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 remains one of the most foreigner-friendly countries in Latin America for buying residential property, with US citizens enjoying nearly the same rights as locals in most areas.
The main exception is the border zone restriction, which prohibits foreign ownership within 10 kilometers of Panama's international borders with Costa Rica and Colombia.
We constantly update this blog post to reflect the latest rules, taxes, and market conditions in Panama.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Panama.
Can a US citizen legally buy residential property in Panama right now?
Can I buy a home in Panama as a US citizen in 2026?
As of early 2026, US citizens can legally purchase residential property in Panama with very few restrictions, making Panama one of the easiest countries in Latin America for Americans to buy real estate.
The standard buying process in Panama involves hiring a local attorney, signing a purchase agreement, paying the 2% transfer tax, and registering the deed with the Public Registry to make your ownership legally enforceable.
This straightforward process means most American buyers can complete a Panama property purchase within 30 to 60 days, assuming the title is clean and all documents are in order.
By the way, we've written a blog article detailing all the foreigner rights regarding properties in Panama.
Are there many Americans buying property and living in Panama in 2026?
As of early 2026, estimates suggest between 20,000 and 60,000 US citizens reside in Panama, making it one of the largest American expat communities in Central America.
The highest concentrations of American property owners in Panama are found in Panama City neighborhoods like Punta Paitilla, Costa del Este, and San Francisco, along with beach communities such as Coronado and the highland town of Boquete.
The top three reasons Americans choose Panama include the US dollar as official currency, the relatively low cost of living compared to major US cities, and the Pensionado visa program offering excellent retirement benefits.
The American expat community in Panama continues to grow steadily, driven by remote work flexibility, retirement migration, and Panama's stable economy and modern infrastructure.
Do foreigners have the same buying rights as locals in Panama?
Foreigners, including US citizens, have nearly identical property buying rights as Panamanian locals, with no special restrictions based on nationality and no requirement for local partners or sponsors.
The main restriction in Panama applies to all foreigners equally: you cannot buy property within 10 kilometers of Panama's borders with Costa Rica or Colombia, and some coastal or island areas may involve concession rights rather than full title.
We cover all these things in length in our pack about the property market in Panama.
Can I buy property in Panama without a residence permit?
You do not need a residence permit to buy property in Panama, as the purchase is a property transaction governed by civil law rather than immigration status.
Many Americans buy property in Panama while living abroad by granting power of attorney to a local lawyer who handles all signings, tax payments, and registry filings on their behalf.
Buying a home in Panama does not automatically grant you a visa or residency, though Panama does offer investor visa programs where real estate investment of $300,000 or more can qualify you for residency through a separate immigration process.
The main challenge for non-resident buyers completing a remote purchase in Panama is coordinating document authentication, wire transfers across time zones, and ensuring your power of attorney is properly notarized and apostilled.
Can US citizens own land in Panama?
US citizens can own land outright in Panama through freehold ownership, which means you hold full title registered in your name at the Public Registry with the same rights as any Panamanian citizen.
Panama uses a straightforward titled property system for most residential land, though some areas involve "rights of possession" or government concessions which are not the same as clean freehold title and require extra due diligence.
The specific geographic zones where foreign land ownership is prohibited in Panama include all areas within 10 kilometers of the Costa Rican and Colombian borders, plus certain islands and coastal strips that may only be available through concession arrangements.
Please note that we have a dedicated blog article about the land buying process in Panama here.
What documents will I need to buy in Panama?
The essential documents a US citizen needs to purchase property in Panama include a valid passport, proof of funds showing the source of your money, and eventually the notarized purchase contract and closing deed prepared by your attorney.
A local tax identification number (RUC) is often required for foreign buyers in Panama to complete the transfer tax filing with DGI and to set up utility accounts, and your attorney can help you obtain one during the buying process.
A local bank account is not strictly mandatory to complete a Panama property purchase, but most buyers open one for practical reasons like paying HOA fees, utilities, and handling ongoing property expenses.
Foreign buyers in Panama typically need to provide proof of funds documentation showing where your purchase money comes from, and while a local address is not always required, many buyers use their attorney's office for official correspondence.
We have a whole section dedicated to all the documents you need in our Panama property pack.
Can a foreign-owned company buy property in Panama?
Foreign-owned companies can legally purchase residential property in Panama, and this is actually a common strategy used by both locals and foreigners for privacy, estate planning, and easier future transfers.
Americans commonly use Panamanian corporations (Sociedad Anónima or S.A.) or private foundations to hold property in Panama, as these structures offer anonymity and can simplify inheritance by transferring shares rather than the property itself.
Owning property through a company structure in Panama does not necessarily lower your taxes and can actually increase complexity, especially for Americans who may trigger additional IRS reporting requirements like Form 5471 for foreign corporations.
The main drawback of using company ownership for residential property in Panama is the added cost and paperwork, including annual registered agent fees, corporate maintenance, and the potential for more complicated US tax filings.
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What taxes and fees will I pay in Panama in 2026?
What are buyer taxes in Panama in 2026?
As of early 2026, the main buyer tax in Panama is the 2% transfer tax (ITBI), so on a $300,000 property you would pay approximately $6,000 (about 6,000 USD or roughly 5,500 EUR) in transfer tax alone.
The transfer tax in Panama is calculated at 2% of the higher of the sale price or the cadastral value, and this is the primary tax component buyers face at closing, paid through DGI's Form 106 process.
Transfer tax rates in Panama do not differ for foreigners versus locals, and there is no additional foreigner surcharge, though annual property tax can be reduced if you qualify for the primary residence (PFTV) exemption.
If you want to go into more details, we also have a page detailing all the property taxes and fees in Panama.
What are other closing costs in Panama in 2026?
As of early 2026, total closing costs excluding taxes in Panama typically range from 3% to 4% of the purchase price, meaning on a $300,000 property you should budget roughly $9,000 to $12,000 (about 8,300 to 11,000 EUR) for non-tax closing expenses.
The main closing cost categories in Panama include legal fees (typically 1% to 1.5% or around $3,000 to $4,500 on a $300,000 home), notary fees ($300 to $600), Public Registry fees ($200 to $500), and title search costs ($200 to $400).
Legal fees are somewhat negotiable in Panama depending on transaction complexity, and real estate agent commissions are typically paid by the seller rather than the buyer, though this should always be confirmed in your purchase agreement.
The closing cost item that surprises foreign buyers most in Panama is often the speed of additional small charges like document certifications, translations, and bank wire fees that can add $500 to $1,000 unexpectedly.
Are there hidden fees foreigners miss in Panama right now?
The total amount of commonly overlooked fees for foreign buyers in Panama typically ranges from $1,000 to $3,000 (about 920 to 2,760 EUR), depending on property type and location.
The top three hidden fees foreign buyers miss in Panama are HOA or building administration fees in condos (often $200 to $800 per month), utility connection or transfer fees ($100 to $300), and ongoing property management costs if you live abroad ($100 to $300 per month).
After purchase, foreign property owners in Panama often underestimate annual property taxes (which vary by value but can be $500 to $2,000 per year on mid-range homes), building maintenance reserves, and insurance costs for tropical weather risks.
Getting surprised by hidden fees is one of the pitfalls people face when buying real estate in Panama.
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.
Can I get a mortgage as a US citizen in Panama in 2026?
Do banks lend to US citizens in Panama in 2026?
As of early 2026, several major banks in Panama do offer mortgages to US citizens, though the process involves more documentation and larger down payments than American buyers typically experience at home.
US citizens generally receive similar treatment to other foreign nationals when applying for mortgages in Panama, with no significant advantage or disadvantage compared to Europeans or other nationalities.
Some banks in Panama are hesitant to lend to American borrowers specifically because of FATCA compliance requirements, which create additional reporting burdens that smaller banks prefer to avoid.
The typical approval rate for US citizens applying for property loans in Panama is reasonable if you have strong documentation, stable income, and are willing to provide a substantial down payment of 30% or more.
There is a full document dedicated to mortgage for foreigners in our pack covering the property buying process in Panama.
What down payment do American people need in Panama in 2026?
As of early 2026, the minimum down payment for US citizens to obtain a mortgage in Panama is typically 30% to 40%, so on a $300,000 property you would need at least $90,000 to $120,000 upfront (about 83,000 to 110,000 EUR).
The typical down payment range for foreign buyers in Panama spans from 30% at the minimum to 50% for borrowers with non-standard income or for properties in less liquid markets.
A larger down payment in Panama does improve your mortgage terms, often resulting in lower interest rates and better loan conditions, as banks view higher equity as reduced risk.
You can also read our latest update about mortgage and interest rates in Panama.
What interest rates do US citizens get in Panama in 2026?
As of early 2026, the typical mortgage interest rate range for US citizens in Panama is approximately 6% to 8%, depending on the bank, loan term, and your financial profile.
Interest rates for foreign buyers in Panama are generally 0.5% to 1.5% higher than rates offered to Panamanian residents, reflecting the additional risk banks associate with non-resident borrowers.
Variable-rate mortgages are more common for foreign buyers in Panama, often tied to a reference rate plus a margin, with typical terms of 15 to 25 years and options for fixed periods of 1 to 5 years.
The single factor with the biggest impact on the interest rate a US citizen will be offered in Panama is your loan-to-value ratio, as a larger down payment consistently secures better pricing.
Can I use US income to qualify in Panama right now?
Banks in Panama generally accept US-sourced income for mortgage qualification, making it possible for Americans working remotely or maintaining US employment to finance a Panama property purchase.
Documentation of US income that banks in Panama typically require includes two years of federal tax returns, recent pay stubs or profit-and-loss statements for self-employed applicants, and three to six months of bank statements showing regular deposits.
If standard US documentation is insufficient, some Panama banks accept alternative verification such as CPA letters confirming income, employment verification directly from your employer, or proof of substantial liquid assets that reduce the bank's risk.
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How do US taxes interact with owning property in Panama?
Do I have to declare the property to the IRS from Panama?
Simply owning a personal residence in Panama does not trigger a specific IRS reporting requirement, as foreign real estate is not considered a "specified foreign financial asset" under Form 8938 rules.
The IRS requires reporting when you generate income from your Panama property, such as rental income reported on Schedule E, or when you sell the property and must report capital gains on your return.
Ownership alone does not trigger Form 8938 or other special reporting, but if you hold the property through a foreign corporation or foundation, that entity interest may need to be reported separately.
Will I pay tax twice in the US and Panama in 2026?
As of early 2026, the risk of double taxation exists for US citizens owning property in Panama, but it can usually be mitigated through foreign tax credits and careful planning with a qualified CPA.
The US and Panama do not have a comprehensive income tax treaty, but they do have a Tax Information Exchange Agreement (TIEA) that facilitates information sharing rather than providing direct tax relief.
The Foreign Tax Credit allows you to offset income taxes paid to Panama against your US tax liability, reducing double taxation on rental income or capital gains, though the mechanics depend on your overall tax situation.
Property taxes paid in Panama may be deductible on your US federal return, but this depends on whether the property is personal use or rental, and SALT limitations may apply to personal residence property taxes.
Do I need FATCA reporting when buying in Panama?
FATCA reporting for US citizens purchasing property in Panama is typically triggered not by the real estate itself, but by the foreign bank accounts you open to manage the purchase and ongoing expenses.
FATCA reporting thresholds for foreign financial accounts are $50,000 at year-end (or $75,000 at any point) for US residents filing single, with higher thresholds for married filers and those living abroad.
FATCA reporting (Form 8938) focuses on specified foreign financial assets like bank accounts and securities, while FBAR (FinCEN Form 114) covers foreign financial accounts with aggregate balances over $10,000 at any point during the year.
Consulting a US CPA before buying property in Panama is strongly recommended, particularly to discuss questions about FBAR and FATCA triggers, foreign entity reporting if you use a Panamanian company, and how to structure ownership for tax efficiency.
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.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Panama, we always rely on the strongest methodology we can … and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why It's Authoritative | How We Used It |
|---|---|---|
| Panama Constitution (Tribunal Electoral) | Panama's highest-level legal text from an official government domain. | We used it to confirm the border-zone land ownership restriction for foreigners. We also verified what "restricted areas" means in Panama's legal framework. |
| Panama Digital (Property Registration) | Official government portal for property registration procedures. | We used it to explain how ownership becomes legally enforceable through registration. We referenced it to describe the closing process finish line. |
| DGI Panama (ITBI Form 106) | Tax authority's official page for real estate transfer tax filing. | We used it to confirm the 2% transfer tax rate and filing process. We anchored buyer tax discussions in this official reference. |
| SBP (Bank Superintendency) Interest Rates | Banking regulator's official statistics on lending rates. | We used it to ground mortgage rate discussions in official data. We avoided relying on broker anecdotes for typical interest rates. |
| IRS Form 8938 Guidance | Official IRS guidance on foreign asset reporting requirements. | We used it to clarify when foreign real estate is and is not reportable. We highlighted how company ownership changes US reporting obligations. |
| IRS FBAR Overview | Official IRS guidance on foreign bank account reporting. | We used it to explain that FBAR covers financial accounts, not property. We focused on the Panama bank account trigger most buyers encounter. |
| UN DESA International Migrant Stock | Standard international dataset for migrant population estimates. | We used it to support our estimate of the American presence in Panama. We avoided unreliable expat forum numbers. |
| ANATI (National Land Authority) | Government entity responsible for land administration and concessions. | We used it to explain state land and concession concepts affecting coastal areas. We clarified the difference between titled property and concession rights. |
| US Treasury TIEA Announcement | Official US government announcement on Panama tax cooperation. | We used it to confirm the active US-Panama Tax Information Exchange Agreement. We explained what this means for American property owners. |
| Law 66 (2017) Panama | Official government PDF of property tax reform legislation. | We used it to support the annual property tax framework explanation. We referenced it for the PFTV primary residence concept. |
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