Panama property tax for foreigners: on the way in, every year, on the rent, on the way out.

What taxes do you pay when buying property in Panama?

The main one is the real estate transfer tax (ITBI) at 2%. By law the transferor, the seller, pays it, though contracts can allocate it differently. A first sale of new housing falls under a separate regime with reduced rates instead. VAT (ITBMS) is not charged on the transfer of real estate.

PwC gives the new-housing rates as 0.5% to 4.5%, depending on property type and value. ITBMS is 7% in general, but it is a tax on goods and services; real estate transfers fall under the transfer tax or the new-housing regime. Global Property Guide lists the transfer tax as a buyer's cost, while the tax authority and Panamanian practitioners treat the seller as the taxpayer, so read who pays it in your contract. All one-off costs: Panama property buying costs.

What is the annual property tax in Panama?

Property tax (impuesto de inmueble) runs on the cadastral value on a progressive scale: 0% up to B/.30,000, 0.60% from B/.30,001 to B/.250,000, 0.80% from B/.250,001 to B/.500,000, and 1.00% above B/.500,000. This is the standard scale published by the tax authority (DGI), as of September 2026.

The tax applies to land and buildings whether or not they have a title registered in the Registro Público. These rates were introduced by Law 66 of 2017 and apply from 1 January 2019, according to Kraemer & Kraemer.

Is there a lower property tax for a primary residence in Panama?

Yes. A property registered under the primary residence regime (Patrimonio Familiar Tributario or Vivienda Principal) pays 0% up to B/.120,000, 0.50% from B/.120,001 to B/.700,000, and 0.70% above B/.700,000. A property with a taxable base of B/.120,000 or less registered in the regime is exempt.

The tax authority must rule on an application within three months. Patrimonio Familiar Tributario is for family units; Vivienda Principal is for one or more people living in the property as their permanent residence, according to Kraemer & Kraemer. A buy-to-let does not fit either description, so budget on the standard scale.

How are new condos taxed in Panama?

Some new condos carry an improvements exemption. A condo under horizontal property (PH) with an improvements exemption pays 1% a year on the land value only, and the exemption covers the declared improvements, according to the tax authority (DGI). The length of the exemption depends on the value and the permit date.

For new residential construction with permits from 2012 to 31 December 2018, Kraemer & Kraemer gives these terms:

Newer buildings may carry different terms. Ask for the exemption's end date before you buy: the tax bill changes when it ends.

When is property tax due in Panama?

In three instalments, due 30 April, 31 August and 31 December. Paying the full year before 30 April earns a 10% discount if the account has no arrears, under Law 208 of 6 April 2021. The tax authority (DGI) identifies the property by its finca number from the Registro Público.

Panama has no net wealth tax and no inheritance, estate or gift tax, according to PwC. The overview for buyers: buying property in Panama as a foreigner.

How is rental income taxed for a non-resident owner in Panama?

Panama taxes on a territorial basis, so rent from Panamanian property is Panama-source income and taxable for non-residents. PwC gives the 2026 individual rates: 0% up to B/.11,000, 15% from B/.11,000 to B/.50,000, and B/.5,850 plus 25% above B/.50,000.

Deductible against gross rent, according to Global Property Guide: municipal and national taxes, maintenance and repairs, administration costs and depreciation.

How the tax is collected from a non-resident landlord is not settled in the sources for this page. PwC says tax on income paid to a non-resident must be withheld by the payer, without giving a rent-specific rate, and commercial guides describe the mechanism in different ways. Confirm it with a Panamanian tax adviser before the first rent is paid.

What is capital gains tax on Panama property?

10% of the gain on a sale outside the seller's ordinary business, under Código Fiscal Art. 701(a), according to PwC. At transfer the seller pays an advance of 3% of the higher of the sale price or cadastral value, and can treat it as final or file for 10% of the actual gain and claim any excess back.

The declaration (Form 107) and payment must be made in the same calendar month and before the sale is registered at the Registro Público, per the tax authority (DGI). Step by step: selling property in Panama as a foreigner.

Header photo: Dr. Thomas Liptak, CC BY-SA 4.0, via Wikimedia Commons. All credits: image credits.