Interested in Panama real estate? It’s essential to understand the rules before making any investments. As a renowned tropical paradise, Panama attracts investors from around the world eager to acquire property here.
Whether you’re looking to build a home, invest in reforestation, or develop a beachfront resort, it’s crucial to be familiar with property regulations in Panama. This includes understanding registered values, limitations, taxes, blueprints, and other key considerations.
There are two main ways to own property in Panama: purchasing titled land or acquiring “Right of Possession” land. The latter applies to specific areas with historical protections, such as Portobelo in the Colon Province.
### Steps to Purchase Titled Property in Panama:
1. **Due Diligence**:
Conduct a thorough title search, verify tax status, check utility payments, and assess any restrictions or impediments on the property. Hiring a professional land surveyor is recommended to inspect the land and verify boundaries and measurements with official blueprints. This helps prevent future land disputes.
2. **”Promise to Purchase” Agreement**:
This agreement secures the property with a down payment (typically 10-20% of the total price). Both buyer and seller agree on the terms, price, and penalties for breaching the contract. It is registered in Panama’s Public Registry to prevent third-party purchases during the transaction process. The Public Registry is also where Panama real estate listings can be found.
3. **”Purchase and Sale” Agreement**:
After all payments are completed, the final contract is prepared. At this stage, the seller is responsible for processing the Capital Gains Tax and Property Transfer Tax, ensuring the property’s good standing. The buyer is responsible for paying for registration and notary services. Be sure to include an indemnification clause in the contract to protect against any property defects.
4. **Property Ownership**:
Once the public deed is registered and the title is transferred, you officially become the owner of the property.
To safeguard your investment, it’s advisable to obtain title insurance, which is commonly used in the U.S. and widely accepted in Panama. Panama’s laws are investor-friendly, encouraging foreign investments in the country’s real estate market.
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