As the top offshore haven and the No. 1 choice for countless retirees, expats, businesspeople, and investors, many North Americans contemplate purchasing property in Panama. If that’s something on your mind, you’ll be happy to hear that this country welcomes foreign buyers.
Unlike most other countries, foreigners have nearly the same rights as Panamanian citizens to hold property titles.
You’ll find your real estate dollar brings more bang for the buck in Panama, and you’ll have many buying choices, from swanky beachfront retreats to hideaways in the highlands and cosmopolitan city living. Of course, as with anything, it’s essential to weigh the pros and cons before deciding whether or not to own property in Panama as a North American.
Pros
Purchasing Rights
As mentioned, Panama is different from most countries as you’ll have nearly the same rights as Panamanians do when purchasing properties. North Americans can buy real estate here as long as it’s not within a reservation for indigenous people or a military zone or located less than 10 kilometers (6.2 miles) from its borders. The same restriction once applied to all island property, but that’s been eliminated. Unless the island is under 10K from Columbia or Costa Rica, a foreigner can buy the whole island or land on an island.
A North American can buy multiple properties across the country, and in many cases, there are ways around the 10K rule as well. As long as you have the money, there are no laws that will stop you other than those above. The only noticeable difference is that the process takes a bit longer.
Low Holding Costs
A big pro for owning property in Panama is that the holding costs also called carrying costs (the recurring expenses associated with owning property), are low. They’re typically paid monthly and include property taxes, gas, water, electricity, etc.
Electricity
For a 120-square-meter (1,292-square-feet) apartment, you’ll pay approximately $150 per month.
Gas
Gas for a space of the same size will range from $7 to $10 per month.
Water
Water costs typically range from $7 to $10 per month.
Property Taxes
Annual property taxes are just .5 percent of property values, starting at $120,001. Properties valued below that amount are exempt from taxes. If the property is valued above $700,000, it’s taxed at a rate of .7 percent.
If the home you buy is valued at $300,000, you will pay .5 percent on $300,000 minus $120,000, which comes out to $900 for your annual property taxes. Coupled with the other expenses, the overall holding costs are low.
Easy Access
Once you move to Panama, you’ll probably want friends and family to visit and make occasional trips back home. Knowing that you can return quickly brings peace of mind in an emergency. Another significant benefit of owning property here is that Tocumen International Airport in Panama City is the hub of the Americas. There are direct, non-stop flights to many airports in the U.S., including Miami, which is only a 2.5-hour flight and a central North American hub for flights elsewhere. Direct, non-stop flights between Toronto and Panama City are also available, making it convenient for Canadians.
Anyone who’s tried to work or conduct other business and keep in touch with family and friends through multiple time zones knows just how challenging that can be. But if you own property in Panama, that will be much easier as it’s in the GMT -5 time zone, the same time zone as the Eastern Time Zone in the U.S., including New York City and part or all of 23 states, as well as areas in eastern Canada.
Cons
Climate/Humidity
While there are some benefits to higher humidity, such as more supple, glowing skin and relief of specific respiratory symptoms, there’s no doubt that it can cause some difficulties, too. Not only can it make hair difficult to manage, but it can also result in things in your apartment or house going bad much quicker, so you’ll want to improve airflow or get a dehumidifier if you plan to leave for an extended time.
The Mañana Concept
The mañana concept is a way of life in Panama and most Latin countries. While it translates to tomorrow, it means that life happens at a slower pace, not necessarily when you want it to. Inconveniences that require more patience can and will probably occur. For example, your handyman might arrive two hours late, but it will be much cheaper than you’d pay in the U.S. or Canada.
A Con That’s Changing Into a Pro
Finally, not everything will be as convenient as you’re used to back home, but that is changing. Processes are becoming more modernized right as we speak. For example, while you used to have to go physically to pay your water and gas bills, now you can pay them online. Walking here to get something done can be a lot more enjoyable, with friendly waves from the locals and all of that spectacular beauty.
Sources:
https://www.flightconnections.com/flights-from-panama-city-pty
