Here are some of the transaction rates that you need to settle whenever you are about to purchase a property here in Panama. The rates are said to be reasonable as compared to those imposed in other countries so you won’t have a problem shelling out excessive amounts of money once you get a property of your own here in Panama.
Moving on, you might wonder how easy (or difficult) it is to purchase a property in Panama. You’ll also ponder if the process of purchasing a property can be a hassle. The answer, the process may take time but if you hire a competent lawyer and real estate agent – everything becomes doable and you’ll end up learning a lot of how things are being done here in the country.
In terms of foreign ownership on properties in Panama, the terms are pretty much the same with local residents. However, based on Panama’s Tax Code – foreigners or Panama companies run by foreigners can’t buy a property that is located with the ten kilometer area on islands and frontiers that are under the country’s jurisdiction. Foreigners can still conduct business in Panama without restrictions but within lawful guidelines.
In fact, Panama urges long-term investment by the foreigners and also offers the Pensionado (or retiree incentive) program. This program can be availed in order to have tax exemptions or have discounts on basic and utility services.
In order to be protected by the rights set up by the Panamanian government, foreigners are advised to set up their business as a Panamanian Corporation. By doing so, foreigners are protected from lengthy legal proceedings and can use the Panamanian law to protect themselves. The foreigners also get fair market value on local lands.

There are two options that the foreigners can avail of in order to make sure that the purchased property is titled and that the purchase can be made by right of possession.

•    Titled Properties: The Registro Publico or Public Registry Office has the record of titled properties located in Panama’s nine provinces. The Public Registry can provide information on titled properties. Before you purchase a property, make sure it is titled by inquiring at the Public Registry.

In order to make sure that you are in the right track of purchasing a titled property, make sure that you have done your pre-sale research such as making sure that the land is titled. Also make sure that the land tax is in good standing (no outstanding balance), utility bills are settled (water, electricity, telephone etc.), cadastral maps are reviewed and that there are no other liabilities imposed on the property or the property’s owner.
Before proceeding with the purchase, make sure that there’s an agreement or “Promise to Purchase” contract in order to prevent the seller from offering the property to other prospective buyers. Hire a competent attorney to review the contract and make sure that there are loopholes that will exempt the seller from hidden issues. An indemnification clause must be included in order to protect yourself.

The agreement should be recorded at the Public Registry for documentation. The ownership is established once the changes have been made and documented by the Public Registry.  The seller won’t be able to get the payment until such time that the transfer of ownership had been officially registered. Funds or payment are usually done through escrow agreement, which means that the money can be released by the bank to the seller once everything has been settled.

•    Properties’ Possession Rights:
There are certain properties here in Panama that is not registered at the Public Registry. Most of these properties are located in islands, beachfront areas and tourism zones specified by the government. These areas are usually managed by local or national government. In this case, “possession rights” can be given to those interested individuals who want to have access to these lands at a certain period of time.
As one of those who will avail of this kind of ownership, you should be vigilant when it comes to dealing with the authorities.

First, you need to determine if the right government unit issued the awarding of the property to you. You can hire a qualified lawyer to look into the agreement and the processes.
Second, there should be a complete documentation of what property you are going to get. Detailed information such as limits, encumbrances, boundaries and other pertinent data should be drawn out. A blueprint could add more credibility on the property you are going to get.
Third, make sure that the agreement that you have undertaken with the government agency is legal. You must make sure that constructing your business establishment on the property is within the standards of the local or national government.
Fourth, make sure that you are amenable with the time period of property ownership imposed by the government.

The transaction pertaining to possession rights can run up to six months. This will give you enough time to mull things over, review the situation and come up with your own sound decision.

There are two situations wherein Derecho Possessorio (or Possession Right Properties) can take place.

•    First, the land operated by the government can be occupied by peasants. These occupants can claim right on the land after a certain period of time and can use the argument of “right to use.” This right can still be sold in the future.
•    An unoccupied private land with third parties working on the area for at least five years. These parties can claim right on the land. They can use Derecho Possessario as a legal argument and all they need to do is to get witnesses that they are indeed toiling in the land within the required period. Owners of these private lands can prevent this from happening by doing frequent check up of the land or to construct a building or business venture on it.
You need to know that there’s a major difference between Derecho Possessario and Title Property. The latter can be mortgaged while the former can’t.
A friendly advice, you need to be careful when you are dealing with real estate agents in Panama. There are some agents who charge exorbitant rates for a property. You might be surprised that the actual owner has sold the land at a much lesser rate, with the agent padding about a hundred percent of the original selling price. What’s more disturbing is that they also ask for their commission from the original sale. Therefore, you must really talk to the seller personally in order to determine the real asking price.
If the real estate agent prevents you from speaking with the actual owner of the property, then it is time for you to not proceed with the transaction.  If you are in doubt, it means that you need to do more research.