Taxes when selling property in Panama

Transfer tax (2%)

2% is paid on the higher of the sale price and the property's updated cadastral value. The seller usually pays it, and it must be paid before the deed is registered.

Capital gains

The gain (sale price minus purchase cost and documented improvements) pays 10% income tax.

At the sale, 3% of the higher of the sale price and the cadastral value is paid in advance. That 3% can be taken as the final payment; if it exceeds 10% of the actual gain, the seller can claim the difference with the tax authority (DGI).

Annual property tax

While you own it you pay annual property tax. A registered primary residence is exempt on the first value bracket and pays progressive rates above it; other properties pay progressive rates on their cadastral value.

You need a property-tax clearance letter to sell.

Before listing

• Gather your purchase deed and receipts for improvements: they reduce the taxable gain.
• Request the Public Registry certificate to spot liens early.
• If there is a mortgage, ask the bank for the payoff letter to release it at closing.