Panama property taxes

The property taxes in Panama are based on a sliding scale with lower-cost properties paying less and more expensive properties shouldering a heavier burden. Panama Properties that have a registered value of $30,000 or less don't pay property tax. Panama Properties are taxed 1.75% between $30,000 and $50,000; a tax of 1.95% is levied for property values between $50,000 and $75,000; and 2.1% is charged for any property value above $75,000.

For construction permits issued after Sept. 1, 2006 these exemptions apply:

o Value up to $100,000: 15-year exemption

o Value from $100,000 to $250,000: 10-year exemption

o Value over $250,000: five-year exemption

Basic Real Estate Laws and How They Affect Buyers

The down payment is an agreement made by the buyer to the seller demonstrating his intent to purchase any Panama property. The standard down payment is 10% of the purchase price. Panamanian law has an interesting provision regarding down payments; if a seller backs out of a purchase agreement, the law entitles the buyer to double the down payment for damages. When a buyer makes a down payment, the law then encourages the seller to honor his or her side of the agreement and avoid the temptation to search further for a better deal.

The Promise to Purchase agreement is critical to the entire process. This contract includes the legal description of both the transaction being executed and the parties involved. All necessary information is included in this document including the property description, the terms of the deal and the legal identification of both the buyer and seller. This document is later conveyed to the escrow company and both the information for the title the names for the disbursements are taken from its pages.

Types of properties

Panama property is broken down into two different types: titled land and "right to possess". Understanding these two types of property are critical to understanding exactly what you are buying.

Titled land

Titled land is the term for all properties that are recorded in the Public Registry. A formal history of ownership is available and any liens or other claims against the property are included. Like properties in the US, Panama property that is titled cannot be sold without a clear title, making the title search an important step in the process. It is wise to note that you can purchase title insurance and it is as strongly suggested for real estate in Panama as it is for real estate in the United States.

"Right to possess" property was established by the Panamanian government in 1971 to encourage inhabitation of unclaimed, untitled land. While "squatter's rights" haven't been used in the US for quite some time, it is still valid in Panama. For "right to possess" Panama property, it is very important to have a good attorney as legal issues could arise if proper procedures have not been followed by the previous owners. While this is concept is somewhat strange to Americans, don't be scared away if the property you want is 'right to possess". It is important that you and your attorney follow proper procedure and you can still securely get a great deal on your new real estate.

Conclusion

While purchasing Panama property is very similar to purchasing land in the US, there are still differences. It is important to understand the differences and for you and your attorney to closely follow the processes for each transaction. If done properly, purchasing property in Panama can be a very simple and rewarding process.

http://www.panamarealestatesearch.com A site dedicated to information about Panama and Panama real estate.