Buying pre-construction in Panama: who pays what
A foreign buyer can purchase in their own name, with no residency and no local partner. What differs from home is not the right to buy: it is the payment schedule and who bears each tax.
Yes, a foreigner buys on the same terms as a Panamanian
Panama's constitution does not restrict real property ownership by nationality, except in border strips and certain islands. In Panama City a foreigner buys in their own name or through a company, with the same registration rights at the Public Registry.
No residency, national ID or local partner is required. A passport is, and the bank and the attorney will request due diligence documentation on your identity and the source of funds, under Law 23 of April 27, 2015.
How a pre-construction purchase is paid
A pre-construction purchase is not paid in one go. The usual structure in Panama has three moments: a reservation on signing, a down payment spread across installments during construction, and the balance at delivery, which is when financing enters if there is any.
The amounts and the number of installments are set by each developer and vary by project. It is the first question worth asking, because it determines how much capital you tie up before you get keys. Ask for the payment plan in writing and compare it across projects: two towers at the same price can demand very different cash flow.
The transfer tax is the seller's, not yours
The Real Estate Transfer Tax (ITBI) is 2% and is legally the seller's obligation. In a pre-construction purchase the seller is the developer.
Law 546 of August 31, 2026, in force since September 1, 2026, restored the ITBI exemption on the first B/.120,000 of the taxable base in the first sale of new housing, with no cap on the value of the home. On a transaction above B/.200,000 the saving is fixed: the tax that would have fallen on that first B/.120,000.
The same law declares void by operation of law any clause that shifts payment or reimbursement of the ITBI onto you. If it appears in a purchase contract it is not a negotiating point: it is void. That clause is worth reading before you sign.
The annual tax depends on what the property is for
Panama distinguishes between a primary residence and everything else, and the difference matters if you are buying to rent.
As Tributary Family Patrimony or Primary Residence, the first B/.120,000 is exempt; from there to B/.700,000 the rate is 0.5% a year, and 0.7% above that.
As an investment property or second home, the exempt band drops to B/.30,000 and the rates rise: 0.6% up to B/.250,000, 0.8% up to B/.500,000 and 1% above. On a B/.300,000 apartment held for rent, that is roughly B/.2,000 a year coming out of the return before any other cost.
Closing
The purchase is formalized by public deed before a notary and recorded at the Public Registry. It is worth having your own attorney, separate from the developer's, and budgeting their fees on top of the price.
If you are financing with a Panamanian bank, that process runs in parallel and takes time: account opened, approval letter, appraisal. Opening an account as a non-resident takes weeks rather than days, and is worth starting well before delivery.
Frequently asked questions
Can a foreigner buy an apartment in Panama?
Yes. No residency, national ID or local partner is required. You buy in your own name or through a company and register at the Public Registry with the same rights. Restrictions exist in border strips and certain islands, not in Panama City.
Who pays the 2% transfer tax?
The seller. In a pre-construction purchase, the developer. Law 546 of 2026 declares void any clause shifting that payment onto the buyer.
How much property tax applies if the apartment is for rent?
As it is not a primary residence, the exempt band is B/.30,000 and the rates are 0.6% up to B/.250,000, 0.8% up to B/.500,000 and 1% above, on the registered value.
How much is payable before delivery?
It depends on the developer. The usual structure is a reservation, installments during construction and the balance at delivery. Ask for the payment plan in writing and compare across projects: the same price can hide very different cash demands.
Sources
- Law 546 of August 31, 2026, Official Gazette 30601-B, amending article 4 of Law 106 of 1974.
- Law 66 of October 17, 2017, on real property tax.
- Law 23 of April 27, 2015, anti-money laundering.
This guide is informational and is not legal, tax or investment advice. The laws and rates cited can change. Confirm with an attorney licensed in the Republic of Panama before making a decision.
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