What about property taxes? (written by the Coronado Group – 2008)
* July 2010 - This was the information as of 2008, it should be verified with a lawyer before proceeding.
The actual tax code provides for a 20-year exemption on property tax for new constructions. After that period taxes are paid as follows:
• Properties with a registered value ranging from US$30,000.00 to US$50,000.00 must pay real estate tax at a rate of 1.75%
• Properties with a registered value ranging from US$50,000.00 to US$75,000.00 must pay real estate tax at a rate of 1.95%
• Properties with a registered value over US$75,000.00 must pay real estate tax at a rate of 2.10%
One quick note on Income Taxes. Panamanian banks do not report accrued interest to the IRS, they leave that up to you. If you decide to retire in Panama using their pensionado program, as a U.S. citizen living overseas, the IRS still requires you to file an annual federal income tax return, but some expatriates decide not to. All may be well for up to ten years, when they attempt to renew their U.S. passports, which requires providing their SSN. The IRS then checks to see if they are current on filing annual federal income tax returns and paying taxes due, if any. If the IRS finds that they aren’t current, the Department of State will not renew their passport until the IRS receives the returns and/or blood money.
Exoneration of Real Estate Tax in Panama - Written by Maria Cristina Lima - 2008
For all people interested in acquiring Real estate in the Republic of Panama, be informed that by means of the Law 34 of 9 November 2005 an exoneration of the Real Estate Tax for a period of 20 years for new constructions whose construction permits are dated before September 2006 was approved.
This tax exoneration applies for mentioned constructions only if they are finished, registered at the Public registry and with an occupation permit before 31 August 2007.
For Real Estate with construction permits approved on and after 1 September, 2006 the tax exemption will apply as follows:
1. For constructions and improvement of residential use:
1. Costs up to US $100,000.00 and up to US $250,000.00, 10 years of exoneration.
2. Costs of more than US $250,000.00, 5 years of exoneration.
2. Other improvements: (buildings for the development of industrial, commercial and agro-industrial activities, among others).
1. Any value, 10 years of exoneration.
2. We recommend you to always ask for a copy of the construction permit when you are buying Real Estate in Panama