Twenty year tax exemption renewed in Panama

(www.propertywire.com)  The 20 year tax exemption for buyers in Panama which expired last year has been restored to keep the country's booming real estate market on the rise.

There was concern that failure to renew the exemption for foreign buyers would have scuppered the sale of condos that are scheduled for construction but not yet been started.

'We can confirm that the Panama government has restored the 20 year property tax exemption on all new construction with building permits issued before December 31st, 2009,' said a spokesman for law firm Panama Legal.

'It is good news for the already booming real estate market. Had it not been renewed then newer buildings would have been at a disadvantage,' he added.

Jessica Ramesch, of International Living, said it will also benefit those looking to invest in re-sales. '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 so you get a 17-year tax exemption,' she explained.

However she pointed out that land itself is not exempted and will continue to incur property taxes if its value is above $30,000.

'It is good news. 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 with tax incentives,' she added.

Other changes are being considered that will affect buyers who want to spend time at their property in Panama and will need a visa. Higher fees for residency visas are expected in August. Some types of visa also require a minimum amount of investment.