Authored by the expert who managed and guided the team behind the Costa Rica Property Pack
Everything you need to know before buying real estate is included in our Costa Rica Property Pack
Costa Rica and Panama both offer strong opportunities for property buyers and investors, with legal security for foreigners and decent long-term growth prospects.
However, these two Central American countries have distinct differences in property prices, financing options, tax implications, and safety conditions that can significantly impact your investment decision. Costa Rica typically offers higher rental yields in tourist zones but comes with higher property prices, while Panama provides more favorable tax structures and stronger infrastructure development.
If you want to go deeper, you can check our pack of documents related to the real estate market in Costa Rica, based on reliable facts and data, not opinions or rumors.
Both Costa Rica and Panama allow foreigners to freely purchase and own property with the same rights as nationals, making them attractive destinations for international investors.
Costa Rica offers higher rental yields (5-8% gross) in tourism zones and stronger appreciation potential (15-20% annually) in select eco-tourism areas, while Panama provides lower entry prices, better financing access, and more favorable tax structures including property tax exemptions for new constructions.
| Factor | Costa Rica | Panama |
|---|---|---|
| Average Property Price (per sqm) | $2,221-$2,896 | $1,804-$4,150 |
| Foreign Ownership Rights | Full ownership (except Maritime Zone) | Full ownership (except 10km from borders) |
| Annual Property Tax | 0.25% | 0-0.7% (often exempt first $120k) |
| Capital Gains Tax | 10-15% | 3-10% |
| Rental Yield Potential | 5-12% | 3-7% |
| Mortgage Access for Foreigners | Limited, high down payment | Better access with residency |
| Monthly Cost of Living | $1,257 (single), $3,047 (family) | $1,277 (single), $3,023 (family) |
What is your budget for buying property in either Costa Rica or Panama?
Your budget will determine which country offers better opportunities and what type of properties you can access.
In Costa Rica, entry-level urban homes start around $100,000-$350,000, while luxury beachfront properties in prime areas like Guanacaste, Central Pacific, and Southern Zone range from $500,000 to over $2 million. As of September 2025, apartments in Guanacaste average $2,896 per square meter and houses $2,221 per square meter.
Panama offers slightly lower entry costs, with urban homes ranging $180,000-$350,000 and luxury properties from $400,000 to $1 million or more. In Panama City, properties average $1,804 per square meter, though upscale neighborhoods like Casco Viejo can reach $4,150 per square meter for off-plan units.
Both countries require additional costs including closing fees (3.5-6% in Costa Rica, 3-4% in Panama), transfer taxes (1.5% in Costa Rica, 2% in Panama), and ongoing annual property taxes (0.25% in Costa Rica, 0-0.7% in Panama with exemptions).
It's something we develop in our Costa Rica property pack.
What are the property prices like in the areas you're considering?
Property prices vary significantly between regions and property types in both countries, with coastal and capital areas commanding premium prices.
Costa Rica's most expensive markets include Manuel Antonio, Tamarindo, and EscazĂş, where luxury condos can exceed $4,000 per square meter. Mid-range markets like Atenas, Grecia, and inland areas of Guanacaste offer properties at $1,500-$2,500 per square meter. Budget-friendly regions include parts of Central Valley and inland areas where prices drop to $800-$1,500 per square meter.
Panama's premium markets center around Panama City's financial district, Casco Viejo, and beachfront areas in Coronado and Buenaventura, with prices reaching $3,000-$4,150 per square meter. Secondary markets like David, Santiago, and interior regions offer more affordable options at $800-$1,500 per square meter.
Both markets experienced moderate correction after post-pandemic speculation, with Costa Rica's coastal markets showing 5-12% annual appreciation forecasted for 2025-2026, while Panama's recovery remains gradual with steady demand from expats and investors.
Are you planning to use the property for personal use, rental income, or a combination of both?
Both countries accommodate all usage types, but Costa Rica generally offers superior rental income potential in tourist zones.
For rental income, Costa Rica's tourism-dependent economy provides strong short-term rental yields of 5-8% gross in standard tourist areas, with peak properties in high-demand vacation zones achieving up to 12% gross returns. Popular rental markets include Tamarindo, Manuel Antonio, Nosara, and parts of Guanacaste Province.
Panama offers more modest rental yields of 3-7%, primarily concentrated in expat-heavy areas and Panama City's business districts. The country's growing retiree community and territorial tax benefits attract long-term residents, supporting stable rental demand.
For personal use, both countries offer excellent lifestyle benefits with Costa Rica favoring eco-tourism and outdoor activities, while Panama provides better urban amenities, infrastructure, and international connectivity through its modern capital and shipping industry.
Combined usage works well in both markets, with many owners using properties personally during peak seasons and renting during off-seasons to offset ownership costs.
What is the current market trend for real estate in Costa Rica and Panama?
Both markets are experiencing moderate recovery and growth after previous periods of correction and speculation.
| Market Indicator | Costa Rica (2025) | Panama (2025) |
|---|---|---|
| Market Direction | Shifting toward buyer's market | Gradual recovery phase |
| Annual Appreciation | 5-12% (tourism areas) | 3-8% (urban centers) |
| Inventory Levels | Increasing selection | Moderate supply |
| Foreign Buyer Activity | Strong (US/Canada) | Steady (global) |
| New Construction | Selective development | Infrastructure-driven growth |
| Price Trends | Stabilizing after correction | Gradual upward movement |
| Investment Hotspots | Guanacaste, Central Pacific | Panama City, Coronado |
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What are the long-term growth prospects for property values in each country?
Both countries demonstrate strong fundamentals supporting long-term property value appreciation, though through different economic drivers.
Costa Rica's growth prospects are supported by stable democratic institutions, a vibrant tourism industry, growing expat and digital nomad demand, and ongoing infrastructure improvements. Long-term appreciation is estimated at 15-20% annually for sustainable, eco-tourism, and remote work-friendly properties in select zones. The country's commitment to environmental conservation and renewable energy attracts environmentally conscious investors.
Panama's growth is underpinned by strong macroeconomic indicators, its territorial tax system, continuous infrastructure investment, and its strategic position as a global shipping hub. High-value infrastructure projects including metro line extensions, new highways, and the proposed high-speed rail system are unlocking secondary markets and supporting steady appreciation over the next several years.
Both countries benefit from political stability, growing middle classes, and increasing foreign investment, though Costa Rica offers higher tourism-driven appreciation potential while Panama provides more diversified economic growth drivers.
Climate change and sea-level rise considerations favor inland and elevated properties in both countries, particularly Costa Rica's Central Valley and Panama's interior highland regions.
What are the legal requirements for foreign property ownership in Costa Rica and Panama?
Both countries offer exceptionally favorable legal frameworks for foreign property ownership with minimal restrictions.
Costa Rica grants foreigners full ownership rights identical to nationals, with no residency requirement for property purchase. The main restriction applies to Maritime Zone properties (200 meters from high tide) and areas near international borders, where foreigners cannot hold direct title but can lease or use corporations. A minimum $150,000 investment qualifies buyers for the Inversionista (Investor) Visa, providing residency benefits.
Panama allows foreigners to purchase titled land throughout the country except within 10 kilometers of international borders and in Indigenous Territories. No residency is required for property purchase, and there are no restrictions on selling, renting, or transferring property. Property purchases of $300,000 or more qualify for the Qualified Investor Visa program.
Both countries require properties to be registered in public registries, with clear title verification through licensed attorneys. Due diligence processes include title searches, property surveys, municipal permit verification, and environmental compliance checks.
Legal closing costs typically run 3.5-6% in Costa Rica and 3-4% in Panama, including attorney fees, notary costs, registration fees, and transfer taxes.
How easy is it to get financing for property in each country as a foreigner?
Financing access varies significantly between the two countries, with Panama generally offering better options for foreign buyers.
Costa Rica's mortgage market for foreigners is limited and challenging. Local banks require extensive documentation, high down payments (25-50% minimum), and charge interest rates of 7.5-10% for bank financing or 12-16% through private lenders. Most foreign buyers opt for cash purchases or arrange financing through their home country banks.
Panama provides better financing access, particularly for buyers with residency status. Foreigners can typically obtain mortgages with 50-60% loan-to-value ratios, though interest rates are higher than local borrowers pay. Terms extend up to 20 years with minimum loan sizes typically around $100,000. Government-backed affordable housing programs also exist.
Alternative financing options in both countries include developer financing, private lending, and international mortgage providers specializing in Latin American properties. Many buyers leverage equity from properties in their home countries or establish local banking relationships to improve financing access.
It's something we develop in our Costa Rica property pack.
What are the tax implications of owning property in Costa Rica versus Panama?
Tax structures differ significantly between the countries, with Panama generally offering more favorable taxation for property owners.
| Tax Type | Costa Rica | Panama |
|---|---|---|
| Transfer Tax | 1.5% | 2% |
| Annual Property Tax | 0.25% | 0-0.7% (first $120k often exempt) |
| Capital Gains Tax | 15% (<2 years), 10% (>2 years) | 10% or 3% on gross sale price |
| Rental Income Tax | 15% (85% of income taxed) | 0-25%, depends on income level |
| Notary/Closing Fees | 3.5-6% total (including transfer) | 3-4% total (legal and admin) |
| Property Tax Exemptions | None for foreigners | 5-20 years for new construction |
| Inheritance Tax | None | None |
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Costa Rica 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.
How stable are the political and economic environments in both countries?
Both countries demonstrate exceptional political and economic stability compared to regional neighbors, making them attractive for long-term property investment.
Costa Rica maintains a long history of democratic governance, abolished its military in 1948, and consistently ranks among the most stable countries in Latin America. The country shows steady economic growth, controlled inflation, and strong institutions. Its commitment to environmental protection and renewable energy attracts sustainable development investments.
Panama benefits from a dollarized economy, robust international banking sector, and strategic position as a global shipping hub through the Panama Canal. The country maintains favorable investment climate policies, territorial taxation systems, and strong macroeconomic indicators. Political transitions occur smoothly through democratic processes.
Both countries maintain excellent relationships with major economies, particularly the United States, and benefit from trade agreements supporting economic stability. Their tourism industries, growing technology sectors, and increasing foreign investment contribute to economic diversification and resilience.
Credit ratings from major agencies reflect this stability, with both countries maintaining investment-grade or near-investment-grade ratings that support property market confidence and international capital flows.
What is the cost of living like in the regions you're considering in each country?
Living costs are comparable between the countries, with slight variations favoring different expense categories.
Costa Rica's average monthly living cost for a single person is $1,257, while families spend approximately $3,047 monthly. Housing costs vary dramatically by region, with Central Valley and secondary cities offering more affordable options than prime beach areas. Utilities, healthcare, and domestic services are generally affordable, though imported goods carry premium prices.
Panama's monthly costs average $1,277 for individuals and $3,023 for families. Panama City commands higher prices for housing and services, but food costs and many consumer goods are cheaper than Costa Rica. The dollarized economy eliminates currency exchange concerns for US-based buyers.
Both countries offer excellent healthcare systems accessible to residents, with Costa Rica's universal healthcare system and Panama's growing medical tourism industry providing quality services at fraction of US costs. Education options include good public schools and international schools in major metropolitan areas.
Transportation costs favor Panama due to better infrastructure, while Costa Rica offers more diverse recreational and eco-tourism activities that may offset higher entertainment expenses.
How is the infrastructure and accessibility in your preferred locations?
Infrastructure quality and accessibility show significant differences between the countries, with Panama generally offering superior development.
Costa Rica's infrastructure is improving, particularly in the Central Valley and major tourism regions, but remote areas often lack robust services. Key highways, digital connectivity, and healthcare services are good in major zones like San José, Tamarindo, and Manuel Antonio. The country is investing in renewable energy infrastructure and improving road networks to tourism destinations.
Panama demonstrates stronger overall infrastructure with modern urban amenities, well-maintained highways, new metro lines in Panama City, and high-speed rail projects under development. The country's position as a global logistics hub ensures excellent connectivity to international markets. Quality hospitals, international schools, and modern shopping centers are readily accessible in urban areas.
Internet and telecommunications services are reliable in both countries' major population centers, supporting the growing digital nomad communities. Both countries offer international airports with good connectivity to North America and Europe.
Utility services including electricity, water, and waste management are generally reliable in developed areas, though Costa Rica experiences occasional power outages during heavy rain seasons.
It's something we develop in our Costa Rica property pack.
What are the safety and security conditions in Costa Rica and Panama for property owners?
Security conditions favor Panama overall, though both countries maintain acceptable safety levels for property owners with proper precautions.
Costa Rica experienced increasing crime rates in 2025, with homicide rates reaching 16.6 per 100,000 inhabitants and several tourist crime hotspots emerging. Property crimes including burglary and theft are concerns in both tourist areas and urban centers. However, violent crime against foreigners remains relatively rare, and many expat communities report feeling secure with proper security measures.
Panama maintains lower violent crime rates and fewer crime hotspots, making it generally safer for foreign property owners. The country's strong relationship with international law enforcement and its role as a global financial center contribute to better security infrastructure. Tourist police and community security programs are well-established in expat areas.
Both countries recommend standard security precautions including gated communities, security systems, and avoiding displays of wealth. Many foreign-owned properties utilize private security services, neighborhood watch programs, and modern security technology.
Property insurance is available and recommended in both countries, covering theft, natural disasters, and liability concerns. Most expat communities maintain active communication networks sharing security information and supporting newcomers.
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.
Both Costa Rica and Panama offer excellent opportunities for foreign property buyers, with each country providing distinct advantages depending on your investment goals and lifestyle preferences.
Costa Rica excels in tourism-driven rental yields, environmental sustainability, and lifestyle appeal, while Panama offers superior infrastructure, more favorable taxation, and better financing access for foreign buyers.
Sources
- Global Property Guide - Costa Rica Price History
- Global Property Guide - Panama Price History
- The LatinVestor - Costa Rica Real Estate for Foreigners
- The LatinVestor - Panama Real Estate for Foreigners
- Casa Solution - Panama Mortgage Guide
- Living Cost - Costa Rica vs Panama Comparison
- The LatinVestor - Buying Property in Costa Rica
- Panama Sovereign - Real Estate Market Forecast
- BrightTax - Panama vs Costa Rica Buying Guide
- Armenian Lawyer - Costa Rica Investment Guide