The Return of Panama’s 20-Year Property Tax Exemption
Date: 01/06/2008
Build a home in Panama and avail property tax exemption for 20 years.
Monday, Jan. 7, 2008
Read more about Panama in International Living Postcards--your daily escape
One of the main incentives to buy property in Panama was the 20-year property tax exemption law, first passed in 1990 to encourage economic development and investment. The exemption freed buyers of new homes or condos from paying property tax for up to 20 years.
The exemption had been extended several times, but finally expired Aug. 31, 2007. The government introduced new exemptions of five to 15 years, depending on the value of the property. Though real estate companies, construction companies, and developers lobbied for the return of the 20-year blanket exemption, the government refused. Until now...
The government of Panama had a change of heart. On Saturday, Dec. 22, Housing Minister Balbina Herrera extended the 20-year tax exemption until Dec. 31, 2009. “We are doing this not only because the construction sector is important to the national economy, but also because 95% of the new construction is for nationals and only 5% for foreigners,” said the minister, seemingly in response to critics claiming the exemption benefits wealthy expats rather than the struggling Panamanians it was intended to help.
Bottom line: If construction on your new residential property is complete by Dec. 31, 2009, you won't pay property tax for 20 years from the date of completion.
Even if you buy a resale, the remaining exemption time is transferred to you. For example, if you buy a residential property that was built in 2000, you won’t pay property tax on it until 2020.
Just remember, land itself is not exempted and will continue to incur property taxes if its value is above $30,000.
Jessica Ramesch
The Panama Insider, International Living
P.S. If you've been planning to buy property in Panama, this new exemption extension is reason enough to get moving and make it happen. Start the new year with concrete plans to finally visit Panama and see for yourself why we're so keen on it. The 2008 Live and Prosper in Panama Seminar is just the ticket--you'll get all the information you need from the best Panama experts all in one fun-packed seminar. Contact our Events team at 1-866-381-8446 (toll free), 1-410-230-1243, or events@internationalliving.com for more information…and remember, the early bird gets additional savings.
Rate this Postcard:
Rating: 3/5 (83 votes cast)