Mega Savings in Panama Property

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Read more about Panama in International Living Postcards—your daily escape
 

(internationalliving.com) The scuttlebutt has been flying fast and thick about property tax reform in Panama.
 

One of the things that makes Panama so attractive to expats is a hefty real estate tax exemption…or it was, until it was allowed to expire last year.
 

Would it be allowed to die, or would it be resuscitated by the Panamanian government? The answer would say a lot about how the powers that be in Panama feel about foreign retirees and property owners.
 

I asked Jessica Ramesch, our resident Panama expert and editor of our Panama Insider service, to track the situation. She’s come back with good news, and I want to share it with you:
 

“I mentioned in the January 2008 issue of Panama Insider the rumor that Panama’s government was discussing the return of the 20-year tax exemption. Guess what…the rumor was true. It’s back!
 

“Bottom line: If the construction permit is approved before July 1, 2009, and your new residential property is completed and duly registered by Dec. 31, 2011, you won’t pay property tax for 20 years from the date of completion. Talk about mega savings.
 

“Again, this exemption isn’t new…so even if you buy a resale in Panama, you’re likely to get a tax exemption. That’s because if you buy a resale, any remaining exemption time is transferred to you. For example, if you buy an exempted property that was built in 2005, you won’t pay property tax on it till 2025—that is, you get a 17-year tax exemption.
 

“Keep in mind that land itself is not exempted and will continue to incur property taxes if its value is more than $30,000.”

Good news on several counts. Not only does it mean real savings for anyone buying and building in Panama, but it also shows that Panama realizes the importance of continuing to encourage foreign investment by retirees and relocators with tax incentives.