Countries › Panama › Guide › 11. Real estate and land › Buying and owning property in Panama: equal rights for foreigners, public deed and registration, and who pays which closing cost

Buying and owning property in Panama: equal rights for foreigners, public deed and registration, and who pays which closing cost

Argentina. For full detail on Argentina, go to The Argentine Thread.

Last verified: 2026-10-29 · Status: Stable

Foreigners may own real estate in Panama on the same terms as Panamanians, except land within ten kilometres of the borders and island land, which is restricted by the Constitution. Ownership passes through a public deed signed before a notary and recorded in the Registro Público, and an unregistered deed does not bind third parties. On a typical resale the seller pays the 2 percent transfer tax and an income tax advance of 3 percent, and the registry charges B/.10 plus B/.3 per B/.1,000 of value.

Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates as legal tender; the Superintendencia de Bancos states that the balboa's value is on a par with the US dollar (checked 29 October 2026). USD figures therefore equal the balboa figures.

Key facts

Border zone where foreigners and foreign owned companies may not acquire land	10 kmConstitución Política art. 291, as of 2026-10-29 · in force
Real estate transfer tax (general)	2 %Ley 106 de 1974 art. 1, as of 2026-10-29 · in force
Income tax advance on a non business real estate sale	3 %Código Fiscal art. 701 literal a, as of 2026-10-29 · in force
Registro Público registration fee on a transfer, per B/.1,000 of value	3 PABRegistro Público tariff schedule (Ley 3 de 1999 art. 7 numeral 4), as of 2026-10-29 · in force
Exchange rate used for USD conversions	1 PAB per USDBalboa at par with the US dollar (Superintendencia de Bancos), as of 2026-10-29 · in force

The rule

1. Panamanians and foreigners are equal before the law, although the law may subject foreigners to special conditions or deny them certain activities for reasons of work, health, morality, public security and the national economy. Private property acquired under the law by natural or legal persons is guaranteed.Constitución Política (texto único 2004), arts. 20 and 47, 2004-11-15 official text · verified 2026-10-29

2. Foreign individuals and companies, and Panamanian companies with any foreign capital, may not acquire land located less than ten kilometres from the borders; island territory may be sold only for specific development purposes and under constitutional conditions.Constitución Política (texto único 2004), art. 291, 2004-11-15 official text · verified 2026-10-29

3. Acts and contracts that create, transfer, modify or extinguish real rights over immovable property must be made in a public instrument (escritura pública).Código Civil art. 1131 numeral 1 as worded by Ley 43 de 1925 art. 1, art. 1131, 1925-03-13 official text · verified 2026-10-29

4. The Registro Público serves as the means of constituting and transferring ownership of real estate and other real rights over it; only titles in a public deed, a final judgment or another authentic document defined by law can be registered, and titles subject to registration that are not registered do not prejudice third parties until they are presented to the registry.Código Civil, arts. 1753, 1756 and 1761, 1916-08-22 official text · verified 2026-10-29

5. Transfers of real estate for value (sale, exchange, payment in kind or any other agreement transferring ownership) bear a 2 percent transfer tax on the transfer value, with the current cadastral value as a minimum base; the transferor pays it, and the notary may not authorise the deed without the payment receipt details.
Cost to do it: 2 percent of the higher of price and cadastral value, paid by the seller.
Example: A resale at B/.300,000 with a cadastral value of B/.200,000: B/.6,000 of transfer tax. / US$300,000 sale, US$6,000 transfer tax.Ley 106 de 1974, art. 1, 1974-12-30 official text · verified 2026-10-29

6. If the sale is outside the seller's ordinary business, income tax is 10 percent of the gain; the seller pays 3 percent of the higher of sale value and cadastral value as an advance (or may file a sworn return liquidating the gain), and may treat the 3 percent as the final tax. The receipts for income tax and for the 2 percent transfer tax must appear in the deed for it to be registered.
Cost to do it: 3 percent advance of the higher of price and cadastral value, paid by the seller before registration.
Example: A B/.300,000 resale: B/.9,000 advance. / US$300,000 resale, US$9,000 advance.Código Fiscal art. 701 literal a as worded by Ley 208 de 2021 art. 7, art. 701 literal a, 2021-04-06 official text · verified 2026-10-29

7. The DGI asks the seller, who must be registered as a taxpayer, to file form 106 (real estate transfer) and form 107 (capital gain) for every sale; payment can be made at DGI cashiers, collecting banks or online once the forms are approved.Dirección General de Ingresos, real estate frequently asked questions, questions 3, 4 and 7, 2026-10-29 official text · verified 2026-10-29

8. Notaries must require the deed to split the transfer value between land and improvements, and the Registro Público will not register a transfer deed that does not detail those values where applicable, including units in horizontal property.Ley 66 de 2017, arts. 16 and 17, 2017-10-17 official text · verified 2026-10-29

9. The Registro Público charges, for the constitution or transfer of ownership of real estate, a qualification fee of B/.10 per property (finca) and a registration fee of B/.3 per B/.1,000 of value or fraction; a mortgage over real estate is charged the same B/.10 plus B/.3 per B/.1,000. The registry board fixes these fees under its founding law.
Cost to do it: B/.10 per property plus B/.3 per B/.1,000 of value.
Example: A B/.300,000 transfer: B/.10 plus B/.900, total B/.910; a B/.240,000 mortgage adds B/.730. / US$300,000 transfer, US$910 registry fees; US$240,000 mortgage, US$730.Ley 3 de 1999 art. 7 numeral 4; Registro Público tariff schedule, art. 7 numeral 4, 1999-01-06 official text · verified 2026-10-29

Item	Payer	Basis	Amount (B/. = US$)
Transfer tax	Seller	2 percent of higher of price and cadastral value	6,000
Income tax advance	Seller	3 percent of higher of price and cadastral value	9,000
Registry, transfer	As agreed (usually buyer)	B/.10 plus B/.3 per B/.1,000	910
Registry, mortgage	As agreed (usually buyer)	B/.10 plus B/.3 per B/.1,000	730

Who pays what on a B/.300,000 resale by a non business seller, financed with a B/.240,000 mortgage (Ley 106 de 1974 art. 1, Código Fiscal art. 701 literal a, Registro Público tariff).

Worked example

A buyer acquires an apartment resale for B/.300,000 (US$300,000) from an individual who does not trade in property; the cadastral value is B/.200,000.
The seller pays B/.6,000 of transfer tax (2 percent of the price) and a B/.9,000 income tax advance (3 percent), both before the deed is registered.
The buyer pays the Registro Público B/.910 (B/.10 plus B/.3 per B/.1,000) and, if financed with a B/.240,000 mortgage, another B/.730, plus notary and legal fees agreed privately.

Step by step

Check the property in the Registro Público (owner, liens, marginal notes) and its cadastral value and tax status before signing anything.
Sign a promise of sale if needed (the registry charges B/.10 to record one) and agree who bears which costs; the transfer tax falls on the seller by law.
Have the seller file DGI forms 106 and 107 and pay the transfer tax and the income tax advance.
Sign the public deed before a notary with the land and improvement values split out, then present it to the Registro Público.
After registration, update the property tax account with the DGI and, for a home, apply for the primary residence or family patrimony exemption.

Common traps

Until the deed is presented to the registry, a later buyer or creditor who registers first can prevail; register promptly.
Land within ten kilometres of a border cannot be bought by a company with any foreign capital, even if it is Panamanian.
Both the transfer tax and the 3 percent advance use the higher of price and cadastral value, so an artificially low price does not lower the tax.
A deed that does not split land and improvement values will be rejected by the registry.
Panama has no tax treaty with Argentina (DGI treaty list), so an Argentine resident buyer or seller should check the Argentine side of the deal in The Argentine Thread guide.

Sources

← Consumer credit in Panama: finance company licences, effective rate disclosure, no interest on interest and the seven year credit bureau ruleForeign ownership of land in Panama: open market, the ten kilometre border ban, island land and the ban on foreign governments →

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