Are there any programs for retirees regarding real estate purchases or real estate taxes in Panama?

As a foreigner in Panama you have no special exemptions or treatment when buying land or a residence.  There are a number of tax exemptions based on the value of the land or when the residence was constructed, these are the same exemptions that a Panamanian enjoys.

As a Pensionado (retired visa holder) there are some discounts on the cost of property registration and mortgages, but not on the property taxes or purchase cost.

As a Pensionado you will be able to apply for discounts on...

As a foreigner in Panama you have no special exemptions or treatment when buying land or a residence.  There are a number of tax exemptions based on the value of the land or when the residence was constructed, these are the same exemptions that a Panamanian enjoys.

As a Pensionado (retired visa holder) there are some discounts on the cost of property registration and mortgages, but not on the property taxes or purchase cost.

As a Pensionado you will be able to apply for discounts on your water bill, your rubbish removal bill, your electric bill and your land line telephone bill.  This discount is generally 25% of the base price, with potential limitations applied when you consume above certain levels.

Here in Panama, whoever you are, you pay your property tax on a graduated rate.  I may not remember the rates exactly and I could be a bit dated with my information, but I can give you an idea.  You pay nothing up to $30,000 of value.  From $30,000 to $50,000 you pay something close to 1.25%.  From $50,000 to $100,000, you’ll pay around 1.5%.  The rate just keeps going up like that.  So, using the example of the $300,000 house, in a very rough...

Here in Panama, whoever you are, you pay your property tax on a graduated rate.  I may not remember the rates exactly and I could be a bit dated with my information, but I can give you an idea.  You pay nothing up to $30,000 of value.  From $30,000 to $50,000 you pay something close to 1.25%.  From $50,000 to $100,000, you’ll pay around 1.5%.  The rate just keeps going up like that.  So, using the example of the $300,000 house, in a very rough range, you may pay approximately $6,000 a year of property tax.  However, the property tax you pay tends to stay at around what you purchased the house for. They don’t have a lot of folks that go out to do tax assessments.   They’re talking about doing a re-assessment, but it’s going to take them year to do in the city, and I don’t know when are we going to get around to doing it in the interior.
 
There has been a 20-year exemption on property tax if you build. Let’s say you paid $50,000 for your lot and you build a $150,000 house.  For 20 years you won’t pay anything on the $150,000.  You just pay taxes on the value of the lot (in this example, $50,000), and not for the improvements to the lot for 20 years.  At the end of 20 years, then you start paying the full value, in this example, the $200,000.  This exemption may have changed recently, so if you plan on using it, please check for the most current status of the law.  

There are no programs only for retirees regarding property taxes in Panama, but there is a property tax exemption for everyone, if the property qualifies.

 

In order to help achieve the Panamanian government’s goal of increasing new home construction, there is a property tax exemption in Panama for new construction.  The amount of years of the exemption depends on the price of the house, with fewer years exemption for more expensive homes.  For...

There are no programs only for retirees regarding property taxes in Panama, but there is a property tax exemption for everyone, if the property qualifies.

 

In order to help achieve the Panamanian government’s goal of increasing new home construction, there is a property tax exemption in Panama for new construction.  The amount of years of the exemption depends on the price of the house, with fewer years exemption for more expensive homes.  For example, a home up to US $120,000 will qualify for a 30-year tax exemption.  A home between $120,000 to $200,000 will qualify for a 20-year tax exemption.

Both Panamanians and foreigners qualify for the exemption.

The exemption is for new homes only, and is for the home and the land.

The exemption is transferrable.  This means that, if a property qualified for the property tax exemption in the past and you buy the property, you would be entitled to the time remaining on the exemption for that property. 

The Panamanian property tax system provides a tax break on new properties, which is a benefit provided to both foreigners and locals.  The terms of the tax break depend on the sales price of the property and is based only on the portion of the property assigned to construction cost, as opposed to the land. Properties with a construction cost above US $300,000 receive a tax break of up to 5 years. Properties from $120,000 up to $300,000 receive a tax break of up to 10 years, and...

The Panamanian property tax system provides a tax break on new properties, which is a benefit provided to both foreigners and locals.  The terms of the tax break depend on the sales price of the property and is based only on the portion of the property assigned to construction cost, as opposed to the land. Properties with a construction cost above US $300,000 receive a tax break of up to 5 years. Properties from $120,000 up to $300,000 receive a tax break of up to 10 years, and properties from $100,000 up to $120,000 receive a tax break of 20 years.
 
The portion of the property that is assigned towards the lot or land is subject to taxation but the improvement or the construction portion provides the tax benefits and tax breaks. It’s quite an interesting benefit. This tax benefit is both for Panamanians and foreigners. They usually ask for the date of the occupation to determine the start time of the tax break and there are a few other requirements but they are usually very attainable. It has nothing to do with your nationality, visa status, or even your age.  This tax exemption can be passed from owner to owner, so, if you buy a property that has time remaining on its exemption, you will be entitled to the remainder of the exemption, or can pass it on to new owners at a later date, until such time as the exemption is exhausted.

 

(New housing development  for the Cubita Group, Chitre, Panama, pictured.)

While there are no specific programs for retirees you can use the money that you have in your IRA or 401k to purchase real estate in Panama.  There are rules and regulations that you must follow specifically to avoid taxes and penalties.

 

(Beach side homes for surfers in Chiriqui, Panama, pictured.)

While there are no specific programs for retirees you can use the money that you have in your IRA or 401k to purchase real estate in Panama.  There are rules and regulations that you must follow specifically to avoid taxes and penalties.

 

(Beach side homes for surfers in Chiriqui, Panama, pictured.)