Panama property buying costs: every one-off fee, and who pays it.
// Short answer
Buying in Panama costs four things on top of the price: the 2% transfer tax, legal fees, notary fees, and, on the seller's side, the agent's commission. Global Property Guide puts the buyer's total at about 2.1% to 4.1%, and the swing is one question: who bears the transfer tax. Here is each cost.
What an agent can charge, who pays it and how to check their licence: real estate agent fees in Panama.
Rules and rates as of September 2026. Panama's investor-residency rules changed on 16 September 2026 and a short-rental tax bill is before the National Assembly, so check the dated items again before you sign. Every figure links to its source.
On this page
What are the one-off costs of buying property in Panama?
The 2% transfer tax (ITBI), legally the seller's, plus legal fees of about 2% and notary fees of about 0.10%, according to Global Property Guide. The agent's 3% to 5% is paid by the seller. Global Property Guide puts the buyer's total at about 2.1% to 4.1%, as of 2026.
| Cost | Rate | Who pays |
|---|---|---|
| Transfer tax (ITBI) | 2% | Legally the seller; contracts can allocate it differently |
| Legal fees | about 2% (Global Property Guide) | Buyer |
| Notary | about 0.10% (Global Property Guide) | Buyer |
| Agent commission | 3% to 5% (Global Property Guide) | Seller |
| Buyer's total | about 2.1% to 4.1% (Global Property Guide) | Depends on who bears the transfer tax |
Sources
Who pays the 2% transfer tax in Panama?
By law, the seller. The tax authority (DGI) and Panamanian practitioners treat the transferor as the taxpayer, but contracts can allocate it differently. Global Property Guide's cost table lists it as the buyer's cost. So the honest answer is: 2%, legally the seller's tax, and who actually pays it is negotiable.
Settle it in the promesa de compraventa, in writing, before the deposit is paid. It is the single biggest swing in your closing costs.
Sources
How is Panama's transfer tax calculated?
On the higher of two figures: the deed price, or the cadastral value the seller acquired at plus improvements plus 5% of that value for each full calendar year since acquisition, according to RC Group Panamá. The 2% rate itself rests on Law 106 of 1974 as amended, per the tax authority (DGI).
So on a property the seller has held for years, the tax base can sit above the price you agreed. The DGI's form page lists who files but does not spell out the 5% formula; the formula here is the practitioner's summary.
Is buying a new-build in Panama taxed differently?
Yes, for the seller. On a first sale of new housing, the developer's income tax uses a separate scale of 0.5% to 4.5%, depending on property type and value (Fiscal Code article 701(a), per PwC, reviewed August 2026). That is an income tax on the developer, not a transfer tax.
A new first-sale property is also the only kind that qualifies for the B/.300,000 Qualified Investor residency route since 16 September 2026: foreign ownership and residency in Panama.
Sources
Is VAT charged on a property purchase in Panama?
No. Panama's VAT (ITBMS) is 7% in general, but it is a tax on goods and services, not on the transfer of real estate. Real estate transfers fall under the transfer tax or the new-housing regime instead, according to the tax authority (DGI).
The annual costs that follow the purchase: Panama property tax for foreigners.
Sources
What does a round trip cost in Panama, buying and selling?
Global Property Guide puts the round-trip cost at about 7.1% to 9.1%, buying and later selling, depending on who bears the transfer tax. On the seller's side, the agent commission of 3% to 5% is the largest item. The round-trip figure does not replace the capital-gains tax, which is worked out on the gain.
The seller's side in full: selling property in Panama as a foreigner. The overview: buying property in Panama as a foreigner.
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See the $99 report, page by pageWho pays the closing costs in Panama, buyer or seller?
By law, the seller: the 2% transfer tax is paid by the transferor, and the seller's 10% tax on the gain is paid before the sale is registered. A contract can shift costs, which is why buyers' totals vary.
| Cost | Rate | Who pays | Set by |
|---|---|---|---|
| Transfer tax (ITBI) | 2% of the higher of price or updated cadastral value | Seller | Law (Law 106 of 1974, art. 1) |
| Tax on the gain | 10% of the gain, paid before registration | Seller | Law (Fiscal Code art. 701, Law 18 of 2006) |
Sources
Frequently Asked Questions
How much are closing costs for a buyer in Panama?
Does the buyer pay the agent in Panama?
Is there stamp duty in Panama?
Is the transfer tax charged on the price I pay?
Is there VAT on property in Panama?
Header photo: Dronepicr, CC BY 3.0, via Wikimedia Commons. All credits: image credits.