Inheritance and probate in Panama: what happens to a foreign owner's property.
// Short answer
Panama abolished its inheritance tax from 1 January 1986, and inheriting pays no transfer tax. Succession to property in Panama follows Panamanian law, wherever the deceased lived, and Panama has no forced heirs: a will can leave property freely, as long as maintenance is secured for dependants who need it. A joint will made abroad is not valid in Panama, so couples need separate wills. The succession is heard by the court where the property is.
Rules and rates as of October 2026. This explains the rules and where they are written; it is not legal advice on an estate.
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Which law decides who inherits property in Panama?
The law of the place where the property is, even when the deceased was domiciled abroad (Private International Law Code, article 52). For residents or foreigners with property in Panama, freedom of testation is subject to Panamanian law (article 51).
A will is valid in form under the law of the place where it was made, and wills made abroad by foreigners are valid, with one exception: a joint will (two people in one document) made abroad is not valid in Panama, even where the law of that country allows it (article 55). A foreign judgment adjudicating the property has force in Panama unless it conflicts with rights under Panamanian law.
Is there forced heirship in Panama?
No. Anyone with capacity may leave their property freely by will, as long as maintenance is secured for qualifying children, parents, a spouse and disabled children while they need it (Civil Code article 778).
That makes a Panamanian will, or a foreign one valid in form, the main planning tool.
Panama estate pack
Own property in Panama? What your heirs will face, worked out
No inheritance tax since 1986 and no transfer tax on inheriting. Why a joint will made abroad is not valid, free testation and the maintenance duty, the court route step by step, and a 7-point checklist to take to a lawyer.
Is there inheritance tax in Panama?
No. The inheritance tax (impuesto de asignaciones hereditarias) was abolished by Law 22 of 1985, from 1 January 1986, and the 2% property transfer tax does not apply to inheritances (Law 106 of 1974, article 2).
Panama has no estate tax treaty with the UK or the US, so a British or American estate gets no treaty relief for Panamanian property. Taxes as owner, and the transfer tax and capital gains tax a later sale pays: Panama property tax for foreigners. The court for the succession is the one where the deceased's assets are; no official source gives a typical length. The registry record the heirs receive: the Panama public registry explained.
Sources
Frequently Asked Questions
Is there inheritance tax in Panama?
Which law applies to a foreigner's property in Panama on death?
Does Panama have forced heirship?
Is a joint will valid in Panama?
Header photo: Dr. Thomas Liptak, CC BY-SA 4.0, via Wikimedia Commons. All credits: image credits.