We advise on:
If you are considering a move to Panama, then you will be pleased to learn that there is a large amount of real estate for sale and rent in Panama. Whether you want to find a home in Panama City, a beautiful property in the mountains, a house by the beach, or a well placed business in running, Panama offers it all.
Foreign can own properties in Panama, whether or not they are permanent residents, including coastal property.
Here are the main considerations to be made prior a real state trade.
Buyer and Seller must agree on the following points:
Buyer must consider:
How best to structure the sale. IE. Should they receive the property in their own name, foundation, or corporation.
If they are going to pay cash or finance any amount of the total cost
Legal fees and registration expenses (Buyer pays the fee to transfer title).
Inscription and Notary fees.
Seller must consider:
Taxes due upon sale:
3% capital gains tax based on the sales price or cadastral value, whichever is higher.
2% transfer tax based on the sales price or cadastral value, whichever is higher.
5% capital gains which is retained by the buyer, in the event that shares of a corporation are transferred.
Real Estate Commission which is generally 5% plus ITBMS.
Certificates of good standing (Paz y Salvo):
Property Tax and Corporate tax (if property held in Corporation).
The attorneys must begin a Due Diligence on the property to establish the following:
That the property is dully registered to the Seller’s name.
That the property is in good standing and free of any liens or suites
The due diligence should be conducted before any sales contracts signed or down payments issued.
Promise to Purchase Agreement:
This is a legally binding contract which outlines the terms and conditions of the sale, including purchase price, time frame for closing, and any contingencies. Once the Promise to Purchase Agreement is signed, a down payment is issued to the seller, and there are generally penalties for either party to back out of the sale once the agreement is signed.
Final Purchase Agreement/Deed:
The purchase agreement is prepared when:
The property has been prepared for sale, including:
Payment of transfer and or capital gains taxes have been made
Necessary documents of good standing (paz y salvos) have been obtained
The funds needed for payment of balance due on the property have been obtained in an irrevocable form.
The deed must be signed before a public notary.
Notary and inscription (Public Registry) fees are generally responsibility of the buyer.
If either party does not speak Spanish then a certified translator must be present at signing in order to translate the deed.
Once the deed has been signed by both parties, the notary will proceed to “close” the deed, meaning they revise the tax payments, and apply the necessary stamps and seals.
Once closed the deed must be physically taken to the public registry where it is inscribed to be recorded, thus making the transfer of the property official. This generally takes about 2 weeks time.