There are no restrictions for foreigners who intend to purchase a house in Panama, except for Article 121 of the Panamanian Tax Code. This states that foreign people or foreign Panamanian corporations cannot buy a property located less than ten kilometers from a frontier nor on island.
Also in the favor of expats is that there is more supply than there is demand for buyers, which makes it easier for negotiating a price.
On average, one can find 2-bedroom houses and condos for give or take $100,000 USD. A three-bedroom house or condo will most likely be $200,000 to $250,000 USD. If you are interested in a property that might be older and not in the financial district, it could cost between $80,000 to $100,000 USD depending on the number of bedrooms and amenities.
Panama is also known for its high-end condominiums in the sky high buildings of the financial district. Many of them have such luxurious features like swimming pools, saunas, security and even golf courses. If that is the type of lifestyle you are accustomed to, then properties that will offer that will often start as low as $350,000 USD. Some newer properties might even be exempt from property tax for up to 15 years, so be sure to ask about that during your search. The average mid-range property tax will be around $1,000 to $1,300 USD per year.
One of the tricky things about moving to a new country is dealing with the cultural differences when it comes to navigating a property search. It is good to understand a few for Panama.
Search engines can help you get a general understanding of the current market and find up-to-date listings. Most sites even allow you to create a profile and save your favorite properties or receive notifications by email about them. Here are some popular real estate sites:
Several papers have a helpful classifieds section. Not so many of these papers have listings through their website, so you’ll have to be old-fashioned and pick-up a physical copy. But the most popular websites for classifieds in general that aren’t newspapers are Encuentra 24 and Craigslist.
Facebook expat and local groups like Panama Rentals and Relocation are a great way to find properties and create an instant correspondence with the lister. You can also look out for signs in public places if you are in Panama while you are looking for a rental space.
Estate agents are useful for getting on the fast track to finding a rental property. They will know all the nuances and details of the law for buying real estate. Make sure to find an agent who speaks English as the written contract you sign will be in Spanish. An estate agent can explain the terms of the contract to you. Never sign any contract you are given before having a licensed real estate attorney review it first and explain it to you. Estate agents usually ask for a commission of four to five percent.
To make an offer on a property, you must notify the owner or the agent that you want to buy the property. If it is still available, you must make a 30% down payment.
There are several common real estate contracts in Panama:
The seller will pay a 30% down payment fee after signing a Promise to Purchase contract. Then the final payment of the balance will be made after the title of seller is successfully transferred to the buyer. This transfer occurs when the public deed of the transfer is signed and recorded at the public registry.
In order to avoid paying the seller who doesn’t file the deed at the Public Registry, hire an escrow agent who will be able to pay the seller as well as file the deed.
Title Transfer Tax - You must pay a 5% share transfer tax, unless you form a corporation to purchase the property.
Notary Fee - You will have to pay a minimal fee when you submit the old title, all previous land documents, and the new tax form to the Notary Public. But if you have a lawyer, they can submit those documents and draft the final purchase and sale contract.
Once the final payment has been made, the deed to the property is then given to the buyer's solicitor, including the conveyance or transfer of ownership. The estate agent will then be allowed to release the keys on to you. There are several other last steps:
Buying a property through auction can save you a lot of money in Panama. For one, auctioned properties do not require payment of the social interest rate. If you buy a property at auction, you can also receive up to 95% financing from a bank, and properties are up to 60% less than the real estate market value in Panama. Here are the steps to acquiring an auction property: