The asking price is not the whole cost of a purchase. Panama's transaction taxes and fees are modest by international standards, but you should know them before you make an offer, because who pays what is negotiated in the promesa.
Transfer tax
Panama levies a 2% property transfer tax (ITBI) on the higher of the sale price or the updated registered value. By custom the seller pays it, but the promesa can allocate it differently.
Advance capital gains
On a sale, the seller pays a 3% advance on capital gains, credited against the actual 10% capital-gains tax on the profit. This is a seller cost, but it matters to a buyer because it shapes how a seller prices and negotiates.
Notary and registration
The deed is executed before a notary and recorded at the Public Registry. Notary and registration fees are a small percentage of value; your attorney's fee is separate and typically the largest line in a buyer's closing costs.
Property tax and exoneration
Panama taxes real property on a progressive scale, with a generous exemption on primary-residence (patrimonio familiar) value. Much new construction carries a property-tax exoneration on the improvements for a set period; the land portion remains taxable. Confirm the exact status of any unit before you rely on it.
What to budget
As a rule of thumb, a buyer should budget 2–5% of the price in closing costs — mostly legal fees, notary and registration. Add the building's HOA (quoted per square metre per month) and, if financing, bank and appraisal fees.
FAQ
Who pays the transfer tax? Customarily the seller, but it is negotiable.
Is there an annual property tax? Yes, on a progressive scale, with exemptions for primary residences and many new builds.
Are costs the same for foreigners? Yes. Transaction taxes do not depend on nationality.