Panama Real Estate: Your Guide to Investing and Living in Panama

Panama has emerged as a compelling destination for real estate investment and relocation, attracting attention from around the globe. Often perceived as Latin America’s most developed economy, excluding Puerto Rico as a US territory, Panama’s success is largely driven by its robust services sector, accounting for 80% of its GDP. Key economic pillars include a prominent financial services industry, the strategically vital Panama Canal and related activities like the Colon Free Trade Zone, and mining. While the market is considered relatively mature with some upside already priced in, Panama continues to attract capital and high-end immigration, which is seen as beneficial for real estate investors, particularly in Panama City. The country offers unique advantages such as a dollarized economy, good healthcare, and connectivity through a major airport. Updated property tax policies are also making long-term ownership more appealing, potentially leading to predictable price trends across different market segments.

Top 10 FAQs About Panama Real Estate

Here are some frequently asked questions about buying and investing in real estate in Panama, based on the provided sources:

1. Can foreigners own property in Panama?
   Yes, any person, whether foreign or national, natural, or legal entity, can hold titled real estate title in the Republic of Panama. Titled property provides secure, government-recognized ownership with a unique registration number in the Public Registry.
2. What is the process for buying real estate in Panama?
   The process typically involves finding a property, hiring a local attorney to perform due diligence, paying taxes (specifically the Real Property Transfer Tax paid by the seller), signing the final purchase/sale contract before a local notary in a Public Deed, and finally registering the Public Deed in the Panama Public Registry to complete the transfer of ownership. Due diligence on the property is strongly recommended.
3. What are the types of property rights in Panama?
   Panama has two main property ownership categories: titled property and Rights of Possession (ROP). Titled property is similar to fee-simple ownership and offers high security and legal protection, allowing for mortgage loans and requiring annual property taxes and a sales tax upon sale. ROP properties are technically government-owned but can be legally possessed and used by individuals; they generally do not pay annual property taxes or have minimal sales tax, are typically less expensive, and can sometimes be converted to titled property.
4. What are the typical taxes associated with property ownership and transfer in Panama?
   Titled properties valued over $30,000 are subject to annual property taxes. When a property is sold, a Real Property Transfer Tax of 2% is assessed on the greater of the sale price or registered value plus improvements, plus 5% for each year of ownership, although the actual capital gains tax is 10% of the gain, and a refund can be requested if the 3% prepaid tax exceeds the actual capital gains tax. Property taxes are paid three times a year. ROP properties generally do not pay annual property taxes.
5. Can buying real estate help obtain residency in Panama?
   Yes, purchasing real estate can be a path to obtaining residency in Panama. Options include investing $200,000 in local real estate (or a combination with a fixed deposit) through the Friendly Nations Visa (leading to temporary residency for 2 years, then permanent residency), or investing $300,000 in real estate through the Qualified Investor Visa (leading to immediate permanent residency). The Self Economic Solvency Visa also allows permanent residency after 2 years with a $300,000 real estate investment.
6. What are the market trends for 2025 in Panama?
   Trends for 2025 include rising rents in central Panama City neighborhoods due to proximity to new business hubs and limited properties. David in Chiriquí is expected to attract attention as a more affordable alternative to Panama City, boosting its property values. Rental prices and yields in popular urban areas may rise due to a shortage of mid-range apartments and reduced new construction starts. Demand for properties near co-working spaces is increasing due to remote workers. Santiago’s economic growth is drawing young families, gradually boosting home values. Colón’s revitalization projects are expected to enhance its residential appeal and lead to a slow rise in prices. Demand for single-level homes is stabilizing values in accessible neighborhoods due to an aging population. Energy-efficient home systems will boost prices for units with green tech. Newer condo developments in prime areas are becoming more appealing and pricier due to demand for low-maintenance properties.
7. What are property prices like in Panama?
   Property values vary by location. In 2020, the average house price in David was US$784 per sq. m., while Panama City was US$1,501 per sq. m.. In 2023, average rents in Lynn Haven and Panama City North were around $1,495-$1,512. In 2025, a 1,700 sq ft apartment in Coronado was listed for $185,000, a 3-bedroom house in Boquete for $150,000, and ocean-view apartments in upscale Panama City areas start around $165,000, with rents from $900-$1,500+. The average price per square meter in good areas of Panama City hovers around $2,000.
8. Is investing in Panama real estate a good option?
   Investing in Panama offers diversification and potential residency options. It’s suitable for those seeking a Plan B, looking to relocate, wishing to diversify internationally, or interested in a strategically important economy for the long term. However, net rental yields in Panama City are generally lower than advertised, and quick capital gains are unlikely. It is not recommended for those prioritizing very high net rental yields or looking for quick profits.
9. What are some notable neighborhoods in Panama City for real estate?
   Recommended areas include San Francisco (classic, low-risk, easy to rent), Coco del Mar (more modern, high-end, easy to rent), Costa del Este (new economic center, modern, good for corporate expats), Casco Viejo (main tourist area, demand for rentals, colonial architecture appreciation), Santa Maria (large gated community, high rental demand from families), and El Cangrejo (walkable, pleasant vibe, quality tenants). Areas like Punta Pacifica are noted as past their prime, requiring a knowledgeable agent to find well-maintained buildings.
10. Is it mandatory to use a real estate agent in Panama?
    Using a real estate agent or broker is not mandatory in Panama. However, it is strongly recommended to hire local experts, including attorneys and potentially a realtor, to assist with due diligence, navigate the market, understand specific neighborhood dynamics, assess ROI, and potentially manage rentals.

Navigating Panama Real Estate with Expertise

When considering investments in Panama real estate, particularly in diverse areas like Panama City, navigating the market requires local knowledge and expertise. While our sources discuss the potential of various neighborhoods and the importance of due diligence, they highlight the value of working with knowledgeable local professionals.

The sources discuss the Punta Pacifica neighborhood as an area frequently shown to foreign buyers, noting that many buildings are older, though some are well-maintained and perform well as rentals. The sources advise that a knowledgeable realtor is essential to help navigate which specific buildings might be investable in such areas. One source introduces Matt as a realtor specializing in Panama City who can help investors with ROI calculations and property management.

A local expert specializing in Panama City real estate can help you:

• Perform thorough due diligence on potential properties, including verifying title and identifying any encumbrances.
• Navigate the nuances of different neighborhoods, understanding which areas are growing, which are established, and which might present risks.
• Assess the potential rental yields and capitalization rates for specific properties, providing realistic expectations for ROI.
• Assist with the legal and tax aspects of the transaction, working with local attorneys and notaries.
• Guide you through processes related to obtaining residency through real estate investment, if that is a goal.
• Potentially offer property management services if you plan to rent out your investment.

Working with experienced professionals is crucial to making informed decisions and ensuring a smooth transaction in the Panama real estate market.

Work with Punta Pacifica Realty:

Panama’s real estate market offers diverse opportunities supported by a stable economy, strategic location, and potential pathways to residency. Whether you are seeking a permanent home, a vacation property, or an investment for long-term growth and diversification, various regions and neighborhoods offer different appeals. While areas like Panama City provide urban excitement and business hubs, regions like Chiriquí offer a quieter lifestyle. Understanding property rights (Titled vs. ROP), navigating the legal process, and being aware of tax obligations are essential steps for any buyer. Although high rental yields may not be readily available everywhere, particularly in Panama City, the market remains attractive for those focused on long-term investment, diversification, and the lifestyle benefits Panama offers. Engaging with knowledgeable local real estate professionals and legal experts is highly recommended to successfully navigate the market and achieve your real estate goals in Panama.

Regions and Locations in Panama: Real Estate Opportunities