Buying property in Panama: what it costs, what you own, and who files what

Panama charges 2% to transfer a property, and it is the seller who files it. Nearly every buyer's guide on the first page of Google tells you to budget "3.4% transfer tax" as a buyer closing cost. That figure is not what the tax authority publishes, and the party it lands on is not you.

This guide covers what a foreigner is actually allowed to buy, what the transfer genuinely costs and who pays each piece, the difference between land you own and land you merely occupy, and the residency threshold that sits at USD $300,000. Every figure below traces to the institution that sets it, with the date we checked it. Where we have not been able to verify something, we say so rather than repeating what the other pages say.

Key takeaways

• The transfer tax is 2%, not 3.4%, and it is calculated on the land or cadastral value rather than your purchase price. Dirección General de Ingresos, Formulario 106, checked August 2026.
• The seller files both tax forms. Form 106 for the transfer tax and Form 107 for capital gains are presented by the seller, and must be paid within the same calendar month as the declaration. DGI, checked August 2026.
• The Qualified Investor residency threshold for real estate is B/.300,000, and it must be a property free of liens. Decreto Ejecutivo 193 of 15 October 2024, Article 3.1.
• The widely reported increase to $500,000 on 15 October 2026 does not appear in that decree. See the section below. The $500,000 figure in the law is the securities route, not real estate.
• Buying under that route requires two certifications you should be pulling anyway: title from the Registro Público, and value from ANATI. Decreto Ejecutivo 193, Article 3.1.

What the transfer actually costs, and who pays which part

The Dirección General de Ingresos publishes the transfer tax as 2%, assessed on el terreno o valor catastral, the land or cadastral value. That last point matters more than the rate. Cadastral value is the figure registered for tax purposes, and on older properties it frequently sits well below what you are paying. The tax follows the registered value, not the price on your contract.

Two forms go with a sale:

Both must be declared and paid within the same calendar month as the declaration, and both have to clear before the deed can be recorded at the Registro Público. That sequencing is the practical point for a buyer. You are not the filer, but you are the one who cannot register ownership until the seller has filed. A seller who is slow, disorganised, or short of cash becomes your problem at exactly the moment your money has moved.

So the number to negotiate is not "who pays the transfer tax." It is what happens to your deposit if the seller has not filed by an agreed date.

What we have not verified. Attorney fees, notary costs and registration fees are commonly quoted at 1% to 1.5%, 1% and around 0.5% respectively. We have not yet traced those to a published schedule, so we are not stating them as fact. When we do, they will appear here with the source.

What a foreigner is allowed to buy

A foreign national can own property in Panama in their own name, with the same rights as a citizen: buy, sell, mortgage, lease and bequeath. No residency requirement, no local partner, no nationality quota.

The exception that is always cited is titled land within 10 kilometres of an international border. We are treating that as unverified until we have read the constitutional text ourselves rather than a broker's summary of it. If you are buying near the Costa Rican or Colombian frontier, have your attorney confirm it against the text before you commit.

You can hold in your own name or through a Panamanian company. Personal name is simpler and cheaper and is what most first-time buyers use for a home they intend to live in. A company adds annual maintenance and accounting, and earns its keep on investment holdings, on anything with several owners, or where estate planning matters.

Titled land versus Rights of Possession

This is the distinction that costs foreign buyers the most money in Panama, and it is the reason this site exists.

Titled land is registered at the Registro Público with a finca number. There is a public record of who owns it and what is charged against it. You can search it, insure it, and mortgage it.

Rights of Possession, derecho posesorio, is a recognised right to occupy land the state still owns. It can be bought and sold, and it is frequently marketed in exactly the same language as titled property, at prices that look like a bargain. It is not ownership. It cannot be mortgaged by a bank, and converting it to title runs through ANATI, the national land titling authority, on a timeline nobody will guarantee you.

Coastal and island land is where this bites hardest. A waterfront lot at a price that seems too good against the titled market usually is, and the gap is the word on the paperwork.

Notice that the residency route in the next section makes you prove title. Decreto Ejecutivo 193 requires a Registro Público certification of ownership and an ANATI certification of value. If a property cannot produce both, it does not qualify, which is a reasonable test to apply even if you have no interest in the visa.

The $300,000 residency threshold, and the increase that is not in the decree

Buying property is one qualifying route to permanent residency as a Inversionista Calificado, a Qualified Investor.

Decreto Ejecutivo 193 of 15 October 2024, which amends Decreto Ejecutivo 722 of 2020, sets it out in Article 3.1: a foreign national who invests from B/.300,000 in the purchase of property in Panama, free of liens, is eligible. Balboas are pegged to the dollar at 1:1, so that is USD $300,000. If you pay B/.300,000 liquid on a property worth more, the remainder can be financed through a local bank mortgage.

Real estate is the cheapest of the three qualifying routes, and by some distance:

• Real estate$300k
• Securities$500k
• Fixed deposit$750k

Decreto Ejecutivo 193 de 15 de octubre de 2024, art. 3 · balboas pegged 1:1 to USD · checked August 2026

Each carries its own conditions. Real estate must be free of liens and needs the two certifications above. The securities route runs through a brokerage licensed by Panama's Superintendencia del Mercado de Valores and the holding must stay in place five years. The fixed deposit needs a five-year minimum term at a general-licence bank, free of encumbrances, with the funds coming from a foreign source.

Now the part worth reading twice. A large number of pages currently state that the $300,000 real-estate threshold rises permanently to $500,000 on 15 October 2026. We read Decreto Ejecutivo 193 in full, all five pages of the Gaceta Oficial text. It contains no sunset date and no scheduled increase. Article 6 says only that the decree takes effect on promulgation. The B/.500,000 figure that appears in it is the securities route in Article 3.3, which is a different thing entirely.

There is a plausible source for the date. The decree's preamble cites Decreto Ley 3 of 2008, whose Article 20 requires the Executive to review the minimum investment amounts every two years. Decree 193 is dated 15 October 2024, so the next review falls due on 15 October 2026. A review is not an increase. It is a date on which the government is obliged to look at the numbers, and it may raise them, lower them, or leave them alone.

We are not telling you the threshold will not change. We are telling you that as of August 2026 the change is not in the law, and that anyone presenting it as settled has not read the decree. If you are timing a purchase around it, that is a material difference.

The sequence, and where it goes wrong

1. Engage your own attorney first. Not the seller's, not the agency's. This is the single decision that determines whether the rest of the list gets done properly.
2. Title search at the Registro Público. Confirms the seller is the registered owner, and surfaces mortgages, liens and embargoes against the finca.
3. Establish whether it is titled or Rights of Possession. If nobody will put the answer in writing, treat that as the answer.
4. Promesa de compraventa, the promise-to-purchase contract, with the deposit held somewhere that is not the seller's account and with the release conditions written down.
5. Escritura pública, the public deed, executed before a notary.
6. Seller files DGI Forms 106 and 107 and pays. Registration cannot proceed until this clears.
7. Registration at the Registro Público. You are not the owner until this step completes. Not at signing, not at handover of keys.

The gap between steps 5 and 7 is where foreign buyers get hurt, because it feels finished and is not.

When the honest answer is don't

Do not buy Rights of Possession as an investment. As a lifestyle decision, with the risk understood and the price discounted accordingly, it can be a rational choice. As an asset you expect to resell to the next foreigner at a profit, you are betting that buyer will be less careful than you were.

Do not buy pre-construction on a promise alone. The residency decree is instructive here: where the investment runs through a promise-to-purchase on an unbuilt unit, Article 3.2 requires a bank guarantee covering the full investment, renewed annually until the property is built, segregated and registered in the investor's name. The government does not accept a developer's word on an unbuilt property. Neither should you.

Do not buy to obtain residency if you do not want the property. The threshold is one route among several, and the fixed-deposit and securities routes exist precisely for people whose interest is the residency rather than the building. Buying real estate you did not want, in a market you do not know, to qualify for something a bank deposit also qualifies you for, is an expensive way to solve the wrong problem.

Do not treat cadastral value as market value. It governs your transfer tax, and on an older property it can sit far below the price. That is not a discount. It is a number kept for a different purpose, and it will be reassessed.

Frequently asked questions