How to pay my annual real estate tax in Panama

If you are not familiar with the process to pay taxes in Panama you are better to hire an attorney who will help you in all the process. Many attorney firms have a bilingual stuff.

Real estate assets are, without doubts, one of the most secure and profitable ways of investment.

There are two main reasons for this:

1. Properties always tend to increase their value in the long term.
2. They generate an income for their exploitation (rental/yields).
In Panama, Real Estate Tax is not municipal, but national and the Entity responsible for its collection is the Ministry of Economics and Finance. Located in Ave. Peru. It must be paid according to the official assessment value, which is usually the declared value on the sale document.

Real estate located in Panama, whether urban or rural, is subject to property taxes.
The tax base depends on the total value of the land, plus all improvements, as appraised by Land Commission (Oficina de Catastro).
Real estate transactions at prices above the appraisal value automatically increase their value for tax purposes.

The maximum annual percentage of assessment is 2.10%, which is based upon two items:
- Over the value of the land, and
- Over the declared value of the improvements built.
The taxable base will depend upon the total value of the land plus all improvements.
Real estate transactions at prices of more than the appraisal value will automatically increase the value of said properties for tax purposes. Certain properties and improvements thereon are exempt or can obtain exemptions from real estate taxes according to special incentive tax laws.
Taxes can be paid in three installments, namely by April 30th, August 31st, and December 31st.
Property taxes are only levied on properties that have a registered value of US$30,000 or more (registered value is the value stated on the public deed that is registered at the Public Registry).
The maximum annual property tax is 2.1% for any property valued above $75,000. For further information see our section on Panama Taxes.
Possession Rights properties do not incur property taxes, since the property technically belongs to the government of Panama.
A Property taxes cover the fiscal year that runs from July 1 to June 30. Current taxes may be paid in full on or before August 31.
Individuals also can pay half of their property taxes on or before August 15, anddd pay the other half on or before January 15 without interest and penalty.
Panama Property Tax:
Properties with a registered value of $20,000 or lower do not pay property tax.
For properties of a higher value they pay as follows: 1.75% from $20,000 to $50,000; 1.95% from $50,000 to $75,000; and 2.10% over any property value above $75,000.
If you buy or build a residential property in Panama, you may be exempt from property tax for up to 20 years.