How to buy property in Panama City as a foreigner?

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, David, and Coronado. 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 City as easily as locals, or are there restrictions?

Foreigners can buy nearly any titled property in Panama with almost the same rights as locals, making it one of the most accessible property markets in Latin America.

The key restrictions are minimal and clearly defined. Foreigners cannot own land within 10 kilometers of an international border, and the first 22 meters from the high-tide line of beaches is public domain and cannot be privately owned by anyone. These restrictions are designed to protect national security and preserve public beach access.

You should avoid "Right of Possession" (ROP) properties, which are riskier investments and not officially titled. These properties lack clear legal ownership documentation and can lead to disputes. Instead, focus on properties with proper titles registered in Panama's Public Registry.

As of September 2025, foreign ownership of titled residential and commercial property remains unrestricted in Panama City and most other areas of the country. The government has maintained these favorable policies to attract foreign investment and stimulate economic growth.

This legal framework makes Panama one of the most foreigner-friendly property markets in Central and South America.

Do I need to be a resident or hold a specific visa to purchase real estate in Panama?

No residency or special visas are required to purchase real estate in Panama, making property acquisition accessible to tourists and non-residents.

You can buy property as a tourist on a standard tourist visa, which is typically valid for 90-180 days depending on your nationality. However, holding property may help you qualify for residency programs if you choose to pursue them later.

The Friendly Nations Visa requires a minimum $200,000 investment in real estate or business, while the Qualified Investor Visa requires $300,000-$500,000 minimum investment (this threshold is expected to rise in 2026). These programs offer paths to permanent residency and eventual citizenship for those interested.

Residency status can provide benefits for property ownership, including better mortgage terms from local banks and potential tax advantages. However, residency is not a prerequisite for purchase, and many foreign buyers maintain their properties as non-residents.

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

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

No, you do not need to be physically present in Panama to complete a property purchase, though remote transactions require proper legal documentation.

You can complete the entire process remotely using a notarized and apostilled Power of Attorney for a trusted local representative, typically your Panama-licensed lawyer. This document must be prepared in your home country and properly authenticated with an apostille stamp.

The Power of Attorney should be specific to the property transaction and include detailed instructions about the purchase, including maximum price, property description, and closing timeline. Your attorney will represent you at all signings and handle the registration process.

Remote purchases require additional documentation and verification steps, including certified copies of your passport, proof of funds, and potentially video conference calls for identity verification. Your lawyer will coordinate these requirements.

While remote completion is possible, many buyers prefer to visit Panama at least once to view properties in person and meet their legal representatives before finalizing major purchases.

What are the exact steps involved in buying property as a foreigner, and which documents will I need?

The property purchase process in Panama follows a structured eight-step procedure that typically takes 30-60 days to complete.

The basic steps are:1. Select neighborhood and specific property2. Hire a reputable real estate agent and legal firm3. Make an offer and negotiate terms4. Sign the Promise to Purchase agreement and pay deposit (typically 10% of purchase price)5. Conduct due diligence including title search and checks for liens or encumbrances6. Execute the Final Sale Agreement (Escritura Pública), which must be notarized and registered7. Pay all closing costs and registration fees8. Register ownership transfer with Panama's Public Registry

Required documents include your valid passport with notarized copies, proof of funds through recent bank statements, and certified translations if your documents are not in Spanish. You'll also need a title search report, the sale and purchase contract, municipal tax clearance certificate, and property survey and compliance documents that may vary by location.

Additional documentation may be required depending on the property type and location, including environmental clearances for coastal properties or zoning compliance certificates for certain neighborhoods.

Your attorney will coordinate most document preparation and ensure all legal requirements are met throughout the process.

Am I legally required to hire a lawyer, or can I handle the transaction on my own?

Yes, a Panama-licensed attorney is required by law for all property transactions in Panama, making legal representation mandatory rather than optional.

Unlike many countries that use title companies, Panama requires attorneys to handle contract drafting, title review, and sale registration. This legal requirement protects buyers by ensuring proper due diligence and compliance with local property laws.

If you're buying directly from a developer, their lawyer may handle the transaction paperwork, but you should still have independent legal representation for due diligence and to protect your interests. Developer attorneys represent the seller's interests, not yours.

Legal fees typically range from $2,000 to $5,000 depending on property value and transaction complexity. This cost covers title searches, contract preparation, registration, and legal advice throughout the process.

Choose an attorney with specific experience in foreign buyer transactions and fluency in your language to ensure clear communication throughout the process.

Which neighborhoods in Panama City are most popular with foreigners, and why?

Six neighborhoods in Panama City consistently attract the highest concentrations of foreign buyers and expat residents, each offering distinct advantages for different lifestyle preferences.

1. **Costa del Este** - Modern, planned community with luxury living standards, high international demand, strong rental yields, upscale amenities, and excellent security systems2. **San Francisco** - Residential and family-friendly area near parks, cafes, and international schools, offering a quieter urban lifestyle3. **Clayton** - Leafy and quiet neighborhood near the City of Knowledge, embassies, and international schools, particularly popular with diplomatic families4. **El Cangrejo & Obarrio (Bella Vista)** - Urban and walkable areas with active expat communities, vibrant nightlife, central location, and strong demand for long-term rentals5. **Punta Pacifica** - Waterfront luxury district with high-end condos, proximity to top hospitals, shopping malls, and business districts6. **Casco Viejo** - UNESCO-listed old town featuring boutique apartments, strong tourism numbers, and the highest price appreciation rates in the city

These neighborhoods offer different investment profiles, from Costa del Este's family-oriented stability to Casco Viejo's tourism-driven appreciation potential. Most feature established expat communities, English-speaking services, and international amenities.

Location choice should align with your primary goals, whether seeking rental income, capital appreciation, or personal residence with specific lifestyle preferences.

What are the best areas to invest in for living, rental income, or long-term capital appreciation?

The best investment areas in Panama City vary significantly based on your primary objectives, with different neighborhoods excelling in rental yields, capital appreciation, or livability factors.

Area	Avg. Price/m²	Annual Growth	Livability	Rental Yield	Tourism Impact	Investment Profile
Costa del Este	$3,685	Stable	Excellent	6-8%	High	Planned, family-friendly
Casco Viejo	$4,150	+4%	High	6-8%	High	Historic, limited inventory
Punta Pacifica	$4,160	-2%	High	6-8%	High	Luxury, waterfront
San Francisco	$2,720	+2%	High	6-7%	Medium	Green spaces, residential
El Cangrejo	$2,930	+3%	High	6-7%	Medium	Walkable, urban

Costa del Este and El Cangrejo/Bella Vista are best for rental yield and comfortable living, offering strong tenant demand and established rental markets. Casco Viejo and Punta Pacifica retain the highest capital appreciation potential, though Punta Pacifica has seen recent price corrections.

For pure investment returns, focus on Costa del Este for stability or Casco Viejo for growth potential. For personal residence with rental income potential, San Francisco and El Cangrejo offer the best balance of livability and returns.

How do property prices break down across Panama City and other key regions of the country?

Property prices in Panama City vary significantly by neighborhood and property type, with apartment prices ranging from $2,500 to $4,500 per square meter as of September 2025.

Panama City apartments have a median price of $2,483 per square meter, with luxury condos reaching up to $4,500 per square meter in premium locations. Prime Pacific promenade apartments cost approximately $2,500 per square meter for resale units and $3,000-$4,000 per square meter for new construction.

Detached houses in Panama City average around $1,603 per square meter, reflecting lower demand compared to apartments and recent price declines in the single-family home market. The apartment market remains stronger due to lifestyle preferences and rental demand.

Other popular regions include Coronado for beach properties, Boquete for mountain retreats, and Pedasí for coastal living, with properties starting from $100,000 to $600,000 depending on size, location, and amenities. These markets offer different investment profiles and lifestyle benefits compared to Panama City.

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

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.

Are mortgages available to foreigners, and if so, what rates, conditions, and strategies help secure one?

Mortgages are available to foreigners from major Panamanian banks, though terms are typically less favorable than those offered to residents.

Major banks including Banco General, Banistmo, BAC, and Global Bank offer foreign buyer mortgages with 50-70% loan-to-value ratios, requiring 30-40% down payments. Maximum terms are typically 15-20 years with interest rates ranging from 7-9%, which is higher than rates offered to Panamanian residents.

Required documentation includes your passport, comprehensive financial statements, bank references from your home country, credit reports, and all paperwork must be translated into Spanish and properly apostilled. The documentation process can take 60-90 days for approval.

Strategies to improve your chances include obtaining residency status first (which significantly improves terms), making larger down payments, maintaining a local bank account, and working with mortgage brokers who specialize in foreign buyer transactions. Some buyers also consider seller financing as an alternative to traditional mortgages.

Pre-approval is recommended before property hunting, as it strengthens your negotiating position and speeds the closing process once you find a suitable property.

What taxes, fees, and closing costs should I expect when buying, holding, renting out, and eventually reselling a property?

Property transaction costs in Panama are structured across multiple phases, from initial purchase through ongoing ownership and eventual resale.

Closing costs typically range from 3-5% of the property value and include legal fees, notary services, registration fees, inspection costs, and broker commissions. For a $300,000 property, registration fees alone cost approximately $1,500, with buyers responsible for most closing and registration expenses.

Property taxes include an exemption for the first $120,000 of value for primary residences, with 0.5-1% annual tax on the excess value. Rental income is taxed at 12% in Panama, and quarterly property taxes must be current for any sale to proceed.

Resale costs for sellers include a 2% transfer tax (calculated on the higher of sale price or registered value), a 3% advance property value tax, and capital gains tax options of either 10% on profit or 3% on sale value/cadastral value. These costs can significantly impact net proceeds from property sales.

Additional ongoing costs include property management fees if renting, homeowners association fees for condominiums, and basic utilities and maintenance expenses.

What are the main fiscal implications for foreigners who own property in Panama, both locally and in their home country?

Panama applies territorial taxation, meaning only income generated within Panama is subject to local taxes, but foreign property owners must also consider tax obligations in their home countries.

Rental income from Panama properties is taxable locally at 12%, regardless of where you live or hold citizenship. This income must be declared annually to Panamanian tax authorities, and property owners are responsible for maintaining proper documentation of rental income and expenses.

Foreign residents and citizens must also consider tax obligations in their home country on both rental income and capital gains from Panama property sales. Tax treaties may provide some relief, but most countries require reporting of foreign rental income and property ownership.

US citizens face particular complexity with IRS reporting requirements for foreign property ownership, rental income, and capital gains. Canadian and EU citizens also have specific reporting obligations that vary by country of citizenship and residence.

Self-directed IRA or 401(k) purchases are possible under strict IRS regulations, but require specialized legal and tax advice to ensure compliance. Consult with cross-border tax experts familiar with both Panama and your home country requirements before making purchase decisions.

What are the most common mistakes or pitfalls foreigners face when buying property in Panama, and how can I avoid them?

The most expensive mistake foreign buyers make is trying to navigate the Panama property market without proper professional representation, often leading to overpaying or legal complications.

Common pitfalls include:1. **Attempting to "go solo"** without reputable real estate agents and lawyers, resulting in overpayment and legal risks2. **Not verifying title or finca number** properly, creating risk of title disputes and ownership challenges3. **Buying risky Right of Possession (ROP) land** instead of officially titled properties with clear legal ownership4. **Ignoring local zoning laws** and the "Corregimientos" subdivision system, where regulations vary significantly by area5. **Underestimating due diligence requirements** and skipping environmental, legal, or tax clearance checks

Misunderstanding tax obligations in both Panama and your home country can lead to unexpected costs and compliance issues. Always seek qualified legal and tax advice for both jurisdictions before completing purchases.

The most successful foreign buyers work with established professionals, conduct thorough due diligence, verify all legal documentation, and understand local market conditions before making offers. Investing in professional representation pays for itself through avoided mistakes and better negotiation outcomes.

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. Taxes for Expats - Panama Property Guide
3. The LatinVestor - Panama Real Estate for Foreigners
4. Limitless Legal - Panama Residency Investment
5. The LatinVestor - Foreigners Buying Land in Panama
6. Limitless Legal - Real Estate Investment Residency
7. YB Case - Property Purchase Process
8. Casa Solution - Buying Process
9. Choose Panama - Property Buying Guide
10. Expat-tations - Real Estate Professional Benefits