How property tax works
It is an annual tax on the registered value of the land and improvements. The Dirección General de Ingresos administers it and it is paid in three instalments (April, August and December), or in one payment with a 10% discount if settled before the last business day of February. It is progressive: each bracket pays its own rate, not the total value.
Current tables (Law 66 of 2017)
| Primary residence | Rate |
|---|---|
| Up to 120,000 USD | 0% |
| 120,000.01 to 700,000 USD | 0.5% |
| Above 700,000 USD | 0.7% |
| Other property | Rate |
|---|---|
| Up to 30,000 USD | 0% |
| 30,000.01 to 250,000 USD | 0.6% |
| 250,000.01 to 500,000 USD | 0.8% |
| Above 500,000 USD | 1% |
Example
A primary residence worth 250,000 USD pays 0% on the first 120,000 USD and 0.5% on the remaining 130,000 USD: 650 USD a year. The same property as a second home pays 0% up to 30,000 USD and 0.6% on 220,000 USD: 1,320 USD a year.
Frequently asked questions
Does a foreigner pay the same property tax?
Yes. The tax depends on the property and its use, not on the owner’s nationality. A foreigner can register their primary residence in Panama as Patrimonio Familiar Tributario if they live in it.
Is new construction exempt?
New improvements can obtain a temporary exemption on the construction value, with terms that depend on the value and the date of the occupancy permit. The land keeps paying.
What happens if it is not paid?
Surcharges and interest accrue, and the DGI can block registration of a sale at the Public Registry until the debt is settled (tax clearance certificate).
Related articles
- Buying property in Panama as a foreigner
- Best real estate lawyers in Panama
- Best residential projects for foreign investors
Sources
- Law 66 of 17 October 2017, amending the property tax (Official Gazette 28388-A)
- Dirección General de Ingresos (DGI)