Property in Panama
View Property in Casco Viejo
View Beach Front Land in the Caribbean
Why Panama you ask? Well…… because it’s fabulous, exciting, friendly, sophisticated, fun and truly affordable; not only the cost of real estate, but the overall cost of living, which you probably don’t know!! Through my personal experience of visiting, then buying a condo in Panama, I am well versed in the ways of that delightful country. The country offers mountains to the west, beaches to the north on the Caribbean and on the Pacific to the south, and history in my favorite area in Panama City, Casco Viejo, a peninsula at one end of the new City near the entrance to the Panama Canal. My thought is that anyone contemplating visiting or buying could benefit from a conversation with me as I did with a fellow American living down there before I ventured south. To that end, I’d be happy to chat with you, and hope that the updated information and sample listings on this site will be helpful. My email is lois.nelson@comcast.net and the telephone number is (603)775-7721.
Casco Viejo - Panama City, Panama
Otherwise known as San Felipe, this UNESCO World Heritage Site with charming narrow brick streets, buildings in the Spanish and French architectural style reminiscent of the French Quarter in New Orleans and many cultural attractions offers very inviting incentives to investors in this small corner of Panama City, Panama. Most of the houses date back to 1673, and the renovation of these buildings is carefully overseen by the committee to preserve its glorious heritage, allowing no changes to the exterior – merely renovation to it’s original look. Not so in the interior, though, where you’ll final all today’s amenities. Those condos lucky enough to have views can enjoy the city skyline in one direction, and the hills and bridge of the Americas in the other with a line of ships awaiting transit through the canal in full view. This is truly an amazing area, surely to be the most exclusive and expensive area in Panama, if we are to believe the predictions of the man on the street!
There is so much more to the country of Panama than just Casco Viejo, however, and there is no better way to explore and learn about these areas than to visit the web site of the highly recommended tour operator, Rene Guardiola at www.yourmaninpanama.com . He speaks perfect English and is exceptionally helplful in many ways.
FREQUENTLY ASKED QUESTIONS
HOW SAFE IS IT FOR FOREIGNERS TO BUY PROPERTY IN PANAMA? Because of the many laws specifically targeting foreign investment and the protection of the Constitution of the Republic of Panama, property is being purchased every day without a problem. IS IT LEGAL? Yes. One may own titled property in one’s own name or through a Panamanian corporation. The latter is the recommended method; however, some of the tax advantages locally are negated by the special incentives passed for development in Casco Viejo. One should always consult a local attorney for both advice and, if recommended, formation of a corporation. Do not hesitate to click on this link to Ewaldo Pitti, a well known, highly recommended attorney in Panama City, to ask specific questions: epitti@rpglawyers.com WHAT ARE THE TAXES AND/OR FEES FOR TRANSFERRING PROPERTY? The Government charges a 2% property title transfer tax which is based on the registered value. This is normally paid by the seller, but sometimes the seller negotiates in the contract for the buyer to pay. There can be other Notary and Public Registry fees in the neighborhood of $200-300 for registering the contract of sale. Everything is negotiable, but it is recommended that you have your own legal representation. The attorney will tell you in detail what it will cost you, but I have been told the average attorney’s fee for the total package is $1,200.00 You will not receive a HUD statement as in this country, nor will there be a typical “sit around a table signing papers” closing. WHAT IS THE GENERAL PROCEDURE FOR SEARCHING FOR AND BUYING REAL ESTATE? It is best to contact a local realtor. Our office keeps a list of reputable local realtors, all with special skills, and all English speaking, to make your search easier. When you do find a property you wish to buy, the agent will negotiate verbally with the seller. When there is a meeting of the mind, you will be asked to make a deposit (negotiable, but usually between 5% and 50%), which is given directly to the Seller. (I understand that, although the term “escrow” is new to the Panamanians, they realize that it is standard procedure internationally, and because so many foreigners are now investing, many are adopting this route.) There is a law that if the Seller fails to perform, he is required to refund twice your deposit. One word, though about the process - it is frustratingly slow, and you can’t bully your way to speed. It took me three months, and I was paying cash. However, I was trying to complete the process from the States. If I had been down there, perhaps the process would have gone faster, but I am skeptical. You will be told 6 weeks, but I have yet to see that! ARE CONTRACTS OF SALE WRITTEN IN ENGLISH, OR MUST THEY BE IN SPANISH TO BE LEGAL? No, but if it is written in English and there is a legal problem, the court will require it to be translated into Spanish. In my particular experience, the contract was written in both Spanish and English. AS A U.S. CITIZEN, CAN I USE MY IRA OR 401K MONEY TO INVEST IN PANAMANIAN PROPERTY? I have been told that the answer is “yes” and that there are financial companies in the U.S. (such as www.pensco.com )who deal with self-directed retirement accounts through which you can invest worldwide. WOULD OWNER FINANCING OR LEASING WITH OPTION TO BUY BE AVAILABLE IN PANAMA? Yes, leasing with an option to buy is common in Panama, but now most sellers prefer an outright purchase. However, such a lease to purchase must be registered with the Ministry of Housing to make it legal. IF I BUY BEACH FRONT PROPERTY, DOES THE PUBLIC HAVE ACCESS TO THE BEACH? The law says that unless there is access within 1000 meters of your property, you must allow access. IS IT LEGAL TO ‘FLIP’ PROPERTY IN PANAMA? Yes, your only liability is to pay the 30% Panamanian capital gains tax (which you would avoid if you took title through the corporation you formed). WHAT ARE THE REAL ESTATE TAXES IN PANAMA? This is a complicated question, and you would be wise to consult an attorney, but I can attest to the fact that in Casco Viejo, because of the governmental incentives to renovate, the buyer is exempt from any property tax for 30 years from the date the renovation is complete. I understand this law lapses after August of 2007. There is more information on this subject online. You might try www.escapeartist.com. IF I WERE TO DIE OWNING PROPERTY IN PANAMA, WOULD I OWE INHERITANCE TAXES IN THAT COUNTRY? Yes, but again if your corporation owned the property and was set up properly, I understand there would be no taxes or probate on the real estate. This is a good question for thorough explanation by an attorney. IS FINANCING AVAILABLE IN PANAMA? Generally, yes. There are approximately 82+ international banks in Panama, and many offer financing to foreigners. They have their requirements, such as: the property must be titled, located in approved regions, appraise at or above purchase price and have a structure on the land, (cannot be land only). The bank will generally only finance 50-70% of the contract price. You will be asked for documentation, some of which originates in the your home town.
These are just some of the many questions we have been asked; perhaps you have more. Feel free to call or email us, otherwise HAPPY INVESTING!!
