The new expansion of the real estate market of Panama
2011 has seen a new increase in sales volume
The real estate market of Panama experienced a very positive trend between 2005 and 2008 attracting plenty of overseas investors. Since 2008, instead, the volume of sales has fallen by 50%. 2011 has seen a new increase in sales volume while prices have remained stable.
Prices start around $ 325,000 in the Pacific Coast Beach Resort. High-end properties can cost up to $ 2.5 million. In Panama City prices of luxury homes range between $ 600,000 and $ 1 million.
Property buyers come from around the world: the number of investors coming from North America has decreased, but the number of purchasers coming from South and Central America has increased. Panama attracts above all investors from Argentina, Colombia, Peru, Ecuador and Chile. Panama is an appealing investment destination for buyers coming from Western Europe – particularly from France, Italy and Britain.
But, what should a foreign buyer know before purchasing a real estate property in Panama? First of all, an overseas investor should hire a lawyer to handle the transaction and conduct negotiations. Legal fees amount to 1% of the purchase price. The buyer will also have to pay a 1%-fee for the registration of the deed.
Foreign buyers can also obtain a mortgage up to 75% of the purchase price for a 0.5%-1.5% origination fee. The loan term depends on the age of the subscriber: the older the buyer, the shorter terms will be. Overseas buyers will not have to pay for broker commissions, since they are paid by the seller who pays a 5% tax on the sale price, too.
The government has introduced new tax exemption rules. Tax exemption periods depend on the property sale price, at the moment. Once the exemption period has expired, the owner will be obliged to pay a 1% annual tax calculated on the registered value of the property.
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