How much are property taxes and fees in Panama?

Why can two Panama properties have completely different tax bills?

Quoting one percentage for every Panama property is misleading, because the bill depends on three things that vary a lot from one unit to the next.

The annual tax depends on the property's cadastral value, whether it's registered as a principal residence, and whether an old exemption still covers its improvements. Then come costs that have nothing to do with property tax: legal work, registration, condo fees, insurance, management and the taxes due when you sell.

The gap is large. A $250,000 cadastral value under the ordinary brackets pays about $1,320 a year. The same value registered as a main home pays about $650. A unit whose improvements are still exempt can pay less again.

The other big source of confusion: Panama's 2% transfer tax and 3% income-tax advance are paid by the seller. They matter when you work out your exit, but they don't belong in a buyer's closing budget.

Cost	When it appears	Current basic rule	Usually paid by
Property tax	Every year	0%–1% ordinary progressive rates	Owner
Principal-home property tax	Every year	0%–0.7% progressive rates	Owner
Buyer closing expenses	At purchase	About 1.5%–3% for a cash buyer	Buyer
Condo maintenance	Monthly	Building-specific	Owner
Transfer tax (ITBI)	At sale	2% (reduced on the first sale of a new home under Law 546)	Seller
Income-tax advance on sale	At sale	3%	Seller

What are Panama's property tax rates right now?

Panama's ordinary property tax tops out at 1%, and almost everyone pays less than that because the rates apply slice by slice.

According to Panama's tax authority, the Dirección General de Ingresos (DGI), the first $30,000 of cadastral value is taxed at 0%. The slice from $30,000 to $250,000 pays 0.6%, the slice from $250,000 to $500,000 pays 0.8%, and anything above $500,000 pays 1%. These brackets cover investment properties, second homes and any unit that isn't registered as the owner's main home.

So a $500,000 cadastral value doesn't mean a $5,000 bill. Applying each bracket to its own slice gives about $3,320.

At $250,000, the bill is about $1,320. At $1 million, about $8,320.

The 1% top rate tells you very little on its own: even at $1 million, the effective rate is about 0.83%.

Cadastral value	Estimated annual tax	Effective rate
$100,000	$420	0.42%
$250,000	$1,320	0.53%
$500,000	$3,320	0.66%
$1,000,000	$8,320	0.83%

How much cheaper is property tax on a main home in Panama?

A lot cheaper, especially in the middle of the market.

The DGI applies a $120,000 tax-free threshold to homes registered as the owner's principal residence (vivienda principal) or as patrimonio familiar tributario. The slice from $120,000 to $700,000 is taxed at 0.5%, and anything above $700,000 at 0.7%.

Take a $250,000 cadastral value. The ordinary bill is about $1,320 a year; the main-home bill is about $650.

At $500,000, the gap widens in dollars: about $3,320 under the ordinary schedule versus $1,900 as a registered main home.

At $1 million, we get about $8,320 versus $5,000.

Two catches. First, it isn't automatic: the DGI expects owners to apply for the main-home treatment, so ask your lawyer to file it right after the deed is registered. Second, a unit you rent out isn't your main home, so investors should budget with the ordinary brackets.

Cadastral value	Ordinary property	Principal residence	Annual saving
$100,000	$420	$0	$420
$250,000	$1,320	$650	$670
$500,000	$3,320	$1,900	$1,420
$700,000	$5,320	$2,900	$2,420
$1,000,000	$8,320	$5,000	$3,320

Is Panama property tax calculated from the price you paid?

No. It's based on the cadastral value in the official records, so the purchase price alone can't tell you the exact bill.

The DGI works from the values recorded through ANATI, Panama's land-administration authority. Those records split the value between the land and the improvements (the building).

A condo bought for $300,000 can have a taxable base well above or below $300,000. An active exemption changes the bill again.

So don't estimate it from the listing. Ask for the finca number and check the cadastral value, the tax account and any active exemption before you sign.

That's why two apartments sold at almost the same price can leave their owners with clearly different tax bills.

Can newer Panama condos still have almost no property tax?

Some can, but only thanks to old exemptions, and fewer every year.

Under the older rules, new residential improvements could get an exemption of 5 to 20 years, depending on their value. Since the 2017 reform (Law 66), those exemptions keep running until they expire for projects permitted before 2019, but a home built in 2026 doesn't get a fresh automatic 20-year exemption. Some DGI pages still describe the old exemptions, which is why you'll see conflicting claims online.

Even when the exemption applies, it covers only the improvements. In a PH (horizontal-property building), the owner still pays tax on the share of land under the unit.

That explains listings where a fairly expensive apartment shows a tiny annual tax: the building is still inside its exemption period.

What to check: the exemption's end date on the tax record. A condo that pays almost nothing now can jump to the full ordinary bill the year the exemption ends, and that's the bill a future buyer will look at.

How do you check a Panama property's taxes before you sign?

Ask for four documents before you pay anything beyond a refundable deposit. Each one takes a few days for a lawyer to get, and each one can kill a bad deal.

First, the Public Registry folio: it shows the owner, mortgages, liens and the registered value. Second, the property-tax paz y salvo from the DGI, which proves the annual tax is paid up; the transfer normally can't go through without it. Third, the IDAAN paz y salvo for water.

Fourth, for a condo, the PH paz y salvo. Under Law 284, unpaid condo fees are attached to the unit, so the new owner inherits the old owner's debt with the building if nobody checks.

While you're at it, ask the seller for the last tax bill and the exemption end date if there is one. That one number tells you whether the low tax in the listing is real or about to end.

How much are buyer closing costs in Panama today?

For a simple cash purchase, budget about 1.5% to 3% of the price.

The main items: your lawyer, usually 1% to 1.5% of the price; the notary, $300 to $800; and the Public Registry, $200 to $500. Title searches, certifications and escrow come on top.

Some brokers quote as little as 1.2% to 2% for a cash buyer, others 3% to 4% once escrow and admin are included. Guides that quote 4% to 7% usually add mortgage costs or taxes the seller normally pays. Until your deal is priced, plan on the middle of the range.

Escrow is the item people forget. Kraemer & Kraemer advertises real-estate escrow at $500 or 1% of the amount held, whichever is higher. Putting the full price of a $250,000 purchase in escrow adds $2,500 on its own.

A mortgage pushes the total up: appraisal, bank fees, life and property insurance, and the 1% FECI surcharge on loan interest.

Buyer expense	Typical scale	What changes it
Lawyer and due diligence	1%–1.5% of price	Lawyer and complexity
Notary	$300–$800	Purchase value and documents
Public Registry	$200–$500	Purchase value and filings
Escrow	Often 1% (minimum $500)	Amount held and provider
Mortgage-related costs	Bank-specific	Loan amount and lender
Overall cash-buyer budget	Roughly 1.5%–3%	Deal structure

What does a Panama company or foundation cost you every year?

About $600 a year for a company, and more for a foundation, before any accounting.

Some buyers hold property through a Panamanian sociedad anónima (S.A.) or a private interest foundation, often for inheritance planning. The DGI charges an S.A. a $300 annual tax (tasa única), with a $50 surcharge if you pay late. On top of that, every S.A. needs a resident agent, which costs around $300 a year at firms like Nubia Legal.

A foundation pays $400 a year in tax. Mata & Pitti's annual package for a foundation with its own council costs about $775, agent included.

Setting one up costs money too: about $1,330 for an S.A. and $1,150 to $1,455 for a foundation at the firms we checked.

Over ten years, an S.A. adds roughly $6,000 to the cost of owning. That can be worth it for inheritance reasons, but for a single condo, holding it in your own name is often simpler. A foreign buyer doesn't need a company to own titled property in Panama.

Does a Panama buyer really pay a 2% transfer tax?

Normally no. The 2% transfer tax (ITBI) is the seller's tax.

The DGI's forms are filed by the seller, both for the ITBI and for the income-tax advance on the sale. The tax is 2% of the higher of the sale price and the updated registered value, which grows by 5% a year on top of the original value plus improvements.

This is where many Panama closing-cost guides go wrong. A sale can generate about 5% in taxes, but that doesn't mean the buyer writes a 5% cheque at closing.

Sellers obviously build their taxes into the price they'll accept. But for a buyer's budget, the 2% belongs to the seller, and on the first sale of a new home, Law 546 now says any clause making the buyer pay it is void.

Does Law 546 cut the 2% transfer tax on new Panama homes?

Yes, but only on the first sale of a new home, and the saving goes to the seller first.

Law 546, in force since September 1, 2026, exempts the first $120,000 of the tax base from ITBI on the first sale of a new home. Between $120,000 and $200,000, the excess over $120,000 is taxed at a single reduced rate set by the price band: 0.5% up to $130,000, 1% up to $150,000, 1.4% up to $170,000, 1.6% up to $190,000 and 1.8% up to $200,000. Above $200,000, the official text keeps the first $120,000 exempt and taxes the excess at the normal 2%.

In dollars: a $180,000 new apartment pays $960 of ITBI instead of $3,600. A $300,000 one pays $3,600 instead of $6,000. Above $200,000, the saving is a flat $2,400.

The conditions: it must be a new home, it must be its first sale, and the deed must be signed within 24 months of the occupancy permit (30 months for permits issued before the law). The seller declares all this under oath in the deed. The text doesn't require the buyer to live in it.

What to do with it: since the developer pays the ITBI, the cut lands in its pocket unless you negotiate. On a sub-$200,000 unit, ask the developer to show the ITBI saving in the price. On a resale, Law 546 doesn't apply at all, and an off-plan unit whose deed slips past the 24-month window loses the break.

New-home price (first sale)	ITBI before (2%)	ITBI under Law 546	Saving
$120,000	$2,400	$0	$2,400
$150,000	$3,000	$300	$2,700
$180,000	$3,600	$960	$2,640
$200,000	$4,000	$1,440	$2,560
$300,000	$6,000	$3,600	$2,400

How much tax does a seller pay when selling property in Panama?

Plan on about 5% of the price upfront on a normal resale: 2% ITBI plus a 3% income-tax advance.

Both are calculated on the higher of the sale price and the registered (cadastral) value, under the Código Fiscal as amended in the Gaceta Oficial.

The 3% isn't a 3% tax on your profit. Panama taxes the gain on an occasional property sale at 10%. The 3% of the price is an advance: you can keep it as your final tax, or, if 10% of your real gain is lower, claim the difference back. Example: you bought at $400,000 and sell at $500,000. The advance is $15,000, but 10% of the $100,000 gain is $10,000, so you can claim $5,000 back. The same rule applies to non-residents.

On a $500,000 sale, the ITBI is $10,000 and the advance $15,000: $25,000 at closing, before any refund. Add the agent: 3% to 5% plus 7% ITBMS, also normally paid by the seller. At 5%, that's another $26,750.

That exit cost hurts a short holding period far more than Panama's modest annual property tax.

Sale price	2% transfer tax	3% income-tax advance	Immediate total
$150,000	$3,000	$4,500	$7,500
$250,000	$5,000	$7,500	$12,500
$500,000	$10,000	$15,000	$25,000
$1,000,000	$20,000	$30,000	$50,000

Are Panama condo fees actually more expensive than property taxes?

Very often, yes. For many Panama apartments, the HOA costs far more each year than the property tax.

A 100 m² condo charging $1.50 per m² pays $150 a month, or $1,800 a year.

Compare that with about $650 of tax on a $250,000 registered main home. The condo fee is almost three times bigger.

The spread between buildings is wide. PanamaProp (April 2026) puts standard Panama City buildings at $1.50 to $2.50 per m² a month and premium amenity towers at $2.50 to $4.50. In a September 2026 sample of 142 listings, ADEMSA found the middle half of fees between about $1.34 and $2.36 per m² across Costa del Este, Punta Pacífica, San Francisco, Obarrio, El Cangrejo and Bella Vista. Panama Equity's building page for Rio Mar, a beach resort, quotes about $2.50 to $3 per m².

For a 150 m² unit, $3 per m² means $450 a month, or $5,400 a year.

So study a building's HOA almost as closely as its price. Elevators, pools, security, staff, gardens and big common areas can quietly become the biggest fixed cost of owning the apartment.

Condo size	Fee per m²/month	Monthly fee	Annual fee
80 m²	$1.50	$120	$1,440
100 m²	$1.50	$150	$1,800
130 m²	$2.00	$260	$3,120
150 m²	$2.50	$375	$4,500
150 m²	$3.00	$450	$5,400

What should you check before accepting a Panama condo's HOA fee?

The monthly number is only half the story. The building's finances matter just as much.

Panama condo fees usually pay for staff, security, elevators, pools, gardens, common electricity and administration. Some buildings also include water or gas.

A beach resort with several pools and big gardens should cost more than a basic city tower. The real question is whether the current fee actually covers those costs.

A suspiciously cheap fee often means underfunded maintenance, owners who don't pay, or big repairs coming. That's easy to miss when the monthly number looks good.

Ask for the PH's last financial statements, the arrears list, the reserve fund balance, any approved special assessment and planned major works. If the building won't share them, that's your answer.

Houses have the same logic in a different form: no HOA bill, but you pay directly for gardening, pool upkeep, security, pest control, repairs and insurance.

How much do property managers take from Panama rental income?

For a long-term lease, 8% to 12% of collected rent, according to Vaca Group (September 2026); 10% is the usual benchmark. For Airbnb-style rentals, full-service managers take 15% to 25% of gross revenue.

On a condo renting for $1,500 a month (about $15 per m² for 100 m², close to the $14.70 per m² average asking rent on Encuentra24 in June 2026), gross rent is $18,000 a year. A 10% fee removes $1,800.

Add a $200 monthly HOA and another $2,400 goes. Those two costs already take $4,200 a year, or 23% of gross rent, before vacancy, repairs, insurance, property tax or income tax.

This is where Panama's low property tax distracts investors. Saving $670 a year with the main-home rate (which a rental can't use anyway) does little for a unit that loses thousands to an expensive building and management.

For a rental investor, HOA and management matter more than the property-tax rate.

Do foreign landlords pay income tax on Panama rent?

Yes. Rent from a property in Panama is Panama-source income, even if you live abroad.

Panama taxes on a territorial basis: income earned in Panama is taxable there for residents and non-residents alike (PwC, August 2026).

For individuals, the scale is 0% on the first $11,000 of taxable income, 15% on the slice from $11,000 to $50,000, and 25% above $50,000.

The rates apply to net taxable income, not to gross rent, so deductible costs matter. In the rental example below, $18,000 of rent minus about $7,120 of HOA, tax, insurance and management leaves about $10,880, right at the edge of the 0% band if those costs are deductible and it's your only Panama income. A second unit, or a higher rent, pushes the excess into the 15% band. There's no single published withholding rate for non-resident landlords, so have a local accountant set up the filing.

When you calculate a yield, keep the two apart: property tax is a cost of owning the unit, income tax depends on what it earns.

Does Airbnb-style rental get the same tax treatment as a normal Panama lease?

No. Short stays lose a tax advantage that normal residential leases keep.

The DGI exempts residential leases from ITBMS (Panama's sales tax) when the tenant uses the place as a home and the lease runs more than six months.

Below six months, the rental no longer counts as an exempt residential lease.

And the DGI applies 10% ITBMS to all forms of lodging. Two bills in the Assembly would change Airbnb taxation (Bill 301 at 10%, Bill 713 at 15%), but as of October 2026 neither is law.

So a beach condo or city apartment run as a short-stay rental needs a different tax model from one leased to the same tenant for a year. Comparing gross Airbnb revenue with long-term rent without that adjustment flatters the Airbnb.

What does a $250,000 Panama condo really cost each year?

About 0.9% to 2.8% of its value a year before mortgage payments, and the HOA and rental setup drive most of the difference.

Take a 100 m² apartment registered as the owner's main home. Property tax is about $650. At $1.50 per m² a month, the HOA adds $1,800.

Add $400 for basic property insurance (the low end of the $400 to $1,200 range PanamaProp uses in its 2026 buyer model) and the fixed total is about $2,850 a year, or 1.1% of the price.

Now make the same apartment a rental in a building charging $3 per m². The HOA jumps to $3,600. With $18,000 of rent and a 10% manager, another $1,800 goes. Add the ordinary $1,320 property tax and the recurring costs reach about $7,120, or 2.8%, before vacancy, repairs, utilities and income tax.

An active exemption on the improvements would cut the property-tax line, but it barely changes the lesson: the building and the rental setup move the annual budget far more than the tax.

$250,000 / 100 m² condo	Lower-cost owner	Main-home owner	Higher-cost rental
Property tax	Potentially very low with exemption	~$650	~$1,320
HOA	$1,800	$1,800	$3,600
Basic insurance allowance	$400	$400	$400
Management	$0	$0	$1,800
Approx. annual cost	~$2,200+	~$2,850	~$7,120
Share of property value	~0.9%+	~1.1%	~2.8%

What's the realistic all-in budget, from purchase to resale?

Panama really is a low-property-tax country, but the tax bill is the smallest part of the budget.

At purchase, a cash buyer should plan on about 1.5% to 3% for the lawyer, notary, registry and escrow. A mortgage or a company structure pushes that higher. On the first sale of a new home, Law 546 cuts the seller's ITBI, so negotiate to get some of it back in the price.

Each year, ordinary property pays 0% to 1% under progressive brackets, a registered main home 0% to 0.7%, and a few older buildings still benefit from exemptions on improvements until they expire.

Condo owners then add the HOA, which usually weighs more than the tax. Investors add management, vacancy, repairs and income tax on the net rent.

The exit is where the tax bites: the seller pays the 2% ITBI and the 3% advance, which can be partly refunded if 10% of the real gain is lower, plus the agent's commission.

Our take: Panama's low-tax reputation is deserved. The expensive surprises come from elsewhere: high HOA fees, exemptions that end, rental management and the cost of selling.