10 Things to Know Before Buying Real Estate in Panama

Panama is an emerging real estate hotspot for expats, retirees, and investors alike. With its dollar-based economy, tropical climate, and tax incentives, the country has become an attractive destination for owning property. But before you sign on the dotted line, here are 10 key things to know to avoid surprises and secure a smart deal.

1. Foreigners Can Own Property in Panama

Good news—foreigners have the same property rights as locals in most areas. You can buy, sell, and rent real estate freely, except for land within 10 kilometers of national borders, which is restricted.

2. You Don’t Need to Be a Resident

You don’t have to live in Panama or hold a visa to purchase real estate. However, owning property can support your residency application if you plan to stay long-term.

3. Always Work with a Licensed Real Estate Agent

The real estate industry in Panama is partially regulated. Protect yourself by working with a licensed broker registered with the Technical Board of Real Estate. Ask for credentials up front.

4. Get a Real Estate Attorney

Hiring a bilingual Panamanian attorney is a must. They’ll ensure your contract is legally binding, verify property titles, and handle the closing process correctly. Don’t rely solely on your agent for legal advice.

5. Title Verification Is Critical

Not all properties in Panama have clean or titled ownership. Some may be "possessory rights" or involve squatters’ claims. Always request a full title search to avoid legal headaches.

6. Closing Costs Add Up

By law the seller pays the 2% transfer tax and the tax on their gain, although a resale contract can shift or split costs. The buyer usually pays notary and Public Registry fees, their own lawyer and, with a mortgage, the bank's costs. Our guide to closing costs in Panama sets out each item and who pays it.

7. Property Taxes Are Attractive

Annual property tax is charged on the registered (cadastral) value. For a home registered with the DGI as your primary residence, the first $120,000 is exempt, then 0.5% applies up to $700,000 and 0.7% above that. Other property is exempt only up to $30,000, with rates from 0.6% to 1% above it. Registration isn't automatic, and new homes may qualify for a temporary exemption on the building; see our property tax guide.

8. Location Determines Value and Liquidity

Beachfront, mountain, and urban properties can vary drastically in price and resale value. Research local market trends in areas like Panama City, Boquete, Coronado, and Bocas del Toro before choosing your spot.

9. Financing Can Be Tricky

Local banks may not offer financing to non-residents, and if they do, rates and terms might not be favorable. Many foreign buyers choose to pay in cash or secure financing in their home country.

10. Infrastructure May Vary by Region

While Panama City boasts modern amenities and infrastructure, rural or coastal areas might lack reliable internet, roads, or utilities. Visit multiple times before committing—and talk to locals.

Ready to Buy Smart in Panama?

Buying real estate in Panama can be a great move, but it pays to be prepared. Do your homework, work with professionals, and take your time before making a major investment.

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