Panama Info
Joined: 16 Nov 2006
Posts: 17
Home Country: panama
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 Posted: Tue Nov 21, 2006 5:42 am Post subject: HOUSING IN PANAMA |
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HOUSING IN PANAMA
Renting a Property
Renting in Panama is a good idea, expats often live in small communities and it is wise to make sure you have a good fit before you buy. Some Realtors recommend 6 months to a year of renting before you decide to buy.
Here are some tips on finding a good rental property and the rental process:
- Ask friends and contacts, good property is often found through word of mouth
- Try the La Prensa or El Siglo classifieds section
- Look for signs in windows
- In some places you can find classifieds online in English, try the Panama Unclassifieds at Yahoo!
- Rental contracts are for 1 year. They may be renewed automatically and increase 15% per year if the price is in Colones.
- Prices are based on location. In rural areas you can get a large house with a large yard for $500 per month, in more exclusive areas they will cost $3000.
- A security deposit is usually required, returned when you leave if everything is in good condition and if you have given written notice 30 days in advance.
- Utilities are generally separate.
- Rent for apartments or offices built before 1984 that have a monthly rent between $250 & $500 may not be raised without approval from the Housing Ministry. All other leasing contracts are unrestricted.
Buying a Property
First, determine where you want to live. Do you dream of retiring to a hammock on the beach? Do you have children who will be attending classes? Do you want to be near the services and amenities of the city? Do you want to mix with the locals or make friends who are expatriates too? The top areas for expatriates are Panama City (the Casco Viejo for true Colonial architecture and the rest for the cosmopolitan amenities), Bocas del Toro (beach people) and Boquete (fresh mountain air and coffee plantations).
Once you have an idea of where you'd like to live, you should locate a reputable Realtor that specializes in that area. They will talk with you to determine your expectations and budget, then show you suitable properties. This will save you time, as many properties advertised in the local papers are not suitable for expatriates since they are built for Panamanians who have completely different priorities and needs. A good Realtor will help you avoid common pitfalls and help you stay away from properties you may have trouble reselling later.
Your Realtor will help you negotiate a price for the property and explain the title transfer process to you. If you do not already have a good lawyer, they can recommend attorneys who have done a good job for their clients in the past and who can help you with other legal matters.
Registration is done at the National Registry, normally it takes 6-10 weeks. Panama uses the Torrens system. Every transaction relating to real property must be registered in the Registro. Any leins, mortgages or easements to the property must appear in the Registry in order to be valid, so once the property is registered in your name, you don't need to worry about any later claims to the property.
Taxes
* Property Tax - This tax is regulated by Article 766. The maximum annual percentage of assessment is 2.10% over the value of the land (land value under US$20,000.00 is exempt). The property tax is also levied on the declared value of improvements built on the land. The owners must pay according to the official assessment value (which is usually the declared - commercial - value on the last purchase Deed).
* Transfer Tax on Real Property - All sellers are obligated to pay, at the moment of a transfer of a real property, the transfer tax. The seller has 2 options:
1)Pay 2% of the declared commercial sale price, which is understood as an advancement payment on the capital gain.
2) 5% tax of the assessed value, which is established by adding a 10% increase per annum, on the purchase value, starting the year that the seller purchased the real estate (this alternative includes payment of the capital gain tax).
* Capital Gain Tax - This tax is applicable if the alternative of 2% for Transfer Tax is used for the transfer of real property and if there is a capital gain. This tax is also regulated by Article 699 and for corporations acting as sellers, a 30% flat tax payment on the profit will be applicable, notwithstanding, if shareholders are foreigners. Another percentage will be applicable if the seller is a physical person. If there is no capital gain on the transfer of a property, the 2% transfer tax, paid in advance for the sale and understood as a credit for the seller, will be lost.
* Inheritance Tax - This tax was abolished in 1985. |
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