Panama City: property buying guide (Sept 2025)

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 TheLatinvestor, 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, Costa del Este, and Punta Pacifica. 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.

What types of property can foreigners legally buy in Panama City?

Foreigners can buy and own any type of titled property in Panama City with the same legal rights as Panamanian citizens.

You can purchase apartments, houses, condominiums, and commercial properties without any nationality or residency requirements. The ownership can be held directly in your personal name, through a Panamanian corporation (Sociedad Anónima), or via a private interest foundation.

However, specific restrictions apply to certain zones and land types. Foreigners cannot own land within 10 kilometers of international borders with Costa Rica or Colombia. Additionally, beachfront properties have limitations since the first 22 meters from the high tide line remains public domain and cannot be privately owned.

Islands and environmentally protected areas, including indigenous comarca territories, may require special permits or have ownership restrictions. Most importantly, avoid "Right of Possession" (ROP) land, as this type lacks formal title documentation and presents significant legal risks for foreign buyers.

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

Do foreigners need a local partner to buy property in Panama City?

No local partner is required for foreigners to buy property in Panama City.

You can purchase and hold real estate directly in your own name with full legal ownership rights. This straightforward approach is common and legally protected under Panamanian law.

However, many legal and tax advisors recommend using a Panamanian corporation or private foundation structure instead of personal ownership. These structures provide better asset protection, more straightforward inheritance processes, and potential tax advantages. A Panamanian corporation costs approximately $300-$600 annually to maintain but offers significant benefits for succession planning and privacy.

The choice between personal ownership and corporate structures depends on your specific circumstances, investment goals, and estate planning needs. Each option provides the same fundamental ownership rights, but corporate structures often prove more advantageous for long-term property investment.

Can buying property in Panama City lead to residency or citizenship?

Yes, purchasing property in Panama City provides clear pathways to both permanent residency and eventual citizenship.

Two main visa programs connect real estate investment to residency status. The Qualified Investor Visa grants permanent residency for investments of $300,000 or more in real estate, with this minimum threshold extended at least through October 2026. The investment must be maintained for five years.

The Friendly Nations Visa offers another route for citizens of designated countries, requiring a minimum $200,000 real estate investment. This program provides temporary residency that can convert to permanent status over time.

Both programs lead to citizenship eligibility after holding permanent residency for five years. The residency-by-investment programs make Panama particularly attractive for investors seeking long-term residency options in Central America.

Importantly, you don't need residency status to buy property initially - the real estate purchase can be your first step toward establishing legal residency in Panama.

Where do foreigners typically buy property in Panama City?

Foreign buyers concentrate in well-developed, safe neighborhoods with modern amenities and strong rental demand.

Neighborhood	Characteristics	Typical Buyer Profile
Punta Pacifica	Luxury high-rises, proximity to hospitals and financial district	High-net-worth investors, retirees
Costa del Este	Modern planned suburb, international schools	Expatriate executives, families
El Cangrejo	Urban, walkable, restaurants and parks	Young professionals, digital nomads
San Francisco	Central location, beach access, major highways	Local and international professionals
Avenida Balboa	Waterfront boulevard, high-end apartments	Luxury investors, ocean view seekers
Casco Viejo	Historic district, UNESCO site, boutique properties	Cultural enthusiasts, short-term rental investors
Marbella	Embassy area, nightlife, central location	Young expats, investment property buyers

What are the steps to buy property in Panama City?

The property buying process in Panama follows a structured nine-step procedure from initial offer to final title registration.

1. **Property Search**: Work with a licensed real estate agent to identify legitimate titled properties that meet your criteria and budget.2. **Property Inspection**: Conduct thorough physical inspection and evaluation, reviewing property boundaries and legal status documentation.3. **Make Offer**: Submit a written purchase offer with typically 5-10% earnest money deposit to demonstrate serious intent.4. **Purchase Agreement**: Sign formal "contrato de compraventa" outlining all terms, conditions, timeline, and contingencies.5. **Due Diligence**: Your attorney conducts comprehensive title search, property verification, and boundary survey over 1-2 months.6. **Financing Arrangement**: Secure cash funds or mortgage financing, though cash payments are more common for foreign buyers.7. **Document Preparation**: Gather all mandatory documents including notarized passport copies, proof of funds, and legal certificates.8. **Closing Process**: Complete transaction at notary office, paying all required taxes and transfer fees.9. **Title Registration**: Register new ownership at Public Registry to secure legal title and complete the ownership transfer.

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

What documents do foreign buyers need in Panama?

Foreign buyers must prepare both mandatory documents and recommended additional paperwork for a smooth transaction.

**Mandatory Documents:**- Notarized and apostilled passport copy- Signed purchase agreement with terms and conditions- Proof of funds demonstrating financial capacity- Legal compliance certificates from home country- Tax compliance documentation- Title registration forms for Public Registry filing**Recommended Additional Documents:**- Power of attorney if purchasing remotely through legal representative- Independent property appraisal report- Comprehensive due diligence reports from qualified attorney- Corporation or foundation establishment documents if using legal structures- Property survey and boundary verification reports

All foreign documents require proper notarization and apostille certification from your home country. The apostille process validates document authenticity for international legal recognition in Panama.

Working with experienced legal counsel ensures all documentation meets Panama's requirements and prevents delays during the closing process.

Can foreigners buy Panama City property remotely?

Yes, foreigners can complete nearly the entire property purchase process from abroad without being physically present in Panama.

Remote purchasing requires granting power of attorney to a trusted local attorney who will represent your interests throughout the transaction. This legal representative can attend viewings, negotiate terms, sign documents, and complete the closing process on your behalf.

All documentation from your home country must be properly notarized and apostilled for international recognition. Virtual property tours, video calls with agents, and digital document review enable remote evaluation of potential purchases.

However, remote buying requires extra caution in selecting reputable legal representation and conducting thorough due diligence. Many successful remote purchases occur, but working with established law firms and real estate professionals becomes even more critical when you cannot personally oversee the process.

What mistakes do foreigners make when buying Panama City property?

Foreign buyers commonly make several costly mistakes that can be easily avoided with proper preparation and professional guidance.

The most serious error involves purchasing "Right of Possession" (ROP) land that lacks formal title documentation, creating significant legal risks and potential ownership disputes. Another frequent mistake is failing to hire an independent real estate attorney for proper due diligence, instead relying solely on developer or agent recommendations.Many buyers underestimate total closing costs and taxes, budgeting only for the purchase price without accounting for the additional 3-6% in fees and taxes. Some foreigners attempt to buy in restricted zones near borders or on beachfront areas without understanding ownership limitations.**Common Pitfalls to Avoid:**- Buying property without clear, registered title- Skipping independent legal representation- Underestimating total transaction costs- Purchasing in ownership-restricted zones- Relying exclusively on seller-provided information- Failing to verify property boundaries and surveys- Not understanding tax implications and exemptions

Successful buyers avoid these pitfalls by hiring reputable attorneys, conducting thorough due diligence, confirming clear title ownership, and maintaining healthy skepticism of deals that seem too good to be true.

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 is expat life like in Panama City?

Panama City offers expatriates a modern, cosmopolitan lifestyle with affordable living costs compared to North American and European capitals.

Monthly living expenses for a couple typically range from $2,000 to $4,000, depending on lifestyle choices and neighborhood selection. The city provides excellent healthcare systems, modern shopping centers, diverse restaurants, and reliable internet infrastructure that supports remote work.

The large expatriate community makes initial integration easier, with English widely spoken in business, real estate, and service sectors. However, learning Spanish significantly improves daily interactions and deeper cultural integration with local Panamanian society.

Climate considerations include year-round tropical heat and humidity, plus a distinct rainy season from May to November. Traffic congestion in central areas can be challenging, but many expats adapt by choosing neighborhoods with good walkability or reliable public transportation access.

Panama City's time zone alignment with North American business hours benefits remote workers, while the stable political environment and dollarized economy provide additional security for long-term expatriate residents.

What are Panama City property market trends and forecasts?

As of September 2025, the Panama City real estate market shows stable growth with strong fundamentals supporting continued demand.

Market Metric	Current Status	2025-2026 Forecast
Rental Yields	5-8% gross annual returns	Stable in prime locations
Average Prices	$2,000-$3,000/m² mid-range areas	Modest 3-5% annual growth
Luxury Market	Higher prices, lower yields	Selective growth in premium areas
Rental Demand	Strong in key neighborhoods	Continued strength from expat growth
New Construction	Moderate supply increases	Balanced with demand growth
Foreign Investment	Steady international buyer interest	Supported by residency programs

The market has stabilized following post-pandemic adjustments, with particular strength in established expat neighborhoods. Rental property demand remains robust, especially for well-located apartments serving the growing international community.

Long-term forecasts suggest continued modest appreciation driven by Panama's economic growth, infrastructure development, and expanding expatriate population attracted by residency-by-investment programs.

What costs and taxes apply to Panama property purchases?

Property buyers in Panama face several mandatory costs and taxes that typically total 3-6% of the purchase price.

Transfer tax represents the largest single cost at 2% of the property's registered value or sale price, whichever is higher. Legal fees typically range from 1-2% of the transaction value, covering attorney services for due diligence, document preparation, and closing representation.

Additional closing costs include notary fees, Public Registry registration charges, and various administrative expenses. If purchasing through a Panamanian corporation or foundation, expect annual maintenance fees of $300-$600 for legal structure administration.

Property taxes in Panama are progressive but often minimal due to generous exemptions. Many new construction projects qualify for 5-20 year property tax exemptions, significantly reducing ongoing ownership costs. Luxury properties above certain thresholds face higher tax rates, but most residential properties benefit from favorable tax treatment.

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

Can foreigners get mortgages in Panama City?

Mortgage financing for foreign buyers is possible but limited, with most expatriate purchasers choosing cash transactions for simplicity and speed.

Major Panamanian banks occasionally offer mortgages to foreigners, but requirements are strict and terms less favorable than local borrowers receive. Foreign buyers typically need minimum 30-40% down payments, compared to 10-20% for Panamanian citizens.

Interest rates for foreign borrowers range from 6-8% or higher, depending on the bank and borrower qualifications. Banks require extensive financial documentation, including several years of tax returns, bank statements, employment verification, and proof of income stability.

The mortgage approval process can take 2-4 months, often longer than cash purchase closings. Many banks prefer borrowers with significant assets in Panama or established business relationships within the country.

Cash purchases remain the preferred and more practical option for most foreign buyers, offering faster closings, stronger negotiating positions, and elimination of complex financing requirements and ongoing currency exchange considerations.

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. TheLatinvestor - Foreigners Buy Land Panama
4. Business Panama - Real Estate FAQs
5. Global Property Guide - Panama Buying Guide
6. Living in Panama - 10K Rule
7. Multilaw - Real Estate Guide Panama
8. Henley Global - Panama Residence Investment
9. NTL Trust - Panama Residency by Investment
10. Golden Visas - Panama