and legal fees for closing (1-2%). Some properties qualify for tax benefits under "Patrimonio Familiar Tributario" status, which can reduce or eliminate capital gains taxes for primary residences, though this doesn't always transfer to new foreign owners.

Additional ongoing costs include monthly condo fees for apartment buildings ($100-500+ depending on amenities), property insurance ($300-800 annually), and utility setup fees for new connections. Factor these expenses into your investment calculations when evaluating potential returns.

Can foreigners access mortgages in Panama, and if so, what are the rates, conditions, and best tips to secure one?

Foreigners can access mortgages from major Panamanian banks, though conditions are more restrictive than for residents with higher down payments and interest rates.

Major lenders including Banco General, Banistmo, Global Bank, BAC Credomatic, and Scotiabank offer financing to foreign buyers. Typical terms require 30-40% down payment (sometimes up to 50%), finance up to 70% of property value, offer loan terms of 10-20 years, and charge interest rates of 7-9% as of September 2025 (compared to 4.5-7% for residents). Loans must mature before the borrower reaches age 65-70.

1. **Obtain residency status** - Even temporary residency significantly improves loan terms and interest rates2. **Use a specialized mortgage broker** - Find brokers experienced with foreign buyer financing who maintain relationships with multiple banks3. **Prepare comprehensive documentation** - Include tax returns (2-3 years), bank statements, employment verification, credit reports from home country, all translated and apostilled4. **Open a local bank account** - Establish banking relationship 3-6 months before applying, demonstrate income deposits and financial stability5. **Consider co-borrowing** - Adding a Panamanian resident or citizen as co-borrower can substantially improve terms6. **Shop multiple banks** - Terms vary significantly between institutions; some specialize in foreign buyer programs7. **Consider developer financing** - New developments sometimes offer attractive financing terms directly from the builder

Panama's Preferential Interest Rate Law offers subsidized rates for first-time buyers of new homes under $120,000, primarily benefiting residents. Some foreign buyers may qualify if they obtain residency before purchasing.

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 common mistakes and pitfalls foreigners should avoid when buying property in Panama?

The most critical mistake foreign buyers make is purchasing "Right of Possession" (ROP) properties instead of fully titled properties, which have much weaker legal standing.

1. **Buying Right of Possession properties** - ROP properties lack full legal title and offer minimal legal protection; always insist on titled property with clear deed from the Public Registry2. **Ignoring zoning regulations** - Different "Corregimientos" (districts) have unique building codes and land use restrictions that can affect renovation plans or future development3. **Overlooking tax benefit eligibility** - Assuming properties with "Patrimonio Familiar Tributario" status will transfer benefits to new foreign owners; these tax advantages often don't apply to subsequent purchasers4. **Inadequate title research** - Failing to conduct comprehensive title searches can result in purchasing properties with outstanding liens, unpaid taxes, or boundary disputes5. **Misunderstanding beachfront ownership** - Assuming waterfront properties include private beach access; the first 22 meters from high tide mark remains public domain and cannot be privately owned

Other significant pitfalls include not using qualified local legal representation, underestimating total transaction costs and ongoing expenses, rushing the due diligence period without proper property inspection, and failing to verify utilities and infrastructure access in developing areas.

Many foreign buyers also make the mistake of not researching neighborhood development plans, which can dramatically affect future property values. Areas slated for major infrastructure improvements or commercial development may offer significant appreciation potential, while others facing rezoning or increased density could see property values stagnate.

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

Which neighborhoods and areas of Panama City are most popular among foreigners, and why?

El Cangrejo, Bella Vista, and Punta Pacifica are the most popular Panama City neighborhoods among foreign buyers due to their central location, modern amenities, and strong rental demand.

**El Cangrejo** attracts expats and digital nomads with its vibrant, walkable environment combining residential towers with nightlife, restaurants, and coworking spaces. The neighborhood offers excellent rental yields due to high demand from short-term visitors and long-term expat residents. Properties average $2,930 per square meter and show steady 3% annual appreciation.

**Bella Vista** (including Obarrio, Marbella, and Avenida Balboa) provides metropolitan living with easy access to business districts, shopping centers, and cultural attractions. The area's mix of luxury condos and mid-range apartments appeals to diverse foreign buyers, from young professionals to retirees. Proximity to the Cinta Costera waterfront park and bay views command premium prices.

**Punta Pacifica** represents Panama City's luxury market, featuring high-end condominiums with ocean views, world-class amenities, and proximity to the financial district. International buyers are drawn to the prestige factor, security, and potential for capital appreciation. At $4,160 per square meter, it's among the city's most expensive areas but offers the highest quality finishes and services.

**Costa del Este** appeals to families and professionals seeking a planned community environment with modern infrastructure, good schools, and recreational facilities. The area shows strong rental demand from expatriate executives and offers more spacious properties compared to downtown alternatives.

**Casco Viejo** attracts buyers interested in historic charm and cultural significance, being a UNESCO World Heritage site with limited development potential that drives strong capital appreciation.

Where are the best areas for long-term living, rental income, and capital appreciation?

Panama City's core neighborhoods (El Cangrejo, Bella Vista, Punta Pacifica, Costa del Este) offer the best combination of livability, rental income potential, and capital appreciation for foreign investors.

**For Long-term Living:** Punta Pacifica and Costa del Este provide the highest quality of life with modern amenities, security, and international-standard infrastructure. Punta Pacifica offers luxury urban living with ocean views and walkability to business districts, while Costa del Este provides a more suburban feel with family-friendly amenities including international schools, shopping centers, and recreational facilities.

**For Rental Income:** El Cangrejo and Bella Vista generate the strongest rental yields (6-8% gross annually) due to high demand from expats, business travelers, and young professionals. These areas benefit from proximity to business districts, entertainment venues, and metro stations. The constant influx of international visitors and expatriate workers ensures steady occupancy rates year-round.

**For Capital Appreciation:** Casco Viejo leads in price growth (+4% annually) due to its UNESCO status and limited supply of developable land. Punta Pacifica, despite recent market softness (-2% in 2025), remains positioned for long-term appreciation as Panama's premier luxury district. El Cangrejo shows consistent 3% annual growth driven by ongoing gentrification and increased international recognition.

**Alternative Markets:** Beach destinations like Coronado and Pedasí offer good vacation rental potential and more affordable entry points ($1,500-3,500 per square meter). Mountain towns like Boquete attract retirees seeking cooler climates and lower living costs, though these markets have less liquidity than Panama City properties.

What is the current price breakdown of real estate in Panama City and across other key regions?

Panama City remains Central America's most expensive real estate market, with luxury neighborhoods commanding over $4,000 per square meter and showing varied performance across different segments.

Area/Neighborhood	Average Price per m² (USD)	Annual Price Change	Market Characteristics
Casco Viejo	$4,150	+4%	Historic UNESCO site, limited supply, highest appreciation
Punta Pacifica	$4,160	-2%	Luxury condos, ocean views, temporary market adjustment
Costa del Este	$3,685	0%	Planned community, strong rental demand, stable pricing
El Cangrejo	$2,930	+3%	Expat favorite, vibrant lifestyle, consistent growth
San Francisco	$2,720	+2%	Family-oriented, middle to upper-class, emerging area
Panama City (Median Apartment)	$2,483	+0.83%	City-wide average, diverse property types
Panama City (Median House)	$1,603	-3.2%	Detached homes, declining demand vs. condos

The luxury condo market in prime locations continues to outperform other segments, with new developments in Casco Viejo, Punta Pacifica, and Costa del Este commanding premium prices due to superior amenities, views, and locations. Properties in these areas typically feature concierge services, infinity pools, fitness centers, and 24-hour security.

Beach and mountain regions offer more affordable alternatives: Coronado beach properties range $1,500-2,500 per square meter, Bocas del Toro averages $1,200-2,000 per square meter, and mountain towns like Boquete and El Valle range $800-1,500 per square meter. These areas appeal to retirees and vacation home buyers seeking lower entry costs and different lifestyle amenities.

The detached house market shows weakness (-3.2% annually) as buyer preference shifts toward condominiums with amenities and security. This trend reflects urbanization patterns and foreign buyer preferences for low-maintenance properties with professional management.

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. Panama Sovereign - Panama Real Estate Laws Explained
2. Taxes for Expats - Buying Property in Panama Guide
3. Global Property Guide - Panama Buying Guide
4. GLP International Sales - Property Purchase Guide 2025
5. The LatinVestor - Foreigners Buy Land Panama
6. Limitless Legal - Minimum Investment Amounts for Residency
7. Kredium - Getting a Mortgage in Panama as a Foreigner
8. The LatinVestor - Panama City Price Forecasts