How to buy property in Panama as a foreigner?

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.

Can foreigners buy property in Panama the same way locals can, or are there restrictions compared to Panamanian citizens?

Foreigners can buy and own property in Panama with identical legal rights as Panamanian citizens.

The Panamanian constitution grants foreign buyers the same property ownership rights as locals, with full legal protection and the ability to register properties in their individual names. This includes residential properties, commercial buildings, and undeveloped land throughout most of the country.

However, there are two specific geographical restrictions that apply to foreign ownership. Foreigners cannot own land within 10 kilometers of Panama's international borders with Costa Rica and Colombia due to national security considerations. Additionally, the first 22 meters from the high-tide line on all beaches constitutes public domain and cannot be privately owned by anyone, regardless of nationality.

Beyond these border and coastal restrictions, foreign property owners enjoy complete ownership rights including the ability to sell, rent, transfer, or bequeath their properties without additional government approvals. The property registration system provides the same title security and legal protections to foreign owners as it does to Panamanian citizens.

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

Do I need to be a resident or have a visa to buy property in Panama, and if so, what are the requirements?

No residency status or visa is required to purchase property in Panama as a foreigner.

You can buy property in Panama as a tourist, non-resident, or while holding any temporary visa status. The property purchase process is completely separate from immigration requirements, and many foreign buyers complete transactions while visiting Panama on tourist visas or even from their home countries without ever setting foot in Panama.

However, owning property in Panama can qualify you for several residency programs if you choose to pursue them later. The Friendly Nations Visa requires a minimum $200,000 real estate investment, while the Qualified Investor Visa demands $300,000 in property investment before October 2026. These programs offer pathways to permanent residency and eventual citizenship for those seeking long-term relocation.

Many foreign buyers pursue residency after purchasing property for practical reasons including easier banking relationships, simplified tax arrangements, and the ability to stay in Panama for extended periods without visa renewals.

The key advantage is that property ownership comes first, residency second, giving buyers flexibility to test their investment before committing to permanent relocation.

Is it necessary to be physically present in Panama to purchase property, or can it be done remotely?

Physical presence in Panama is not necessary to purchase property, and many foreigners complete transactions entirely remotely.

Remote property purchases are facilitated through a notarized and apostilled power of attorney executed in your home country, which grants a Panamanian lawyer the legal authority to act on your behalf throughout the entire transaction process. This power of attorney must be properly authenticated according to international standards and translated into Spanish by a certified translator.

Most successful remote buyers follow a hybrid approach where they visit Panama initially to view properties and select their preferred location, then return home to complete the legal and financial aspects of the transaction remotely. This allows for personal property inspection while avoiding multiple extended trips to Panama for closing procedures.

Your designated lawyer handles all aspects of the remote closing including document preparation, due diligence verification, fund transfers, signature collection, and property registration with the Public Registry. Modern technology enables virtual document review, video conferences for transaction updates, and secure international wire transfers for payment completion.

The entire remote process typically takes 60-90 days from contract signing to final title registration, similar to in-person transactions.

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

The property buying process in Panama follows these specific steps:1. **Property Research and Selection**: Work with a licensed real estate agent to identify properties matching your criteria and budget range.2. **Property Viewing and Due Diligence**: Inspect properties either in person or through virtual tours, requesting detailed property information including legal status and ownership history.3. **Offer Submission and Negotiation**: Submit a written offer through your agent, negotiate price and terms until reaching mutual agreement with the seller.4. **Promise to Purchase Contract**: Sign a "Promesa de Compraventa" (purchase promise contract) and deposit typically 10% of the purchase price into an escrow account.5. **Legal Verification Process**: Your lawyer conducts comprehensive due diligence including title verification at the Public Registry, boundary surveys, lien searches, and municipal clearance confirmations.6. **Final Contract Preparation**: Prepare the definitive sales contract with all terms, conditions, and closing date specifications.7. **Closing and Title Transfer**: Sign the Public Deed of Sale ("Escritura Pública") before a Panamanian notary, complete final payment, and transfer legal title.8. **Registration and Documentation**: Register the new title with the Public Registry and receive official ownership documentation.Required documents include: valid passport, apostilled birth certificate, proof of funds verification, property survey and appraisal, municipal tax clearance, seller's title certificate, and purchase contract translations.

Is hiring a lawyer mandatory for property transactions in Panama, and what role do they play?

While not legally mandatory, hiring a lawyer for property transactions in Panama is strongly recommended and considered essential for foreign buyers.

Panamanian real estate lawyers provide critical services that protect buyer interests throughout the complex legal process. They conduct comprehensive title searches at the Public Registry to verify clear ownership and identify any liens, encumbrances, or legal disputes affecting the property. They also prepare and review all legal documents, ensuring contracts protect the buyer's rights and comply with Panamanian law.

For foreign buyers specifically, lawyers handle document translations, verify authenticity of foreign documents through apostille processes, and facilitate international wire transfers according to banking regulations. They coordinate with notaries for official document execution and manage property registration with government agencies.

Legal fees typically range from 1% of the property value, a small cost compared to the financial protection they provide. Most experienced lawyers maintain relationships with trusted real estate agents, surveyors, and appraisers, streamlining the entire transaction process.

Given Panama's civil law system and Spanish-language legal requirements, attempting property purchases without qualified legal representation exposes foreign buyers to significant financial and legal risks that far exceed attorney costs.

What are the typical taxes, fees, and hidden costs when buying and later reselling property in Panama?

Cost Category	Rate/Amount	Paid By
Transfer Tax	2% of sales price or cadastral value	Seller (negotiable)
Notary and Registry Fees	0.5-1% of property value	Buyer
Legal Fees	1% of property value	Buyer
Real Estate Commission	3-5% of sales price	Seller
Property Appraisal	$300-800 depending on property	Buyer
Document Translation	$200-500 for required documents	Buyer
Annual Property Tax	0-1% progressive scale	Owner ($0 up to $120,000 exemption)

Total closing costs for buyers typically range from 6-8% of the property purchase price when combining all fees and taxes.Upon resale, sellers face a 10% capital gains tax on profits or an automatic 3% withholding on the gross sale price, with the ability to file for refunds if the withholding exceeds actual tax liability.

Can foreigners get a mortgage in Panama, what are the current rates and conditions, and what tips help in securing one?

Foreigners can obtain mortgages in Panama, though banks typically impose stricter conditions compared to loans for Panamanian citizens.

As of September 2025, mortgage interest rates for foreign borrowers range from 5.5% to 7.5% annually, with most banks requiring 30-50% down payments and limiting financing to 50-70% of the property value. Loan terms typically extend 15-20 years, shorter than mortgages available to residents.

Banks require extensive documentation including verified income statements from your home country, international credit reports, bank statements covering 6-12 months, proof of employment or business ownership, and property appraisals from approved Panamanian valuators. Some banks also require borrowers to maintain local bank accounts and demonstrate ties to Panama through residency or business interests.

Successful mortgage applications benefit from working with banks that have experience serving foreign clients, such as Banco General, BAC International, or Global Bank. Establishing banking relationships before applying improves approval chances, as does obtaining temporary or permanent residency status in Panama.

Many foreign buyers choose cash purchases to avoid mortgage complexities, then potentially refinance later once they establish stronger local banking relationships and residency status.

Which areas in Panama are most popular with foreigners for living, investing, or retiring?

Foreign buyers concentrate their investments in several distinct regions based on lifestyle preferences and investment goals:**Panama City** attracts investors seeking urban amenities, with neighborhoods like San Francisco, El Cangrejo, and Panama Pacifico offering modern high-rise condominiums, proximity to international schools and hospitals, and strong rental markets serving the business community.**Beach Communities** including Coronado, Playa Blanca, and Gorgona appeal to retirees and vacation home buyers seeking coastal living with developed infrastructure, golf courses, and established expat communities within 1-2 hours of Panama City.**Mountain Towns** like Boquete and El Valle provide cooler climates and lower cost of living, attracting North American and European retirees who prefer spring-like weather year-round and active expat social networks.**Emerging Areas** such as Pedasí on the Azuero Peninsula and Las Tablas offer lower property prices and tourism growth potential, though with less developed infrastructure and smaller foreign communities.Each region serves different buyer profiles, with urban areas providing rental income opportunities, beach locations offering lifestyle and vacation rental potential, and mountain communities delivering affordable retirement living with established expat support networks.

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 locations currently offer the best potential for rental yields, tourism demand, and long-term capital appreciation?

Panama City consistently delivers the highest rental yields in Panama's residential market, with apartments generating 6-8% annual returns as of September 2025.

The capital's strong rental market benefits from international business presence, diplomatic missions, and a growing local professional class seeking modern housing. Neighborhoods like San Francisco and El Cangrejo maintain occupancy rates above 90% due to proximity to financial districts and shopping centers.

Beach areas including Coronado and Playa Blanca show strong short-term rental potential driven by weekend tourism from Panama City and international vacation rentals. These markets benefit from Panama's growing tourism sector and proximity to Tocumen International Airport, with vacation rental yields reaching 8-12% during peak seasons.

For long-term appreciation, emerging destinations like Pedasí and Las Tablas offer significant upside potential as tourism infrastructure develops and foreign buyer interest increases. These areas currently feature property prices 40-60% below established beach communities while showing 15-20% annual price increases.

Mountain communities like Boquete provide steady but modest returns primarily through long-term rentals to retirees and remote workers, with appreciation driven by limited developable land and consistent North American buyer demand.

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

What is the latest breakdown of average property prices across Panama City, beach areas, and the interior regions?

Region/Location	Property Type	Average Price Range
Panama City (San Francisco)	Luxury Condos	$2,500-4,000 per sqm
Panama City (El Cangrejo)	Mid-range Apartments	$1,800-2,800 per sqm
Panama City (Casco Viejo)	Historic Properties	$3,000-5,500 per sqm
Coronado Beach	Beachfront Condos	$180,000-600,000+
Playa Blanca	Resort Properties	$220,000-750,000
Boquete	Mountain Homes	$130,000-350,000
El Valle	Retirement Homes	$95,000-280,000
Pedasí	Beach Houses	$85,000-320,000
Interior Towns	Local Properties	$35,000-150,000

As of September 2025, Panama City remains the most expensive market with average prices around $2,055 per square meter, while interior regions offer entry-level opportunities starting around $65,000 for homes and land.

What are the most common mistakes and pitfalls foreigners make when buying property in Panama, and how can they be avoided?

The most dangerous mistake foreign buyers make is purchasing "Right of Possession" (ROP) properties instead of titled land, exposing themselves to significant legal risks and potential total loss of investment.Foreign buyers frequently ignore critical geographical restrictions, attempting to purchase properties within 10 kilometers of international borders or assuming they can own beachfront land within the public domain zone. These transactions are legally invalid and result in forfeited deposits and legal complications.Many buyers fail to conduct proper due diligence, skipping title verification, boundary surveys, and lien searches that reveal existing debts, encumbrances, or ownership disputes. This oversight can result in purchasing properties with hidden legal problems that become the new owner's responsibility.Inadequate budgeting for closing costs catches many foreign buyers unprepared, with total transaction expenses reaching 6-8% of the purchase price including transfer taxes, legal fees, and registration costs. Buyers should budget an additional 10% beyond the purchase price for unexpected expenses and holding costs.Remote buyers sometimes purchase properties sight unseen based solely on photos and descriptions, discovering significant structural problems, location issues, or misrepresented amenities after closing. Personal inspection or trusted representative verification prevents these costly surprises.Finally, many buyers neglect ongoing ownership costs including HOA fees, property taxes, maintenance expenses, and utility connections that can add $200-800 monthly to ownership costs depending on property type and location.

What are the fiscal implications of owning property in Panama as a foreigner, including rental income tax and capital gains tax?

Foreign property owners in Panama face several ongoing tax obligations that vary based on property use and income generation.

Rental income from Panamanian properties is subject to 10-15% taxation on net income after allowable deductions including property management costs, maintenance expenses, insurance premiums, and depreciation allowances. Property owners must file annual tax returns declaring rental income and can deduct legitimate expenses to reduce taxable income.

Capital gains tax applies at 10% on profits when selling property, calculated as the difference between sale price and original purchase price plus improvements. Alternatively, Panama automatically withholds 3% of the gross sale price, with property owners able to file returns to claim refunds if the withholding exceeds actual tax liability.

Annual property tax follows a progressive scale from 0% to 1% of property value, with primary residences receiving complete exemption on the first $120,000 of assessed value. Properties valued above this threshold pay graduated rates up to 1% on amounts exceeding $500,000.

Foreign owners benefit from Panama's territorial tax system, meaning only income generated within Panama faces local taxation. Rental income from properties in other countries or investment income earned abroad remains exempt from Panamanian taxation.

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

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. Global Property Guide - Panama Buying Guide
2. The LatinVestor - Panama Real Estate for Foreigners
3. Panama Sovereign - Real Estate Laws for Foreign Buyers
4. Taxes for Expats - Panama Property Guide
5. Armenian Lawyer - Low Property Tax Countries
6. Limitless Legal - Panama Residency Investment
7. The LatinVestor - Property Panama American
8. LinkedIn - Step by Step Property Buying Guide
9. Casa Solution - Buying Process
10. ReloFirm - Buying Panama Real Estate