In Panama, there are a number of legal and tax considerations that must be taken into account by people wishing to buy or sell real estate. This includes aspects such as current legislation on ownership and transfer of land, as well as taxes payable for the acquisition or sale of a property. It is important that real estate investors adequately inform themselves about these laws and regulations before making any decision in the Panamanian real estate market. Furthermore, it is advisable to obtain legal and accounting advice to ensure a transparent and smooth process in all property-related transactions in this country.
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Rules and legal provisions in the real estate sector in Panama.
In 2022, Law 284 was implemented in Panama as an update to the horizontal property regime. This law sought to offer more flexibility in property management and simplify administrative and legal processes related to this type of property.
Before beginning any construction, developers must complete a process that includes obtaining specific permits and approvals. This process may include fire inspections and obtaining permits from the municipality, both of which may have varying costs depending on the project in question.
Law 8 of 2010 aims to regulate financial leasing contracts regarding real estate, in order to provide transparency and protection to the people who are involved in said contracts.
Advantages for people moving to another country or region.
In Panama, there are attractive incentives for those companies that are dedicated to tourism, such as the possibility of receiving special benefits and being able to develop properties related to this industry.
Immigration policies in Panama are flexible, since there are more than 15 types of visas and programs to obtain permanent residence. This allows foreigners to easily settle in the country.
Protecting real estate investment
The security of property investments in Panama is guaranteed for foreigners and citizens of the country. The rights are the same for both parties and all property titles are registered in the Public Registry, which ensures transparency and legality in transactions.
The necessary criteria to obtain residency in Panama include a letter of application, an application form, proof of financial solvency, and a certificate of good conduct. Additionally, a copy of the valid passport and a recent photograph must be presented. You must also meet certain specific requirements depending on the residency category to which you are applying, such as investments in the country or having Panamanian relatives.
In order to obtain permanent residency in Panama, investors from other countries must make a minimum investment of $300,000 USD in a property within the country.
Effects in legal and tax terms.
When someone acquires a property, they are charged a tax called "Property Transfer Tax", which is equivalent to 2% of the registered value of the property.
When a property is sold, the seller must pay a tax that is equivalent to 3% of the capital obtained as profit.
Regarding real estate tax, there are different rates that apply depending on the value of the property. Additionally, recently built residential properties are exempt from paying this type of tax for a period of 20 years.
In Panama, the purchase, sale and rental of properties are regulated by laws and regulations that seek to modernize and simplify these processes, providing protection and security to both buyers and sellers. Foreigners receive benefits and facilities to obtain residency, and real estate investments are considered safe thanks to the existing legal framework in the country. It is essential to have knowledge of these legal and tax aspects to make a successful investment in the Panama real estate market.
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