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
Panama stands out as one of the most foreigner-friendly real estate markets in Latin America.
Whether you're looking for a retirement haven, an investment property, or a vacation home, Panama offers strong property rights, minimal restrictions, and diverse opportunities across beach towns, mountain retreats, and urban centers.
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.
Foreigners can legally buy and own property in Panama with the same rights as citizens, except within 10km of borders and 22m from high tide lines.
No residency or special permits are required to purchase property, and the entire transaction can be handled remotely through power of attorney.
| Aspect | Key Information |
|---|---|
| Foreign Ownership Rights | Same as citizens, except within 10km of borders and 22m from high tide line |
| Residency Required | No - can buy without visa or residency |
| Remote Purchase | Yes - through power of attorney |
| Total Upfront Costs | 3-7% of purchase price (legal fees, taxes, registration) |
| Property Tax | Exempt up to $120,000 for primary residence |
| Mortgage Availability | Yes - 30-40% down, 7-9% interest rates |
| Capital Gains Tax | 10% on profit plus 5% withholding at sale |
| Best Investment Areas | Panama City, Coronado, Boquete, Bocas del Toro |
| Average Prices (2025) | $1,200-$3,500 per sqm depending on location |
| Legal Requirements | Must use Panamanian lawyer and notary |
| Common Pitfalls | Untitled property, inflated prices, skipping due diligence |
| Market Outlook | 5-10% annual appreciation in prime areas |
Can foreigners legally own property in Panama, and what restrictions exist?
Yes, foreigners can legally buy and own property in Panama with virtually the same rights as Panamanian citizens.
Panama's constitution protects private property ownership regardless of nationality, making it one of the most open real estate markets in the region. The government has created a welcoming environment for international buyers to stimulate economic growth and development.
The only restrictions are that you cannot own titled property within 10 kilometers of Panama's borders with Costa Rica or Colombia, and the first 22 meters from the high tide line on all beaches is public domain and cannot be privately owned. No restrictions exist on property type, value, or quantity you can own.
Beyond these limitations, foreigners enjoy full property rights including the ability to sell, rent, inherit, and mortgage their properties just like local citizens. This level of protection and equality makes Panama particularly attractive for international real estate investment.
The legal framework is transparent and well-established, providing confidence for foreign buyers.
Do I need residency or a special permit to buy property?
No, you don't need residency, a visa, or any special permit to purchase or own real estate in Panama.
You can buy property as a tourist with just your passport. This makes Panama exceptionally accessible for international buyers compared to many other countries that require residency or reciprocity agreements. The process is straightforward and doesn't involve bureaucratic hurdles that often complicate foreign property purchases elsewhere.
However, owning property can help you qualify for residency if you decide to live in Panama long-term. The Friendly Nations Visa requires a minimum $200,000 property investment, while the Qualified Investor Visa requires $300,000-$500,000 depending on location. These programs offer pathways to permanent residency and eventual citizenship if desired.
Many buyers purchase property first as an investment or vacation home, then later use their ownership to support a residency application when they're ready to relocate.
Must I be physically present in Panama to complete the purchase?
You don't need to be physically present in Panama to complete a property purchase.
The entire transaction can be handled remotely by granting power of attorney to a Panamanian lawyer or trusted representative. This legal document allows them to sign contracts and complete the registration process on your behalf. Many international buyers successfully purchase properties without ever setting foot in Panama during the transaction process.
However, visiting Panama to inspect properties personally is strongly recommended. Real estate photos can be deceiving, and understanding the neighborhood, local amenities, and property condition requires firsthand observation. If you can't visit, hire a property inspector or have someone you trust examine the property thoroughly before committing to purchase.
The power of attorney process is secure when working with reputable lawyers who specialize in real estate transactions.
It's something we develop in our Panama property pack.
What's the exact step-by-step process and required documents?
The property purchase process in Panama follows a structured sequence that protects both buyers and sellers.
First, you'll search for properties and work with a reputable real estate agent to find suitable options. Once you've identified a property, you'll make an offer and negotiate terms. Next, you must hire a Panamanian lawyer who will draft a Promise to Buy/Sell Contract, at which point you'll pay a 10% deposit.
| Step | Action Required | Timeline |
|---|---|---|
| Property Search | Research areas and work with agent | Variable |
| Make Offer | Negotiate price and terms | 1-3 days |
| Hire Lawyer | Essential for protecting interests | Immediate |
| Promise Contract | Sign and pay 10% deposit | 3-5 days |
| Due Diligence | Lawyer verifies title, checks liens | 30-60 days |
| Secure Financing | Apply for mortgage if needed | 30-45 days |
| Final Agreement | Sign before notary | 1 day |
| Transfer Funds | Through escrow or certified check | 1-3 days |
| Register Title | At Public Registry | 15-30 days |
Required documents include your valid passport plus a second form of ID, proof of funds through bank statements, the purchase contract, property title and survey documents, tax clearance certificate from the seller, and power of attorney if buying remotely.
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Is hiring a lawyer required, and how do I find a trustworthy one?
Yes, hiring a Panamanian lawyer is legally required for real estate transactions.
The lawyer drafts contracts, conducts due diligence, and ensures proper registration. A public notary must also authenticate the transaction - often the same person serves both roles. This dual requirement protects buyers by ensuring professional oversight of the legal aspects and proper documentation.
Finding a trustworthy lawyer requires careful vetting. Ask for referrals from reputable real estate agents who work regularly with foreign buyers. Check the Panama Bar Association for licensed attorneys specializing in real estate. Look for lawyers with expat clients who understand the unique needs of foreign buyers. Read online reviews and ask for client references to verify their track record.
Expect to pay $500-$6,000 in legal fees, typically 1-2% of the purchase price. This investment in proper legal representation can save you from costly mistakes and ensure a smooth transaction.
Never use the seller's lawyer to represent you, as this creates a conflict of interest.
What are all the costs involved in buying property?
Understanding the complete cost structure helps you budget accurately for your Panama property purchase.
Upfront costs include legal and notary fees ranging from $500-$6,000 (typically 1-2% of purchase price), title transfer tax at 2% of sale price or cadastral value, registration fees around 0.3% of sale price, property appraisal at $300+, and land survey if needed at $150-$1,000. If financing, you'll need a 10-30% down payment plus bank check fees of 0.25-1%.
| Cost Type | Amount | When Paid |
|---|---|---|
| Legal/Notary Fees | 1-2% of price | At closing |
| Transfer Tax | 2% of sale price | At closing |
| Registration Fees | ~0.3% of price | After closing |
| Property Appraisal | $300+ | During due diligence |
| Down Payment | 10-30% | At contract signing |
| Property Tax | 0-0.7% annually | Yearly |
| HOA/Condo Fees | $1.50-$2/sqm | Monthly |
| Insurance | ~0.1% of value | Annually |
Ongoing costs include property taxes with generous exemptions up to $120,000 for primary residences, HOA or condo fees averaging $1.50-$2.00 per square meter monthly in Panama City, property insurance at approximately 0.1% of property value annually, and variable utilities and maintenance costs.
What are the tax implications for foreign property owners?
Panama operates on a territorial tax system that benefits foreign property owners significantly.
You only pay taxes on Panama-sourced income, meaning foreign income, pensions, and investments from outside Panama remain tax-free. This makes Panama particularly attractive for retirees and international investors who maintain income sources from their home countries.
For rental income from Panama properties, progressive tax rates apply with allowable deductions for expenses like maintenance, property management, and depreciation. Property tax uses progressive rates with the first $120,000 exempt for primary residences, 0.5% on values from $120,001-$250,000, and 0.7% above $250,000. Capital gains tax is 10% on profit when selling, plus 2% transfer tax and 3% advance withholding.
If you rent your property, you must charge 7% VAT on gross rental income. However, many tax benefits and exemptions exist, particularly for properties under the Family Patrimony designation.
It's something we develop in our Panama property pack.
Can foreigners get mortgages, and what are the requirements?
Yes, foreigners can obtain mortgages from Panamanian banks, though terms differ from those offered to residents.
Typical requirements include a 30-40% down payment (sometimes up to 50%), interest rates of 7-9% compared to 4.5-7% for residents, maximum terms of 15-20 years, and age restrictions with most banks requiring loan maturity by age 65-70. Major banks lending to foreigners include Banco General, Banistmo, Global Bank, BAC Credomatic, and Scotiabank.
To improve your chances of approval, consider obtaining residency status for better terms, using a mortgage broker familiar with foreign buyers, providing extensive financial documentation including tax returns and bank statements, offering a larger down payment, and opening a local bank account before applying. Some banks require life insurance policies for the loan amount.
The application process typically takes 30-45 days, and having all documentation properly translated and apostilled speeds approval.
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 mistakes do foreigners commonly make, and how can I avoid them?
Understanding common pitfalls helps you navigate the Panama property market successfully.
The most serious mistake is buying untitled property (Rights of Possession or ROP). While cheaper, ROP properties lack full legal protection and can't be mortgaged or easily sold. Always verify that property has a registered title unless you fully understand and accept ROP risks with proper legal guidance.
Overpaying due to Panama's lack of a centralized MLS system is another common issue. Compare prices from multiple sources, work with reputable agents who know fair market values, and research recent sales in the area. Some sellers inflate prices for foreign buyers, assuming they're unfamiliar with local markets.
Other critical mistakes include skipping legal representation to save money, ignoring zoning restrictions that may limit your intended use, falling for high-pressure sales tactics at property tours, assuming tax benefits automatically transfer with property ownership, and conducting inadequate due diligence on titles and liens.
Always allow 30-60 days for proper due diligence and never rush into a purchase.
Which areas are most popular with foreign buyers and why?
Panama offers diverse locations catering to different lifestyles and investment goals.
Panama City attracts buyers seeking modern infrastructure, business opportunities, and urban amenities. Luxury high-rises in Punta Pacifica, Costa del Este, and Avenida Balboa offer world-class facilities with ocean views. The capital provides international schools, hospitals, shopping, and direct access to Tocumen International Airport.
Coronado, just one hour from Panama City, is an established beach town with golf courses, shopping centers, and restaurants. Its large expat community creates a supportive environment for newcomers, while proximity to the capital maintains property values and rental demand. Boquete in the mountains offers a cool climate, coffee country scenery, and outdoor activities that attract retirees seeking an active lifestyle.
Bocas del Toro provides Caribbean island living with eco-tourism opportunities and strong vacation rental potential, while Casco Viejo combines UNESCO World Heritage architecture with trendy restaurants and nightlife in Panama City's historic quarter.
Each area offers unique advantages depending on your priorities for climate, community, and investment potential.
Where are the best opportunities for rental income and appreciation?
Strategic location selection can maximize your investment returns in Panama's growing market.
For rental income, Casco Viejo leads with its booming short-term rental market where tourists pay premium rates for historic charm and central location. Bocas del Toro generates 8-12% annual returns during high season from vacation rentals. Panama City's business districts attract corporate tenants and expats needing furnished accommodations near offices and international schools.
| Location | Rental Yield | Appreciation | Best For |
|---|---|---|---|
| Casco Viejo | 10-15% | 8-12% | Short-term rentals |
| Costa del Este | 6-8% | 8-10% | Long-term luxury |
| Bocas del Toro | 8-12% | 5-7% | Vacation rentals |
| Coronado | 5-7% | 5-7% | Stable returns |
| Metro Areas | 7-9% | 10-15% | Future growth |
For capital appreciation, Costa del Este continues its trajectory as Panama's "Miami" with 8-10% annual growth. Properties near new metro line stations show exceptional potential as improved transportation access drives demand. PedasĂ on the Pacific coast represents an emerging market with strong growth potential as infrastructure improves.
It's something we develop in our Panama property pack.
What are current property prices across Panama?
Property prices in Panama vary significantly by location, with premium areas commanding higher rates.
Casco Viejo tops the market at $2,500-$3,500 per square meter for restored colonial properties, driven by limited supply and historic charm. Punta Pacifica and Costa del Este both average $2,500 per square meter for luxury condos with modern amenities and ocean views. These areas represent Panama's most exclusive addresses.
Mid-range markets include Bocas del Toro at $2,000 per square meter for beachfront properties, Boquete at $1,900 for houses and condos popular with retirees, and Coronado ranging from $1,800-$2,200 for established beach communities. Emerging markets like PedasĂ offer opportunities at $1,700 per square meter, while David provides the most affordable city option at $1,200-$1,500.
Price trends show prime Panama City areas appreciating 5-10% annually, beach towns growing 3-7% yearly, and infrastructure improvements driving values in newly connected neighborhoods. New metro lines create particular opportunities in previously overlooked areas.
The market remains dynamic with strong fundamentals supporting continued growth.
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.
Panama offers foreign buyers a secure, accessible real estate market with strong growth potential across diverse locations from beachfront properties to mountain retreats and urban investments.
Success requires working with reputable professionals, conducting thorough due diligence, and understanding Panama's unique property laws, but the rewards include favorable tax treatment, strong property rights, and opportunities at every price point.
Sources
- The Latin Investor - Panama Real Estate Foreigner Guide
- Living in Panama - Panama's 10K Rule
- Certified Translator Panama - Foreign Property Ownership
- Taxes for Expats - Complete Property Guide
- Henley Global - Panama Investment Residency
- Kredium - Mortgage Guide for Foreigners
- Kraemer Law - Property Taxes
- Global Property Guide - Panama Market Analysis
- Panacrypto - Real Estate Investment Guide 2025
- Casa Solution - Buying Process Guide