Panama Real Estate Taxes
Real estate taxes in Panama gives the seller a few options, but are generally subject to withholding on the sales amount by the buyers agent or attorney.
Real estate taxes in Panama can be divided into two separate categories; ongoing annual taxes and capital gain tax.
The annual tax is tiered, meaing that the tax is calcullated by adding the accumulated tax from the different brackers. The tax is generally 0 % for properties with a registered value of $30,000 or less. Otherwise the following table applies:
$30,000-$50,000: 1.75 %
$50,000-$75,000: 1.95 %
$75,000 and above: 2.1 %
For condo buildings with exemptions the individual unit owner still needs to pay a 1 % tax on the land value.
If the registered values have been updated by the owner then discounted brackets at a 50 % discount is used.
New construction in Panama is generally exempt for 20 years.
When you buy and sell properties in Panama there are some tax considerations:
The buyer generally has to withhold 5 % of the payment to the seller as a withholding tax for capital gains. This withheld tax has to be submitted within 10 days of the transfer. A buyer is liable for any unpaid tax.
The seller is subject to a flat 10 % capital gain tax on the sale.
A title transfer tax is charged at the amount of 2 % when the property os transfered in the public registery. The tax is applied to the highest of the registered value or the transaction value.