Buying real estate in Panama?

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Is it a good time to buy a property in Panama?

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

buying property foreigner Panama

Everything you need to know before buying real estate is included in our Panama Property Pack

Panama's real estate market is showing promising signs of recovery in September 2025. Property prices in Panama City have increased by 2.4% year-on-year, with experts forecasting 8-12% appreciation in 2026, making it an attractive time for both investors and those looking to relocate.

If you want to go deeper, you can check our pack of documents related to the real estate market in Panama, based on reliable facts and data, not opinions or rumors.

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, 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.

What are property prices doing right now in Panama?

Property prices in Panama are showing steady growth as of September 2025, with apartment prices in Panama City ranging from USD 1,804 to USD 2,400 per square meter.

Prime neighborhoods like Costa del Este, Punta Pacifica, and Casco Viejo command significantly higher prices, reaching USD 3,200 to USD 4,150 per square meter for luxury and off-plan developments. Houses across the country average around USD 1,399 per square meter, with variations depending on proximity to Panama City and provincial location.

The Panama City property market has experienced a 2.4% year-on-year price increase, representing a cumulative 7.4% rise since late 2021. This growth follows a period of market recovery after previous stagnation, with high-end and expat-oriented segments leading the appreciation trend.

Regional price variations are significant, with coastal areas like Coronado and mountain towns like Boquete showing different pricing dynamics based on local demand from retirees and vacation home buyers.

How have real estate prices in Panama been trending over the last few years?

Panama's real estate market experienced a recovery phase from 2021 to 2023, emerging from what was previously a buyers' market with stagnant pricing.

The year 2024 marked a challenging period with a sharp drop in transaction volumes, particularly affecting lower and middle market segments due to political uncertainty and the expiration of government housing subsidy programs. This created oversupply conditions in affordable and mid-market inventory segments.

As of 2025, the market has entered a modest recovery phase following post-election stabilization and improved macroeconomic conditions. Luxury properties and expat-focused areas have retained their value better throughout this period, while other segments faced more pronounced volatility.

The trend shows clear segmentation in the market, with international buyer segments proving more resilient than domestic buyer segments during uncertain periods. Infrastructure developments, particularly around Metro Line extensions, have created localized price appreciation in specific corridors.

What is the outlook for Panama's housing market in the next 12 to 24 months?

The Panama housing market outlook for 2025-2026 is optimistic, with experts projecting 8-12% price appreciation in Panama City during 2026.

Districts benefiting from new infrastructure developments, particularly those along the Metro Line 3 extension, are expected to see the strongest price growth. Government financing programs targeting affordable housing, effective from January 2026, will likely boost first-time homebuyer activity and drive up entry-level property prices.

Emerging neighborhoods with improved connectivity and well-connected areas are positioned to benefit most from infrastructure investments and renewed buyer interest. The market recovery is expected to continue at a moderate pace rather than experiencing speculative growth.

Preferential interest subsidies scheduled to begin in early 2026 will particularly impact the affordable housing segment, potentially creating upward pressure on prices in this category. Overall market stability is expected to improve as political uncertainty diminishes and economic fundamentals strengthen.

How is the economy in Panama performing at the moment?

Panama's economy is performing robustly as of September 2025, with GDP growth of 5.2-5.6% recorded in Q1 2025.

The economic growth is primarily driven by the transport sector, including significant contributions from the Panama Canal, along with strong performance in commerce, finance, and renewed public and private construction activities. Unemployment has decreased to 7.4% in 2024 and is projected to fall further to 6.5% in 2025.

Inflation remains stable at approximately 2.1%, benefiting from Panama's dollarization policy where the Balboa is pegged 1:1 to the US Dollar. This monetary stability provides significant advantages for both local and international property investors.

The Panama Canal continues to be a major economic driver, contributing substantially to the transport sector's growth. The combination of stable inflation, declining unemployment, and strong GDP growth creates a favorable environment for real estate investment and property value appreciation.

Are interest rates and mortgage conditions favorable for buyers in Panama?

Mortgage conditions in Panama are moderately favorable, with interest rates for residents typically ranging from 5.8% to 6.0%.

Buyer Type Interest Rate Range Down Payment Requirement
Panamanian Residents 5.8% - 6.0% 10% - 20%
Foreign Buyers 6.0% - 8.0% 30% - 50%
First-time Buyers (2026) Subsidized rates available Reduced requirements
Properties under $120k Preferential rates Lower down payments
Luxury Properties Negotiable rates 40% - 50%

Foreign buyers face higher interest rates of 6-8% and stricter terms, including more extensive paperwork and higher down payment requirements of 30-50%. However, obtaining a mortgage as a foreigner is definitely possible with proper documentation and financial verification.

Starting in January 2026, preferential interest subsidies will become available for qualified buyers, particularly benefiting first-time homebuyers and those purchasing properties under $120,000. These government programs are designed to stimulate market activity and make homeownership more accessible.

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investing in real estate in Panama

What are the tax implications and fees for buying property in Panama?

Property purchase taxes and fees in Panama are relatively straightforward, with a 2% transfer tax applied to the registered price or sale price, whichever is higher.

Buyers should budget approximately 3-4% of the purchase price for total closing costs, which include legal fees, notary fees, and registry fees in addition to the transfer tax. Capital gains tax of 10% applies to the profit when selling, or alternatively, 3% of the gross sale price as prepaid income tax, which is the seller's responsibility.

Annual property taxes in Panama are very favorable, with no tax on the first $120,000 of property value, 0.5% tax on values from $120,001 to $700,000, and 0.7% on values above $700,000. Many newer buildings enjoy 5-20 year property tax exemptions, further reducing holding costs.

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

Additional incentives include no taxes on foreign-earned income or dividends for residents, making Panama attractive for international investors seeking favorable tax treatment.

How stable is the legal framework and property ownership system in Panama?

Panama offers one of the most stable and foreigner-friendly legal frameworks for property ownership in Central America, allowing full property rights for foreign buyers.

Foreigners can own titled property with the same legal protections as Panamanian citizens, without any residency requirements or ownership restrictions for most property types. The system strongly favors titled (registered) property over Right of Possession (ROP) land, which carries higher risks and financing difficulties.

Property ownership can be structured through direct ownership, Panamanian corporations, or private foundations, with the latter option particularly useful for estate planning purposes. The legal system provides clear documentation and registration processes through established notary and registry systems.

The main legal restrictions apply to land within 10 kilometers of international borders and the first 22 meters of beach frontage, which remains public domain. These limitations are clearly defined and well-established, providing certainty for buyers about permissible ownership areas.

Are there any government incentives or restrictions on foreign buyers?

Panama maintains minimal restrictions on foreign property buyers while offering several attractive incentives for international investors.

1. **Friendly Nations Visa**: Fast-track residency program for citizens from over 50 qualifying countries, requiring approximately $200,000 minimum property investment2. **Pensionado (Retiree) Visa**: Lifetime residency option requiring $1,000 monthly pension income, reduced to $750 with $100,000+ property purchase3. **Preferential loan programs**: Government-backed financing for new homes under $120,000 with favorable interest rates4. **Tax holidays**: Extended property tax exemptions for new construction projects5. **No foreign income taxes**: Residents pay no taxes on foreign-earned income or dividends

The government actively promotes foreign investment through these visa programs, which directly tie property ownership to residency benefits. These incentives make Panama particularly attractive compared to neighboring countries with more restrictive foreign ownership policies.

Current restrictions are minimal and clearly defined, focusing mainly on border areas and beachfront land, with no broad limitations on foreign ownership in residential and commercial sectors.

infographics rental yields citiesPanama

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 rental yields and investment returns like in Panama right now?

Rental yields in Panama are competitive, with gross yields averaging 6.8-8% in Panama City, making it attractive for income-focused investors.

Smaller apartments and properties in certain districts can achieve higher yields, while beach and mountain areas typically range from 5-9% depending on location and property type. Net yields are generally 1.5-2% lower than gross yields after accounting for property management costs, taxes, and maintenance expenses.

Prime expat and tourism areas maintain strong rental demand, supporting consistent occupancy rates and rental income. Areas like Costa del Este, Punta Pacifica, and Casco Viejo benefit from sustained demand from international tenants and business professionals.

The combination of USD-denominated rents, stable currency, and growing expat population provides a solid foundation for rental income streams. Investment returns benefit from both rental yields and moderate capital appreciation potential in well-selected locations.

How easy is it to sell a property in Panama if I decide to exit later?

Property liquidity in Panama varies significantly by location, with Panama City and established expat areas offering relatively good resale markets.

Prime locations like Panama City, major beach destinations, and mountain retirement communities maintain better liquidity due to consistent buyer demand from both international and domestic purchasers. However, surplus inventory in some condominium segments can extend sale timelines in certain areas.

Sellers are responsible for 2% transfer tax and 10% capital gains tax on profits, with a 3% pre-withholding option available. Having current tax status and proper legal documentation is essential for smooth sale processes and avoiding delays.

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

Working with experienced local real estate professionals and maintaining proper property documentation throughout ownership significantly improves resale efficiency and reduces potential complications during the exit process.

Which areas in Panama are currently considered good opportunities for buyers?

Several areas in Panama offer strong opportunities for property buyers as of September 2025, each catering to different investor profiles and objectives.

Area Key Features Price Trend (2025) Rental Yield
Costa del Este Expat community, limited supply, luxury condos Strong growth 7-8%
Punta Pacifica Luxury development, high demand Strong growth 7-8%
Casco Viejo & San Francisco Historic charm, urban lifestyle, ongoing renovations Strong growth 7-9%
Coronado & Pedasí Beach locations, vacation/expat demand Steady to rapid growth 6-9%
Boquete Mountain location, retiree destination, stable infrastructure Stable 5-6%
Metro Line 3 Corridor Infrastructure development, emerging neighborhoods Expected strong growth 6-8%

Emerging areas along the Metro Line 3 extension offer particular value for buyers seeking medium-term capital appreciation as infrastructure improvements enhance connectivity and desirability.

How does buying property in Panama compare to other countries in the region?

Panama stands out favorably compared to other Central American countries due to its unique combination of legal protections, tax advantages, and economic stability.

Compared to Costa Rica, Panama offers lower annual property taxes (0% on first $120,000 vs. Costa Rica's flat 0.25%), while Costa Rica's average home prices are lower at $1,021 per square meter but with higher ongoing tax obligations. Costa Rica experienced market corrections in 2024-25, particularly in single-family house segments.

Against Colombia, Panama provides significantly less bureaucracy, greater dollarization benefits, and more streamlined processes for foreign buyers, though Colombia has higher local buyer activity in certain segments. Mexico offers a larger, more diverse market but with varying tax structures and generally lower rental yields in luxury segments.

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

Panama's key advantages include full dollarization eliminating currency risk, easy residency pathways tied to real estate investment, exceptionally low annual property taxes, and high rental yields combined with solid GDP growth, making it particularly attractive for foreign real estate investors.

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 Price History
  2. Properstar - Panama House Prices
  3. The LatinVestor - Panama Real Estate Trends
  4. The LatinVestor - Panama Price Forecasts
  5. Gedeth - Panama Economic Landscape 2025
  6. Casa Solution - Panama Economy Growth 2025
  7. Newsroom Panama - GDP Growth Q1 2025
  8. The Panama Link - Mortgage Calculator
  9. Taxes for Expats - Panama Property Guide
  10. Kraemer Law - Panama Property Taxes