New Tax Exemption Laws in Panama
(articleonlinedirectory.com) Buying or building new properties in Panama has an added bonus! People looking at purchasing real estate in Panama have been given a respite from paying annual taxes on their new properties for an additional two years. This new law came about on the fifteenth of April, and lets people take advantage of tax exoneration for a period of twenty years.
In the end of August of last year, the property tax exemption law that was in place ended, and left many builders and construction companies in a bit of a pickle. Companies that were developing new residential homes and commercial properties were no longer able to offer prospective buyers discounts, which led to a decrease in the number of people investing in new properties. Many individuals decided to buy older properties instead, as this worked out a little bit cheaper for them.
The new tax exemption law is good news for many companies and people who are building real estate. There are however several restrictions in order to get the tax exemption, and people will need to act quickly. The time frame is only a small window, and people will need to get their building permits in by July 2009, and their occupancy permit in by the end of 2011. The exoneration will start whenever the occupancy permit is issued or when property improvements are registered at the Public Registry. This process generally takes about a week, so you will need to ensure that you get the papers in within your time frame.
If for any reason, you do not manage to get your occupancy permit and your building permit filed by the allotted time frame, then your property will have different tax exemptions. Properties that are for residential purposes and are valued up to $100,000 will receive a fifteen year tax exemption. Properties up to $250,000 will receive a ten year property tax exemption, and any buildings that are valued at over $250,000 will receive a five year tax exemption. This includes the building or renovation of apartments, houses, and condominiums that are intended to live in.
If you are planning on building a home in Panama, you will want to take advantage of the twenty year tax exoneration quickly. It is not an automatic process, and you will need to apply for an exemption very soon. If you apply within the next eight to ten months, you will have a good chance of getting a tax exemption on your property, which will save you a lot of money. If you are purchasing a new apartment for a building company, you will not need to worry about it, as the company will have applied for the exemption directly. If however you plan on constructing your own home, you will need to get the ball rolling as soon as you can. Things can take longer than you anticipate in Panama, especially with the current real estate boom going on in the country. You can get a tax exemption form from the DGI office, and you can apply when you have your necessary permits and public deeds.
