Panama: property buying guide (Sept 2025)

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 actually buy property in Panama, and are there any restrictions on what they can or can't purchase?

Yes, foreigners can legally buy property in Panama with nearly identical rights to local citizens.

The Panamanian government actively encourages foreign investment in real estate, and you face very few restrictions compared to other Latin American countries. You can own condos, houses, apartments, and even certain islands with proper approval.

However, there are three key restrictions you need to know about. First, foreigners cannot own land within 10 kilometers of international borders with Costa Rica or Colombia for national security reasons. Second, the first 22 meters (approximately 72 feet) from the high-tide line on beaches remains public domain and cannot be privately owned by anyone. Third, you should avoid "Right of Possession" (ROP) properties, which lack formal title and carry significant legal risks including potential disputes over ownership.

Beyond these limitations, you can purchase unlimited quantities of titled properties throughout Panama. As of September 2025, there are no caps on the number or value of properties you can own as a foreigner.

The process is straightforward and transparent, with the same legal protections available to Panamanian citizens.

Where do foreigners usually buy property in Panama, and what are the most popular areas for expats and investors?

Panama City dominates foreign property purchases, representing the largest concentration of expat and investor activity in the country.

Within Panama City, the most sought-after neighborhoods include Casco Viejo (the historic colonial district), Costa del Este (modern high-rises with ocean views), Punta Pacifica (luxury waterfront living), El Cangrejo (central business district proximity), and San Francisco (established residential area with good amenities). These areas offer urban convenience, modern infrastructure, and strong rental demand from both locals and expats.

Coastal and beach areas rank second in popularity, with Coronado leading as the premier beach destination for foreign buyers. Other Pacific coast locations like Playa Bonita and Playa Blanca attract vacation home buyers, retirees, and rental property investors seeking beachfront or near-beach properties.

Mountain regions, particularly Boquete, draw significant expat interest for permanent relocation and retirement. The cooler climate, scenic beauty, and established expat community make it especially popular with North American retirees seeking a lower cost of living.

Bocas del Toro on the Caribbean coast attracts buyers interested in island living, vibrant local culture, and unique beachfront properties, though this represents a smaller segment of the foreign buyer market compared to Panama City and Pacific coast areas.

What are the average property prices and rental yields in Panama right now, and how do they compare by location?

Location	Average Price Range (USD)	Price per Sqm	Gross Rental Yields	Monthly Rent (1-2BR)
Panama City Apartments	$150,000 - $400,000	$2,055/sqm	6.8% - 7.8%	$1,550 - $1,600
Coronado Beachfront	$180,000 - $600,000+	Varies by proximity	5.5% - 6.5%	$2,000 - $2,500
Panama City Luxury	$400,000 - $800,000+	$2,500 - $3,500/sqm	4.5% - 5.5%	$2,500 - $4,000
Boquete Mountains	$200,000 - $350,000	$1,500 - $2,200/sqm	5% - 6%	$1,200 - $1,800
Bocas del Toro	$100,000 - $400,000	$1,200 - $2,000/sqm	6% - 7%	$800 - $1,500
Other Pacific Beaches	$120,000 - $450,000	$1,400 - $2,200/sqm	5.5% - 6.5%	$1,200 - $2,200

What are the total costs, fees, and taxes involved in buying property in Panama, both upfront and ongoing?

Total upfront costs typically range from 3% to 5% of the property purchase price, not including your down payment if financing.

The largest upfront cost is the transfer tax at 2% of either the sale price or cadastral value, whichever is higher. Legal fees range from 0.5% to 1% of the purchase price, while notary fees add another 0.1% to 0.25%. Property registration costs 0.2% to 0.3% of the purchase price. Additional costs include appraisal fees starting at $300, surveys ranging from $150 to $1,000 if needed, and real estate agent commissions of 5% to 7% typically paid by the seller.

If you're using mortgage financing, expect to pay 10% to 30% down plus bank fees ranging from 0.25% to 1% of the loan amount. Mortgage approval and processing can take 30 to 45 days.

For ongoing costs, property taxes offer significant advantages. Primary residences are completely exempt up to $120,000 in value. Properties valued from $120,001 to $700,000 pay 0.5% annually, while properties above $700,000 pay 0.7% on the excess. New construction may qualify for 5 to 20-year tax exemptions. HOA or condo fees typically cost $1.50 to $2.00 per square meter monthly. Property insurance runs approximately 0.1% of property value annually, and if you rent out the property, management fees range from 10% to 15% of rental income.

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

Can foreigners buy property in cash, and if so, is it the most common method?

Yes, foreigners can absolutely purchase property in Panama with cash, and it's actually a very common and preferred method.

Cash purchases offer several advantages in the Panamanian market. Sellers often provide discounts or better terms for cash buyers since it eliminates financing contingencies and speeds up the closing process. The transaction becomes much simpler without mortgage approval requirements, bank appraisals, or financing delays.

Cash purchases are especially popular among retirees, lifestyle buyers relocating to Panama, and investors who want to avoid the complexities of international mortgage financing. Many foreign buyers find it easier to liquidate assets in their home country rather than navigate Panama's mortgage requirements.

The process for cash purchases is straightforward: you'll need to demonstrate proof of funds for anti-money laundering compliance, but otherwise the transaction proceeds directly to due diligence, contract signing, and closing without the 30-45 day mortgage approval timeline.

While exact statistics aren't publicly available, real estate professionals report that cash purchases represent a significant majority of foreign buyer transactions, particularly in the luxury and vacation home segments.

Is mortgage financing available for foreigners, what are the typical rates and conditions, and what type of buyer usually qualifies?

Mortgage financing is available for foreigners in Panama, but with stricter terms and higher requirements compared to local buyers.

You'll need to make a down payment of 30% to 40%, and sometimes up to 50% depending on the lender and your profile. Interest rates for foreigners typically range from 7% to 9%, which is higher than rates offered to Panamanian residents. Loan terms are generally limited to 15 to 20 years, and most banks require the mortgage to mature by the time you reach age 65 to 70.

The major banks offering mortgages to foreigners include Banco General, Banistmo, BAC Credomatic, and Scotiabank. Each has different requirements and approval criteria, so it's worth comparing options through a local mortgage broker or attorney.

The buyers who typically qualify for mortgages are those with Panamanian residency status, higher down payments, well-documented and stable foreign income, and established local banking relationships. Families relocating to Panama for work, investors with substantial assets, and expats with proven income streams have the best approval chances. The approval process typically takes 30 to 45 days and requires extensive documentation of your financial situation.

Many foreign buyers choose cash purchases to avoid these complications, but financing can be a viable option if you prefer to preserve liquidity or leverage your investment.

What documents are required to buy property in Panama, and which ones are mandatory versus optional?

The mandatory documents required for every property purchase in Panama include your passport as identification, a signed sales contract between buyer and seller, and an updated Certificate from the Public Registry proving current ownership and title status.

You'll also need a Certificate of No Encumbrances showing the property has no liens or outstanding debts, and a notarized public deed signed before a Panamanian notary to make the transaction legally binding. If you're purchasing property as part of a residency application, you'll need an investment and economic stability affidavit demonstrating your financial capacity.

Optional but recommended documents include a fiscal appraisal certificate providing an official government property valuation, which helps ensure you're paying fair market value. A cadastral plan showing the exact land boundaries and parcel information is valuable for larger properties or lots. Certified Spanish translations of any foreign documents may be required if your original paperwork isn't in Spanish.

For due diligence purposes, you should also obtain proof of funds documentation for anti-money laundering compliance, recent utility bills showing current service status, and any HOA or building financial statements for condominiums or managed properties.

Your attorney will guide you through gathering these documents and ensure everything is properly prepared for the transaction. Most documents can be obtained while you're outside Panama if you're completing the purchase remotely.

Can the purchase process be completed without being physically present in the country, and if yes, how?

Yes, you can complete the entire property purchase process in Panama without being physically present in the country.

The key to remote purchasing is granting a power of attorney (POA) to a qualified Panamanian attorney who will act on your behalf throughout the transaction. This POA must be properly notarized and apostilled in your home country before being submitted to Panamanian authorities.

Your attorney will handle all aspects of the purchase including conducting due diligence, reviewing contracts, coordinating inspections, managing the closing process, and registering the property in your name at the Public Registry. Digital document signing and electronic communication make remote coordination feasible for most steps of the process.

You can review properties through virtual tours, video calls with agents, and detailed photo documentation. Many buyers visit Panama initially to view properties and select their purchase, then complete the actual buying process remotely from their home country.

Fund transfers can be handled through international wire transfers directly to escrow accounts or the seller, with your attorney overseeing the timing and proper distribution of funds. The entire remote process typically takes the same 30-60 days as an in-person purchase, depending on financing and due diligence complexity.

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 the step-by-step process for a foreigner to buy property in Panama from start to finish?

1. **Property research and selection**: Work with a qualified real estate agent to identify properties matching your criteria and budget. Consider visiting Panama to view properties in person or arrange detailed virtual tours.2. **Submit offer and negotiate terms**: Present a formal offer through your agent, negotiate the purchase price, closing timeline, and any contingencies for inspections or financing.3. **Sign Promise to Purchase contract**: Execute a preliminary contract outlining the agreed terms, which may require an earnest money deposit of 5-10% of the purchase price held in escrow.4. **Conduct comprehensive due diligence**: Your attorney performs title searches, verifies ownership history, checks for liens or encumbrances, orders surveys if needed, and obtains fiscal appraisals for property valuation.5. **Secure financing if applicable**: Apply for mortgage pre-approval, submit required documentation, and complete the bank's appraisal and underwriting process, which takes 30-45 days.6. **Open local bank account**: Establish a Panamanian bank account for fund transfers, utility payments, and ongoing property expenses, which is required for mortgage financing.7. **Finalize purchase contract**: Review and sign the definitive sales contract incorporating all due diligence findings and financing terms.8. **Transfer funds and close**: Wire purchase funds to escrow or directly to the seller, sign the final notarized deed, and complete all closing documentation.9. **Register ownership**: Your attorney registers the property in your name at the Public Registry, making you the legal owner with full title protection.10. **Complete post-closing tasks**: Pay all transfer taxes and fees, establish utility accounts, arrange property insurance, and set up HOA accounts if applicable.

What residency or citizenship options, if any, come with buying property in Panama?

Real estate investment in Panama can qualify you for several residency visa options, but does not automatically grant citizenship.

The Friendly Nations Visa allows citizens of qualifying countries (including the US, Canada, and most European nations) to obtain permanent residency with a minimum real estate investment of $200,000. This visa provides immediate permanent residency status and work authorization in Panama.

The Qualified Investor Visa requires a higher investment threshold of $300,000 to $500,000 in real estate, depending on current program requirements as of September 2025. This visa also leads directly to permanent residency and offers certain tax advantages for qualifying investors.

Both visa programs require you to maintain the property investment for the duration of your residency and provide proof of economic solvency beyond the real estate purchase. You'll also need to spend a minimum amount of time in Panama each year to maintain residency status.

After holding permanent residency for five consecutive years, you become eligible to apply for Panamanian citizenship through naturalization. The citizenship process requires demonstrating ties to Panama, basic Spanish language proficiency, and continued compliance with residency requirements.

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

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

The most dangerous mistake is purchasing untitled land or "Right of Possession" (ROP) properties, which lack formal legal title and can result in complete loss of your investment.

Many foreigners skip proper due diligence, failing to conduct thorough title searches, lien checks, or verification of development permits. Always hire an independent attorney who represents only your interests, not a lawyer recommended by the seller or real estate agent, to avoid conflicts of interest.

Underestimating total ownership costs is another common error. Factor in all closing costs (3-5% of purchase price), ongoing HOA fees, property taxes, insurance, and maintenance expenses when calculating your budget. Don't rely solely on verbal promises about fees or services.

In oversupplied luxury markets, particularly high-end Panama City condos, many buyers overpay relative to rental income potential. Research comparable sales data and rental rates thoroughly before making offers, especially in areas with significant new construction.

Failing to understand HOA rules, building financial health, and management quality can lead to unexpected costs and restrictions. Review HOA financial statements, building reserves, and regulations before purchasing any condo or managed property.

Finally, many buyers rush the process without spending adequate time researching neighborhoods, commute times, amenities, and long-term development plans that could affect property values and quality of life.

What is life like as an expat property owner in Panama, and what is the long-term forecast for the real estate market there?

Expat property owners in Panama enjoy a diverse and comfortable lifestyle supported by modern infrastructure, the convenience of US dollar transactions, and well-established international communities.

In Panama City, you'll have access to world-class dining, shopping, nightlife, and cultural amenities comparable to major North American cities, plus excellent healthcare facilities and international schools. Beach areas like Coronado offer relaxed coastal living with golf courses, beach clubs, and resort-style amenities, while mountain locations like Boquete provide cooler climates, scenic beauty, and outdoor recreation opportunities.

The expat community is well-developed throughout Panama, with English-speaking services, international social groups, and established support networks for newcomers. Banking, legal, and healthcare services commonly accommodate English speakers, and many businesses cater specifically to expat needs.

As of September 2025, the long-term real estate market outlook remains stable and positive. Property prices show steady appreciation in mid-market and suburban segments, while rental yields maintain strong performance at 6-8% nationally. Panama City's continued economic growth, infrastructure development, and expanding expat population support sustained housing demand.

However, luxury segments face some oversupply challenges with slower rental absorption rates, suggesting more selective opportunities for high-end buyers. The government's continued focus on foreign investment, political stability, and Panama's strategic position as a regional business hub support long-term market fundamentals.

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. YB Case - Real Estate Services Panama
3. The LatinVestor - Panama Real Estate for Foreigners
4. Living in Panama - 10K Rule
5. Expat-tations - Panama Real Estate Q1 2025 Trends
6. Limitless Legal - Best Areas to Invest Panama 2025
7. Global Property Guide - Panama Price History
8. Ingwe - Dubai vs Panama ROI Comparison
9. Taxes for Expats - Panama Property Guide
10. The LatinVestor - Panama Property for Foreigners