A Czech or Slovak citizen is not subject to any significant restrictions when purchasing real estate in Panama and may own property there either as an individual or as a legal entity, under the same conditions as local residents. Panama grants foreigners full ownership rights, with the exception of specific areas defined by law (e.g., border zones).
With a real estate investment of at least USD 200,000, a foreign investor may obtain Panamanian residency. The most common options are the Friendly Nations Visa or the Panama Real Estate Investor Visa, which are intended for investors from selected countries (including the Czech Republic and the Slovak Republic) and allow long-term residence in Panama based on property ownership.
Property Purchase Process
Identification of the Buyer and Bank Account
The first step in the property purchase process is the identification of the buyer (a valid passport) and, typically, the opening of a bank account with a Panamanian bank. Transactions in Panama are generally conducted in U.S. dollars (USD).
Opening a bank account is not always mandatory; however, it is highly recommended for reasons of payment transparency, tax reporting, and potential mortgage financing. Initial payments or deposits can also be made from an account held in the Czech Republic or the Slovak Republic.
Reservation Agreement (Promesa de Compraventa)
After selecting a specific property, the process typically continues with the signing of a reservation agreement / preliminary purchase agreement (the so-called Promesa de Compraventa), under which the buyer pays a deposit, most commonly in the amount of 10% of the purchase price.
The reservation agreement sets out the terms of the purchase, deadlines, the method of payment of the purchase price, and the responsibilities of both contractual parties.
If the buyer withdraws from the agreement, the deposit is generally forfeited. If the seller withdraws from the agreement, the deposit is refunded to the buyer (the specific conditions may vary depending on the contractual arrangements).
This step also includes a legal due diligence of the property, which verifies ownership rights, any existing liens, debts, easements, or other legal encumbrances.
Notarial Deed of Property Transfer (Escritura Pública)
The transfer of property ownership in Panama takes place exclusively through the signing of a purchase agreement – a notarial deed (Escritura Pública), prepared by a Panamanian notary.
The notarial deed includes all terms of the transfer, the purchase price, the method of payment, and the identification of both parties. By signing this public deed, ownership is officially transferred, effective on the date the purchase agreement is signed.
After signing, the deed is submitted for registration with the Registro Público (public property registry). The registration process usually takes several weeks to months, although the signed Escritura Pública itself already serves as proof of ownership.
Payment of notary and registration fees is handled by the notary, typically through payment to a government account.
Costs Associated with Property Purchase
One-Time Costs for the Purchase:
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Property Transfer Tax – 2% of the purchase price or the registered property value (whichever amount is higher).
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Capital Gains Tax Deposit – 3% of the purchase price (typically paid by the seller unless otherwise agreed in the contract).
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Notary and Registration Fees – approximately 1–2% of the purchase price.
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Legal Services (Attorney) – typically 0.5–1% of the purchase price.
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Real Estate Agency Commission – as agreed, usually 3–5% (most often paid by the seller).
Costs Associated with Property Ownership and Maintenance
Annual Property Tax
Panama is among the countries with very low property taxation compared to most other nations. The annual property tax (Impuesto de Bienes Inmuebles) is based on the value of the property:
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$0 – $120,000: tax-exempt
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$120,001 – $700,000: 0.5% per year
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Over $700,000: 0.7% per year
Many properties, especially new constructions, also qualify for tax exemptions, which typically last between 5 and 20 years, depending on the property’s value and type.
Other Operating Costs:
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Homeowners Association (HOA) / Condo Fees – depending on the type and location of the property.
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Utilities and Services Costs (electricity, water, gas, internet, maintenance)
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Property Insurance
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Potential Income Tax on Rental Revenue, if the property is used commercially
Other Fees
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Fee for Recording the Property Transfer in the Registro Público (tiered based on the property’s value)
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Notary Administrative Fees
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Potential Bank Fees for Transferring the Purchase Price
All taxes and fees associated with the property transfer are calculated by the notary when preparing the Escritura Pública.
