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
Americans can buy, own, and sell property in Panama with nearly the same rights as local citizens. The process is straightforward but requires understanding specific regulations, tax implications, and best practices to avoid common pitfalls that cost foreign buyers thousands of dollars.
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.
Americans enjoy full property ownership rights in Panama without residency requirements, with exceptions for border areas and beachfront zones.
The buying process typically takes 6-8 weeks and involves legal representation, title verification, and payment of a 2% transfer tax.
| Aspect | Details | Cost/Timeline |
|---|---|---|
| Ownership Rights | Full ownership like locals, except restricted zones | No residency required |
| Purchase Process | Remote purchase possible with power of attorney | 6-8 weeks typical |
| Transfer Tax | 2% of property value or sale price | Paid at closing |
| Property Tax | First $120,000 exempt, then 0.5-0.7% | Annual payment |
| Mortgage Options | Available to foreigners with higher requirements | 30-50% down, 7-9% rates |
| Popular Areas | Panama City, Boquete, Coronado beaches | $150K-$1M+ price range |
| Legal Representation | Highly recommended though not mandatory | 1-2% of purchase price |
Can Americans buy property in Panama the same way locals can, or are there restrictions?
Americans enjoy full property ownership rights in Panama with the same legal protections as Panamanian citizens.
As of September 2025, foreigners can buy, own, and sell property without requiring residency, citizenship, or special permits. The Panamanian constitution guarantees property rights to foreign nationals, making it one of the most foreigner-friendly real estate markets in Central America.
However, specific restrictions apply to certain zones. Americans cannot purchase land within 10 kilometers of international borders, in protected indigenous territories, or own the first 22 meters from the high-tide line on beaches, which remains public domain. Many beachfront properties and island lands are classified as leaseholds rather than titled properties.
These restrictions primarily affect border areas with Costa Rica and Colombia, plus specific coastal zones. The vast majority of residential and commercial properties in major cities like Panama City, suburban areas, and popular expat destinations remain fully available for foreign ownership.
It's something we develop in our Panama property pack.
Do Americans need residency, a specific visa, or any permits to buy and own property in Panama?
No residency, visa, or special permits are required for Americans to purchase property in Panama.
You can buy property as a tourist using the standard 180-day entry stamp that Americans receive upon arrival. The purchase process doesn't require any immigration status beyond legal entry into the country. This policy makes Panama particularly attractive for Americans seeking international real estate investments or vacation homes.
While property ownership doesn't automatically grant residency, it can support certain visa applications. Americans who own property may qualify more easily for the "Friendly Nations Visa," which provides temporary residency and can lead to permanent residency after five years. Property ownership demonstrates ties to Panama and financial stability.
The property ownership can also support other residency programs, such as the investor visa, which requires demonstrating economic ties to the country. However, these are optional pathways for those seeking to live in Panama long-term, not requirements for property ownership.
Is it necessary to be physically present in Panama to complete a property purchase, or can it be done remotely?
Property purchases can be completed entirely remotely through a power of attorney granted to a Panamanian lawyer.
The remote purchase process requires preparing and notarizing a special power of attorney document in the United States, which must be apostilled by the Secretary of State in the state where it's notarized. This document grants your Panamanian attorney the legal authority to act on your behalf throughout the entire transaction.
Your attorney can handle property searches, negotiations, due diligence, contract signing, and closing procedures. All communications typically occur via email, video calls, and secure document sharing platforms. Wire transfers handle the financial transactions, eliminating the need for physical presence during closing.
While remote purchases are legally valid and commonly used, many buyers prefer to visit the property at least once before purchasing, especially for higher-value transactions. This allows personal inspection and better understanding of the neighborhood, infrastructure, and local market conditions.
What taxes or fiscal implications should Americans expect when buying, owning, or selling property in Panama?
| Tax Type | Rate/Amount | When Due |
|---|---|---|
| Property Transfer Tax | 2% of registered value or sale price (whichever higher) | At closing |
| Annual Property Tax | First $120,000 exempt; 0.5-0.7% above exemption | Quarterly payments |
| Capital Gains Tax | 10% on actual profit | Upon sale |
| Withholding on Sale | 5% of total sale price | Withheld at closing, refundable if overpaid |
| Rental Income Tax | Variable rates based on structure | Annual filing required |
| Legal/Closing Costs | 1.5-2% of purchase price | At closing |
| Notary Fees | Typically 1% of transaction value | At closing |
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What is the step-by-step process for purchasing a property, and which documents are typically required?
The property purchase process in Panama follows a structured seven-step procedure that typically takes 6-8 weeks to complete.
First, conduct property research and selection, requiring your passport copy and proof of funds. Next, assemble your professional team by hiring a licensed real estate agent and attorney, signing engagement letters with both parties. The third step involves making a written offer and negotiating terms with the seller.
Step four requires signing a "Promesa de Compraventa" (Promise to Purchase contract) and paying a deposit, usually 10% of the purchase price. This legally binds both parties to the transaction. During step five, your attorney conducts due diligence, including title searches, lien checks, and tax verification.
Step six involves signing the notarized public deed and transferring the remaining funds. All parties must appear before a Panamanian notary, or you can be represented by your attorney with proper power of attorney. Finally, step seven requires registering the property with the Public Registry, transferring legal ownership to your name.
Required documents include apostilled and translated passport copies, proof of funds, promissory contracts, title certificates, tax clearances, cadastral plans, and the final public deed. All foreign documents must be translated into Spanish by a certified translator and apostilled in their country of origin.
Is it mandatory to hire a lawyer when buying property in Panama, and what role do they play?
Hiring a lawyer is not legally mandatory but is highly recommended for all property transactions in Panama.
Lawyers provide essential services including title verification, lien searches, tax status confirmation, contract review and drafting, and ensuring compliance with local regulations. They coordinate with notaries, who are legally required for finalizing all property transactions in Panama.
Your attorney serves as your legal representative, especially important when purchasing remotely through power of attorney. They handle negotiations, ensure proper document preparation, coordinate closing procedures, and protect your interests throughout the transaction.
Legal fees typically range from 1-2% of the purchase price, varying based on property value and transaction complexity. This investment provides crucial protection against title defects, undisclosed liens, tax issues, and regulatory compliance problems that could cost significantly more to resolve later.
It's something we develop in our Panama property pack.
Do banks in Panama actually offer mortgages to foreigners, and if so, what are the typical rates, conditions, and best practices to get approved?
Yes, Panamanian banks offer mortgages to foreigners, but with stricter terms than those available to local residents.
Foreign borrowers typically face down payment requirements of 30-50%, compared to 10-20% for locals. Interest rates range from 7-9% for foreigners versus 4.5-7% for Panamanian citizens. Loan-to-value ratios are limited to 60-70%, and loan terms usually extend up to 15-20 years maximum.
Major lenders include Banco General, Banistmo, Global Bank, BAC Credomatic, and Scotiabank. Each institution has specific requirements, but all demand extensive documentation including foreign tax returns from the past two years, proof of income and employment, bank statements, credit reports, and sometimes establishment of a local bank account.
To improve approval chances, consider obtaining temporary residency status, maintaining a local bank account for several months before applying, providing substantial down payments, and demonstrating stable income sources. Having a local legal entity or business structure may also improve terms and approval odds.
The application process typically takes 30-45 days, requiring patience and thorough documentation. Working with a mortgage broker familiar with foreign applicant requirements can streamline the process and improve success rates.
Which neighborhoods or regions in Panama are most popular among Americans, and why?
Panama City leads as the most popular destination for Americans seeking urban lifestyle, employment opportunities, and strong rental yields of 5-7% annually.
Boquete attracts retirees and lifestyle buyers with its spring-like climate, lower cost of living, and established expat community. The mountain town offers temperatures 10-15 degrees cooler than coastal areas, making it ideal for Americans seeking relief from tropical heat.
Coronado and the Pacific beach corridor appeal to Americans wanting beachfront lifestyle and vacation rental opportunities. These areas offer resort-style amenities, golf courses, and proximity to Panama City, making them popular for both primary residences and investment properties.
PedasĂ has gained popularity among Americans seeking authentic Panamanian culture with growing tourism infrastructure. Bocas del Toro attracts younger Americans and digital nomads with its Caribbean vibe and lower property costs. El Valle offers mountain living with hot springs and outdoor activities.
Americans choose these areas for diverse reasons: urban convenience, retirement affordability, beach lifestyle, investment potential, or authentic cultural experiences. Each region offers different advantages depending on lifestyle preferences and investment goals.
Which areas currently offer the best opportunities for living, renting out, or capital appreciation, based on livability, rental yields, rental income potential, tourism demand, and growth forecasts?
Panama City offers the strongest combination of rental yields, capital appreciation potential, and livability for American investors and residents.
The capital delivers gross rental yields of 5-7% annually, the highest in the country, driven by strong demand from business travelers, expats, and local professionals. High-rise condominiums in Punta Pacifica, San Francisco, and Bella Vista generate consistent rental income with occupancy rates exceeding 85% in quality buildings.
Coronado and Playa Blanca present excellent short-term rental opportunities, capitalizing on growing beach tourism and weekend visitors from Panama City. These areas show strong seasonal demand and potential for 8-12% gross yields through vacation rental platforms, though occupancy is more seasonal.
Boquete demonstrates steady capital appreciation of 3-5% annually with strong rental demand from retirees and long-term expats. The area offers excellent livability with established healthcare, dining, and community infrastructure specifically designed for American preferences.
Growth forecasts favor areas benefiting from new infrastructure projects, including Pacific beaches receiving improved highway access and emerging suburbs around Panama City with metro line extensions. Tourism demand continues growing in established beach destinations while mountain towns maintain steady appreciation.
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 current breakdown of property prices across cities and regions in Panama?
Property prices in Panama vary significantly by location, with Panama City commanding the highest values and mountain towns offering more affordable options.
Panama City properties range from $150,000 for older apartments in secondary neighborhoods to over $1 million for luxury high-rises in Punta Pacifica. Modern condominiums in prime areas like San Francisco and Bella Vista typically cost $200,000-$500,000, while penthouses and luxury units exceed $800,000.
Boquete property prices span $200,000-$600,000, with mountain view homes and gated community properties commanding premium prices. Quality construction and established neighborhoods drive values, while fixer-uppers and rural properties start around $150,000.
Coronado beach properties range $180,000-$700,000, depending on proximity to beach, golf course access, and property size. Beachfront condominiums start around $250,000, while oceanfront houses exceed $500,000. Playa Blanca and other Pacific beaches show similar pricing with slight variations based on development level.
Bocas del Toro offers more affordable options from $120,000-$500,000, particularly for island properties and unique locations. Prices reflect the more remote location and developing infrastructure, offering opportunities for buyers seeking value and future appreciation potential.
What are the classic mistakes or pitfalls that foreigners, especially Americans, should avoid when buying property in Panama?
The most costly mistake Americans make is purchasing untitled "Right of Possession" (ROP) land without understanding the significant legal and financial risks involved.
ROP properties lack formal title registration, making them difficult to finance, insure, or resell. Many Americans lose money buying ROP land thinking they can easily convert it to titled property, but the process is expensive, time-consuming, and often impossible due to legal complications or conflicting claims.
Skipping proper due diligence represents another expensive pitfall. Americans often fail to verify clear title, outstanding liens, unpaid taxes, or utility debts. These issues become the new owner's responsibility and can cost thousands of dollars to resolve after purchase.
Overpaying due to lack of market knowledge costs Americans significantly. Without local market benchmarks, foreign buyers often pay 20-30% above fair market value, especially in tourist areas where prices are inflated for foreign purchasers.
Other common mistakes include:
- Purchasing in restricted zones near borders or beaches without proper legal verification
- Failing to properly apostille and translate documents, causing closing delays and additional costs
- Attempting transactions without qualified legal representation
- Ignoring property tax obligations and utility transfer requirements
- Assuming US real estate practices apply in Panama without understanding local procedures
What tips or strategies can help Americans make the smartest choice when entering the Panamanian real estate market?
Always hire a reputable local attorney with verified credentials and positive client reviews to guide your transaction and protect your interests.
Purchase only titled property registered with the Public Registry, avoiding Right of Possession (ROP) properties unless you fully understand and accept the associated risks. Titled properties provide clear ownership, financing options, and easier resale opportunities.
Conduct thorough due diligence on every property, including title verification, lien searches, tax status confirmation, and utility account transfers. Your attorney should provide written reports confirming clear title and no outstanding obligations.
Budget for total closing costs of 1.5-2% of purchase price, plus legal fees, taxes, and potential repairs or improvements. Factor in ongoing costs including property taxes, utilities, maintenance, and management fees if purchasing investment property.
Consider working with both local and international real estate agents to access broader property selections and market insights. Local agents often know specific neighborhood dynamics and potential issues, while international agents understand American buyer preferences and concerns.
If seeking mortgage financing, establish a local bank relationship and consider obtaining temporary residency well before starting your property search. This preparation can improve financing terms and streamline the approval process.
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.
Americans can successfully navigate Panama's real estate market by understanding the legal framework, following proper procedures, and working with qualified professionals.
The combination of foreigner-friendly ownership laws, diverse property options, and strategic location makes Panama an attractive destination for American property buyers seeking investment opportunities or lifestyle changes.
Sources
- Taxes for Expats - Buying Property in Panama Guide
- Panama Sovereign - Real Estate Laws for Foreign Buyers
- The LatinVestor - Property Panama American
- Global Property Guide - Panama Buying Guide
- Limitless Legal - Property Purchase Migration Benefits
- The LatinVestor - Panama Property Foreigner
- Bright Tax - Buy Property in Panama
- Casa Solution - Buying Process
- Casa Solution - Mortgage Guide for Expats