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
Are you considering investing in Panama’s real estate market? What are the legal steps, tax implications, and cultural differences you need to understand before taking the plunge? What challenges do foreign investors typically face, and how can you overcome them?
These are the questions we hear most often from foreign investors because we’re actively connected to this market. We’ve spent time working with local agents, developers, and investors, so we know what works—and what doesn’t. That’s why we’ve written this article: to provide a clear guide that answers the questions we get asked daily.
Our goal is to help you, as a foreigner, to navigate the property buying process with confidence. If you think there’s something we missed or want more details, let us know (please do!). Your input helps us refine and improve our advice for everyone.
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1) Use Panama’s Friendly Nations Visa to simplify long-term property management through liberal residency options
The Panama Friendly Nations Visa offers residency to citizens of designated "friendly nations" who meet specific requirements, such as economic or professional ties to Panama.
Applicants can qualify through employment, business ownership, or real estate investment. Real estate investment is particularly popular, with a 98.6% approval rate for capital-based applications in 2024.
To apply, individuals must demonstrate financial solvency, including a bank deposit of at least $5,000, and additional funds for dependents. For property investment, ownership of real estate valued at a minimum of $200,000 is required.
In 2024, 1,953 applications were approved, reflecting the program's efficiency and growing popularity.
Once approved, applicants gain permanent residency, typically within a few months, offering an expedited path for expatriates.
Panama’s appeal lies in its low taxes, quality healthcare, and reliable infrastructure, providing a supportive environment for property investors and expatriates.
Sources: IMI Daily, The Wandering Investor
2) Invest during Panama’s rainy season for better prices, as fewer buyers are active then
Buying property in Panama during the rainy season can often lead to better prices.
In 2024, the Panama Real Estate Market Report highlighted a 23% drop in sales for new developments under $180,000. This was partly because local buyers were cautious due to upcoming elections, creating a perfect storm for snagging a deal.
In March 2024, the average closing price for properties was 11.2% below the asking price. This trend shows that the rainy season is a prime time for negotiating, as fewer buyers are in the market.
Real estate agents have noticed that reduced buyer activity during the rainy season makes it a favorable period for price negotiations. This is a well-known insider tip among seasoned investors.
While specific surveys or case studies aren't mentioned, the overall market conditions suggest that fewer buyers and lower prices are common during the rainy season.
So, if you're considering a property purchase in Panama, remember that the rainy season might just be your golden opportunity to secure a great deal.
Sources: Panama Equity, Panama Relocation Tours, Origen Real Estate
We have made this infographic to give you a quick and clear snapshot of the property market in Panama. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
3) Hire a bilingual local attorney in Panama, as property contracts and titles are usually in Spanish
In Panama, Spanish is the dominant language, and most legal documents are in Spanish.
If you're not fluent in Spanish, understanding property contracts and title deeds can be tough. These documents are often filled with legal jargon that can be confusing if you're not familiar with the language.
Panamanian property laws are known for their complexity, dealing with issues like easements and boundary disputes. Without a local attorney who knows the ins and outs of these laws, you might run into unexpected legal hurdles.
The real estate market in Panama is on the rise, with an increasing number of foreign buyers entering the scene. This boom means more property transactions, which in turn raises the demand for legal services that can help bridge the language gap.
Having a bilingual local attorney is invaluable because they can navigate the legal landscape effectively and ensure that you understand every part of the transaction.
In this growing market, legal expertise is crucial to avoid potential pitfalls and make informed decisions when buying property in Panama.
Sources: Universal Translation Services, LegalZoom, Country Meters
4) Consider properties near new metro stations in Panama City, as they are likely to appreciate faster with the expanding public transport network
In Panama City, property values near metro stations have surged recently.
Take neighborhoods like Via España and El Cangrejo, where property prices jumped by 10% to 20% in 2023 and 2024. This shows how being close to a metro station can really boost real estate prices. It's a trend seen in many cities worldwide, where expanding metro systems lead to increased property appreciation.
Having a metro station nearby is a big plus for homebuyers and renters. As Panama City grows, properties near new metro stations are becoming more desirable, which is likely to push their values even higher. The convenience factor is a major draw, making these areas hot spots for real estate investment.
The government is planning to extend the metro system, with Metro Line 3 on the horizon. This expansion is expected to transform the real estate market by creating new development opportunities. Areas around these new stations are set to see a rise in property values, thanks to improved transportation links.
Urban planners and economists are on the same page, believing that better transportation will enhance the quality of life. This, in turn, will further boost property values, making these areas even more attractive to potential buyers.
Sources: Panama Realty Zone, Casa Solution
5) Expect significant price drops in Panama, as sellers often negotiate below official listing prices when approached correctly
In Panama, real estate sellers are surprisingly open to negotiation.
According to a March 2024 report by ACOBIR, properties often sell for about 11.2% less than their listed prices. This means there's a good chance to snag a deal if you play your cards right. Many sellers expect buyers to negotiate, so don't hesitate to make an offer.
Real estate agents in Panama emphasize the power of negotiation. They suggest doing your homework and staying calm during discussions. This approach is backed by stories of sellers dropping prices to close deals, as seen in reports of only two price reductions in early 2024, with no price hikes.
Properties in Panama tend to sit on the market for an average of 203 days. This longer wait time often makes sellers more willing to negotiate, especially when the market is slow. It's a buyer's market, and sellers are eager to make a sale.
With a decline in sales and construction activity, sellers are more flexible with their prices. This is a great opportunity for buyers to get a better deal. The key is to approach negotiations with confidence and a well-researched offer.
You'll be surprised that, despite official listing prices, many Panamanian sellers will expect negotiation and will often drop their asking prices substantially if approached correctly.
Sources: Panama Real Estate Market Report April 2024, How to Negotiate Like a Pro When Buying Real Estate in Panama
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6) Consider areas like Boquete or Coronado, popular with North American retirees, for steady rental and resale demand
Boquete and Coronado are hotspots for North American retirees seeking a new lifestyle.
In Boquete, you can find a newly built duplex for just $95,000 or a spacious condo for $120,000, making it a budget-friendly choice for retirees. The area is gaining attention not just from North Americans but also from wealthy Panamanians and Latin Americans looking for second homes.
Coronado is a different story, with property values climbing. The median home sale price hit $2,650,000 in 2024, marking a 10.1% increase from the previous year. This surge reflects a strong demand, with more listings and sales happening all the time.
Panama's allure as a retirement haven is undeniable, especially with its top spot in the Annual Global Retirement Index for 2025. The country offers modern infrastructure, stunning landscapes, and retiree-friendly policies like the Pensionado program, which provides discounts on healthcare and utilities.
Both Boquete and Coronado boast vibrant expatriate communities and social clubs, offering retirees a sense of belonging and a variety of activities to enjoy. This social aspect significantly enhances the quality of life for newcomers.
These neighborhoods ensure a steady demand for quality rentals and re-sales, making them attractive for both living and investment. North American retirees are not the only ones eyeing these areas; the local and regional interest is growing too.
Sources: Travel Noire, Whitney Benzian, 401k Specialist, PRWeb
7) Build personal rapport with Panamanian sellers through face-to-face meetings to negotiate better terms
In Panama, building personal relationships is crucial when doing business.
Panamanian sellers often prefer to establish trust and personal connections before discussing business details. This cultural preference means that face-to-face meetings are highly valued. The concept of "compadrazgo," which emphasizes loyalty and mutual support, extends into business relationships, highlighting the importance of personal rapport in negotiations.
Anecdotal evidence from expatriates and real estate agents in Panama suggests that successful negotiations often stem from personal interactions. This is because stronger personal connections are formed during face-to-face meetings, which can lead to better negotiation outcomes.
Historical data indicates that property negotiations conducted in person tend to have higher success rates. Articles on Panamanian business etiquette also stress the significance of building personal relationships, further supporting this cultural norm.
Understanding this cultural aspect can give you an edge in negotiations. Culturally, Panamanian sellers often prefer face-to-face meetings and personal rapport, which will help you negotiate better terms.
Sources: A Guide to Business Etiquette in Panama | ClickUp™, Cross Cultural Management Guide for Panama - Commisceo Global, Panama Contract Negotiation Etiquette
8) Consider properties near Panama’s major infrastructure projects, like Canal expansions or new bridges, for potential appreciation
Being near Panama's major infrastructure projects, like the Canal expansions, means your property is more likely to increase in value.
The Panama Canal has a history of boosting property values in nearby areas. With its expansion, there's been a surge in demand for both commercial and residential real estate, which has led to higher property prices. This is largely because the canal plays a big role in economic growth and the expansion of the service sector.
These infrastructure projects also improve transportation and accessibility, making nearby areas more attractive. This increased appeal draws in more people and businesses, which in turn drives up property values even further. The canal's strategic importance in global trade is a magnet for international investors, who are eager to buy properties in these regions.
Living close to these projects means you're tapping into a hub of economic activity. The closer you are, the more likely your property will appreciate over time. This is especially true as new bridges and roads make commuting easier, adding to the area's allure.
For those considering buying property in Panama, it's worth noting that these infrastructure developments are not just about convenience. They are a key factor in the rising demand for real estate, making it a smart investment choice.
So, if you're eyeing a property purchase in Panama, keep an eye on these major projects. They are not just reshaping the landscape but also reshaping the real estate market in a big way.
Sources: Panacrypto, Pallas Life, Harvard Growth Lab
We made this infographic to show you how property prices in Panama compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
9) Consider Airbnb-style investments in Panama City’s financial district, as short-term rental demand remains steady
In 2023 and 2024, Panama City experienced a surge in tourism, with nearly 28% of mobile phones in the city belonging to visitors.
This influx of tourists has had a strong impact on local businesses, driving up the demand for accommodations. Short-term rentals in Panama City are thriving, with a typical listing booked for 237 nights a year and maintaining a median occupancy rate of 65%.
The growth of Airbnb listings is a testament to this demand, with the number of active listings reaching 274 by late 2024. Hosts in the city are seeing an average annual income of $31,671, making it a lucrative market for property investors.
Travelers are particularly drawn to the financial district, thanks to its proximity to business centers and amenities. This area is a hotspot for business travelers, further boosting the demand for short-term rentals.
Panama City's status as a financial hub makes it an attractive destination for both leisure and business travelers. The steady influx of visitors ensures that the short-term rental market remains robust, especially in the financial district.
For those considering property investment, the financial district offers promising opportunities. The consistent demand for short-term rentals in this area is a clear indicator of its potential for Airbnb-style investments.
Sources: Travel and Tour World, Airbtics, Airbtics
10) Plan for a longer hold in Panama, as stricter lending rules slow property flipping in some areas
In Panama, property flipping has slowed down due to stricter lending rules for local buyers.
These regulations make it tough for locals to get mortgages, which means properties take longer to sell. The preferential interest rate law, while great for first-time buyers, has its own set of hurdles. You need at least two years of steady employment and solid credit references, which narrows down the pool of eligible buyers.
Since Q2 2019, the domestic mortgage market reference rate has been stuck at 5.75%. This rate affects how affordable homes are for locals, adding to the slow pace of property flipping. Plus, there's an oversupply of new developments in some areas, which means sellers face more competition.
With more properties on the market, sellers often have to wait longer for the right buyer or for market conditions to improve. This means planning for a longer hold is wise if you're thinking about investing in Panama.
In some regions, the market is particularly competitive, so patience is key. Understanding these dynamics can help you make a more informed decision if you're considering buying property in Panama.
Sources: Global Property Guide, ReloFirm, Latam News
11) Connect with reputable local contractors and architects to navigate Panama’s complex building and renovation regulations
Connecting with reputable local contractors and architects in Panama is a smart move.
Panama's building codes are crafted by the Engineering and Architectural Technical Board, a non-governmental body. This can lead to variability in enforcement across regions, making local expertise invaluable for property owners.
Take the Nuevo Brooklincito Residential Complex in Curundu, for instance. This project, which involved building four seven-story residential towers, showcases the importance of local professionals in navigating complex regulations.
Another example is the construction of the fourth Panama Canal bridge, which kicked off in April 2024. This massive project highlights the need for precise regulatory compliance to avoid costly delays.
Understanding and adhering to local regulations is crucial for timely and cost-effective project completion, especially in large-scale developments.
By connecting with local experts, you can ensure your project aligns with Panama's unique regulatory landscape, saving you time and money.
Sources: Panama Construction Market Analysis, Panama Building Permits
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12) Consider pre-construction condos in promising areas for early market entry and potential significant returns as projects near completion
Investing in pre-construction condos in Panama can be a smart move for potential buyers.
In Panama City, condo prices in top-tier buildings like Allure at the Park have jumped by 13% over the past two years, rising from $1,890/m² in 2021 to $2,139/m² in 2023. This trend highlights the potential for significant returns as projects near completion. The market dynamics in areas like Costa del Este are also shifting, with new condo deliveries dropping from over 1,000 to less than 100 by 2024. This reduced supply, combined with steady demand, is likely to push rental prices up by 5-10%, making early investments in pre-construction condos particularly appealing.
Experts are optimistic about Costa del Este, predicting growth due to increased hiring and employee relocations. This could further boost property values and rental yields. Panama is also making it easier for investors by streamlining permitting processes and offering reduced property tax rates for new investments or renovations. These measures enhance the appeal of pre-construction investments.
Panama's urban population is on the rise, with a growth rate of 1.8759% in 2023. This stable increase in the urban population is expected to drive demand for both housing and commercial properties. The government's supportive infrastructure policies are designed to attract more property investments, making the market even more enticing for potential buyers.
With these factors in play, Panama's real estate market offers a promising landscape for those looking to invest in pre-construction condos. The combination of rising property values, reduced supply, and supportive government policies creates a favorable environment for investors.
Sources: 2024 Panama Real Estate Market Forecast, Urban Population Growth (annual %) - Panama, The Ultimate Guide to the Panama Real Estate Market
13) Know that Panama's real estate taxes vary by property value, with exemptions for new constructions
In Panama, property taxes depend on the property's value.
If your property is worth up to $120,000, you won't pay any property taxes. For those valued between $120,001 and $700,000, the tax rate is 0.5%. Once your property value exceeds $700,000, the tax rate jumps to 0.7%. This tiered system helps balance the tax burden based on property value.
Newly built homes have their own perks. If your home was built between 2012 and 2018, you might get a break on taxes for the construction improvements. For homes valued up to $120,000, these exemptions can last up to 20 years. If your home is valued between $120,001 and $300,000, the exemption period is 10 years, and for those above $300,000, it's 5 years.
These tax breaks are a smart move by the government to boost real estate investments. They make owning property more appealing and affordable. Knowing these details can help you plan your investment and manage your taxes better.
Panama's real estate market is attractive, partly due to these tax incentives. They not only encourage new constructions but also make it easier for people to own homes. This approach is particularly beneficial for those looking to invest in the long term.
Sources: Kraemer Law, ReloFirm, Living in Panama
14) Budget for higher fees when buying ocean-view condos in Panama, as they often come with increased homeowner association costs
Buying a high-rise condo with an ocean view often means dealing with higher homeowner association fees.
These fees are higher because ocean-view properties face harsher weather conditions, leading to more frequent repairs and maintenance. For instance, the Grand Panama Condominium experienced a 28% increase in association dues in 2024, mainly due to rising insurance costs and structural reserve requirements.
Ocean-view condos also tend to have amenities like pools and hot tubs, which add to the overall maintenance costs. This is part of a broader trend where more resources are needed to maintain the condition and safety of these properties.
In 2023, real estate market reports highlighted that rising association fees significantly impacted condo prices. Many condos saw price decreases because of these increased costs, showing how higher fees can affect property values.
Property managers and real estate agents often advise potential buyers to budget for these expenses. They emphasize the importance of planning for the additional costs associated with ocean-view living.
Understanding these financial aspects is crucial for anyone considering purchasing a high-rise condo with an ocean view. It's not just about the view; it's about being prepared for the extra costs that come with it.
Sources: Typical Condo Association Fees in Panama, Panama City Beach Condo Market Overview - February 2024, Adapting to 2024/2025 trends impacting high-rise condominiums
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Panama. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
15) Consider reliable internet access in rural or coastal areas, as it's a key selling point often overlooked
When buying property in rural or coastal areas, reliable internet access is a key selling point that many overlook.
With the rise of digital nomadism and remote work, internet connectivity has become crucial for many buyers. People now rely heavily on digital platforms for work and communication, making a stable internet connection a necessity rather than a luxury.
In Panama, 78.8% of the population uses the internet, and there have been significant improvements in internet speeds recently. This shows a strong effort to boost digital infrastructure, which is vital for attracting buyers who prioritize connectivity. In beach towns, for instance, real estate listings often highlight high-speed internet as a major feature.
Expatriates and locals often talk about the challenges of internet access in rural and coastal areas, highlighting its importance for daily life and business. The increase in remote workers and digital nomads in Panama further underscores the need for robust internet infrastructure to support this lifestyle.
Properties with reliable internet access tend to sell faster and appreciate in value, making them more attractive to buyers. In fact, having a good internet connection can significantly boost a property's appeal and marketability.
For those considering a move to Panama, understanding the local internet landscape is crucial. Reliable connectivity can make or break your experience, especially if you plan to work remotely or stay connected with family and friends abroad.
Sources: Wild Expedition, International Living, DataReportal
16) Use local bank escrow services for secure deals, as they are less common in Panama than elsewhere
In Panama, real estate transactions in 2023 and 2024 faced hurdles due to limited escrow services.
Escrow services are vital for secure deals, but in Panama, only licensed trust agencies can offer them if the funds stay within the country. This regulation has made many expatriates and foreign investors uneasy, especially when dealing with unclear land titles and 'Right of Possession' land.
These issues have led to numerous complaints, with some investors experiencing lost properties and broken contracts. The need for more secure transaction methods is evident, as many deals could be safer with escrow services through local banks, a practice not as common in Panama as elsewhere.
When you look at other countries, Panama's real estate system seems more prone to disputes and scams. For instance, in the United States, escrow services are widely used, making transactions more secure and reducing fraud risks.
In Panama, the lack of widespread escrow services has been a significant concern, especially for those unfamiliar with the local market. This situation contrasts sharply with countries where escrow is a standard part of real estate transactions, providing peace of mind to buyers and sellers alike.
Understanding these dynamics is crucial for anyone considering buying property in Panama, as it highlights the importance of navigating the market with caution and seeking professional advice.
Sources: Kraemer Law, U.S. Department of State
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.