Real Estate Sale Transfer Tax
The seller must pay the sales transfer tax before completing the sales transaction.
A 2% real estate sales transfer tax is imposed on the transfer of real estate based on (1) the sales price indicated in the official purchase/sale document (sale contract), or (2) on the official value of the property, whichever is higher.
The taxpayer may choose to pay (1) the 2% real estate transfer tax on the greater of the property's purchase price or the property's official assessed value, which increases slightly per lease year.
Capital gain on a real estate sale transaction
In addition to the transfer of real estate, capital gains tax (if applicable) must be paid to the tax office.
Capital gains tax can be calculated in 3 options:
Option 1 – 10%
This option consists of taking the sale price of the property, less the cadastral value of the property and the expenses related to the sale transaction. This amount will be
The net tax base will be considered to which the 10% rate will be applied, or
Option 2 – 3%
This is a simple calculation, which will be calculated using the same method as the sales transfer tax, taking the greater of the sale price of the property or the official assessed value of the property (whichever is greater). If the taxpayer chooses this option, the amount paid will be considered final,
Option 3 – 0.00
If the property sale transaction does not generate any income, then the seller
You are not required to pay any capital gains, however, regardless of this, capital tax forms must also be completed and submitted to the tax office.
Real estate or property tax
All land and real estate improvements thereon are subject to real estate taxes. The real estate tax is assessed by an agency of the Ministry of Economy and
Finance. It must be paid according to the official appraisal value, which is usually the value declared in the sales document. However, a few years ago,
The government of Panama enacted a law that actually lowered the basis for calculating this tax into several options and only requires a simple legal process.
Property taxes in Panama
As of January 2019, properties can be registered under two categories which are:
Primary property or family heritage
| No. |
property value |
Tax |
|---|---|---|
|
1
|
$0 to $120,000.00
|
0.00
|
|
2
|
$120,000.01 to $250,000.00
|
0.5 %
|
|
3
|
US$ 250,000.01 and more
|
0.7 %
|
Y,
Secondary, Commercial or Industrial Properties
The tax properties applicable in this case will be the following:
|
No. |
property value |
Tax |
|---|---|---|
|
1
|
$0 to $30,000.00
|
0.00
|
|
2
|
$30,000.01 to $250,000.00
|
0.6 %
|
|
3
|
US$ 250,000.01 to US$
|
0.8 %
|
|
4
|
US$ 500,000.01 and more
|
1.0 %
|
Customer Service
BusinessPanama Group
US and Canada Toll Free 1-888-800-8947
Local telephone +507-223-6788
Email - inquiries@businesspanama.com
www.BusinessPanama.com
