Panama Property Taxes and Buying Costs Explained

One-off costs when you buy

The headline taxes legally fall on the seller: a 2% real-estate transfer tax plus a 3% advance payment of income tax, both charged on the higher of the sale price and the cadastral value, according to PwC's Panama tax summaries (last reviewed 18 January 2026). Contracts sometimes shift costs around, so make sure yours states clearly who pays what.

As the buyer, expect to pay your own lawyer — commonly around 2% of the price — plus notary fees of roughly 0.1% and small Public Registry charges, based on Global Property Guide estimates. Agent commissions of about 3–5% are customarily the seller's cost.

New builds are taxed differently

First sales of newly built homes benefit from reduced transfer-tax rates when the developer's main business is selling new construction, PwC notes: 0.5% up to 35,000 dollars, 1.5% from 35,000 to 80,000 dollars and 2.5% above that, with 4.5% for new commercial buildings.

Better still, PwC's summary states that the standard 2% transfer tax does not apply at all if a new home changes hands within two years of its occupancy permit being issued. If you are buying off-plan or nearly new, ask the developer exactly which regime applies to your purchase.

Annual property tax: the primary-residence exoneration

Panama's annual property tax (impuesto de inmuebles) is progressive, and the key relief is the primary-residence regime known as Patrimonio Familiar Tributario or Vivienda Principal. Register your home under it and, per the DGI (Panama's Directorate General of Revenue), the first 120,000 dollars of combined land-and-improvements value is taxed at 0%.

Above the exempt band, a registered primary residence pays 0.5% on value from 120,001 to 700,000 dollars and 0.7% on anything above that. A 300,000-dollar family home therefore pays 900 dollars a year — 0.5% on the 180,000 dollars above the threshold.

• Primary residence: 0% up to $120,000, then 0.5% to $700,000 and 0.7% above.
• Registration is made with the DGI, which must respond within three months of your application.
• Check first that the cadastral value held by the land authority ANATI is up to date — the tax is calculated on it.

Second homes and investment property

Property that is not your registered primary residence sits on a separate progressive scale with a much lower exempt band: the DGI lists properties under 30,000 dollars as exempt, and PwC puts the overall range at 0% up to a top rate of about 1%, depending on value and use. In short, a holiday flat carries more annual tax than the same flat registered as a primary residence.

Some newer buildings also still carry time-limited exonerations on the value of improvements granted under earlier rules, which can pass to the buyer. Ask the DGI, or have your lawyer confirm, exactly what a property's current tax status is — exoneration rules have changed several times, so verify before you rely on them.

A budgeting rule of thumb

For a resale purchase, buyers should set aside roughly 2–2.5% of the price on top for legal, notary and registry costs, while sellers part with around 7–10% once transfer tax, the income-tax advance and agent commission are counted — consistent with the Global Property Guide's estimate of 7.1–9.1% in total round-trip transaction costs.

Tax rules can and do change, so confirm current rates with the DGI before completion. You can also browse Habio's Panama buyer guides and listings to get a feel for asking prices in the areas you are considering.