Panama Real Estate: A Guide to Renting or Buying Property

Panama Real Estate: Panama is a top destination for expatriates, retirees, and investors due to its stable economy, tax incentives, and welcoming attitude toward foreign property buyers. Whether you’re considering renting or purchasing property, understanding the process and legalities is essential. This guide provides a detailed overview of renting and buying property in Panama as a foreigner.

Renting Property in Panama

Finding a Rental Property

1. Online Listings: Websites such as Encuentra24, Compreoalquile, and Facebook Marketplace.
2. Real Estate Agencies: Working with a licensed agent can simplify the process.
3. Local Networking: Recommendations from expats and local residents can lead to good rental deals.

Rental Agreements

1. Lease Duration: Contracts typically last from six months to one year, but shorter and long-term options are available.
2. Security Deposit: Usually equivalent to one or two months’ rent.
3. Utilities and Fees: Clarify if rent includes water, electricity, internet, or maintenance fees.
4. Documentation: Ensure the lease agreement includes:
   • Rent amount and payment terms
   • Lease duration
   • Responsibilities for repairs and maintenance

Panama Real Estate Costs

Rental prices vary based on location:

• Panama City: $700 – $3,500 USD per month (apartments and houses)
• Beach areas: $800 – $2,500 USD per month
• Rural areas: $400 – $1,500 USD per month

Buying Property in Panama

Can Foreigners Own Property?

Yes, foreigners can own property in Panama with the same rights as Panamanian citizens. Some key factors include:

1. Fee Simple Ownership: Foreigners can own land and homes in their name.
2. Restrictions: Foreigners cannot own land within 10 kilometers of international borders.
3. Concession Land: Some beachfront properties fall under government concessions, requiring lease agreements.

Steps to Buying Property

1. Identify Your Budget and Needs
   
   • Determine if you’re purchasing for personal use, rental income, or investment.
   • Research property values in different regions.
2. Hire Professionals
   
   • Work with a licensed real estate agent and a reputable attorney to handle legal matters.
3. Conduct Due Diligence
   
   • Verify property ownership through the Public Registry of Panama.
   • Ensure the property is free of debts or legal issues.
4. Sign a Promise to Buy Agreement
   
   • This contract outlines the sale conditions, including price, deposit, and closing terms.
5. Transfer the Property
   
   • A lawyer drafts the Escritura Pública (public deed) before a notary.
   • The buyer pays the necessary taxes and registration fees.
6. Register the Property
   
   • The property is officially transferred and recorded in the buyer’s name at the Public Registry.

Costs of Buying Property

In addition to the property price, buyers should budget for:

• Transfer Tax: 2% of the registered property value
• Legal Fees: 1%-2% of the property price
• Notary Fees: Approximately 1%
• Real Estate Agent Commission: Typically 3%-5%
• Property Taxes: 0.5%-1% annually (some exemptions apply for new developments)

Key Considerations

Residency and Property Ownership

• Buying property does not automatically grant residency.
• However, investing $300,000 USD or more in real estate qualifies for the Investor Visa, leading to permanent residency.

Legal Restrictions

• Avoid purchasing untitled land.
• Be cautious when buying within government concession zones.

Practical Factors

• Consider infrastructure, transportation, security, and local amenities.
• Inspect the property for weather risks like flooding and earthquakes.

Frequently Asked Questions (FAQ)

1. Can I finance a property purchase as a foreigner?

Yes, but local bank financing is limited for non-residents. Many foreigners use cash payments, seller financing, or international lenders.

2. Is it better to rent or buy in Panama?

This depends on your long-term goals. Renting provides flexibility, while buying offers investment potential and stability.

3. What is the average interest rate for mortgages in Panama?

Interest rates typically range between 5% and 8% annually, depending on the lender and applicant profile.

4. Can I inherit property as a foreigner?

Yes, foreigners can inherit property in Panama without restrictions.

5. Can I start the property search while living abroad?

Yes, you can browse online listings and conduct virtual tours. However, an in-person visit is recommended before purchasing.

Conclusion

Renting or buying property in Panama can be a rewarding experience with proper planning. Whether you seek a short-term rental or a long-term investment, working with professionals and understanding local laws will ensure a smooth process. By making informed decisions, you can find the perfect property and enjoy all that Panama has to offer.

Meet An Expert

Meet with an expert today during our open office hours video calls. You will be able to ask any question you might have regarding visas, renting and buying property or just practical advice on moving, while in a group setting. It is 100% free and you can attend on your own schedule.