Closing costs when buying property in Panama

When you buy property in Panama, the price is not the only cost. The transfer tax, the capital gains tax and the clearance certificates are paid by the seller; the buyer usually pays the lawyer, the notary, the Public Registry and, with a mortgage, the bank’s costs. Here is each one with its official source. Your lawyer confirms the exact amounts.

By Kabasso Pieck Real Estate Group · Sources checked on November 4, 2026

Real estate transfer tax (ITBI): 2%

Panama’s tax authority (DGI) says that transfers of real estate pay 2%, under Law 106 of 1974. The tax is calculated on the sale value, with the cadastral (assessed) value plus 5% for each year since it was bought as the minimum, and it is filed on form 106.

The DGI says forms 106 and 107 are filed by the seller, who must be registered as a taxpayer.

New homes (Law 546 of 2026): on the first sale of a newly built home, the first US$120,000 of the taxable base is exempt, with reduced rates between US$120,000 and US$200,000 and the regular 2% on the rest. The sale must close within two years of the occupancy permit, according to the law firm Fábrega Molino.

Capital gains tax (paid by the seller)

Under article 701 of the Fiscal Code, the seller pays income tax on the gain. The seller pays the lower of two amounts: 3% of the sale price, or 10% of the actual gain (with a sworn statement). If there was no gain, they do not pay this tax, only the 2% transfer tax. The DGI says this tax is paid before the sale is registered.

Why it matters to you as a buyer: until these taxes are paid, the deed is not registered at the Public Registry and the property is not in your name.

Clearances (paz y salvos), paid by the seller

The seller must hand over the property up to date: property tax, water (IDAAN) and, in a building, the maintenance fee. These clearance certificates (paz y salvos) are the seller’s cost; without them the sale cannot be registered.

What the buyer usually pays

• Your lawyer: reviews the title, drafts or reviews the promise of sale and the deed. Fees are agreed with each lawyer; ask for a written quote.
• Notary: the deed is signed before a notary, who charges according to the official notarial fee schedule.
• Public Registry: registration fees for the deed, which depend on the value.

We do not publish percentages for these items because there is no single official figure that applies to every case. Ask your lawyer for a written budget before you sign the promise of sale.

If you buy with a mortgage

• Appraisal (avalúo), paid by the buyer: the bank requires it to approve the loan. If you buy without a bank it is not required, although you can order one to know what the property is worth.
• Deed and notary through the bank: the bank usually prepares the deed (sale with mortgage) and handles the notary, and charges those costs directly to the client.
• Insurance: banks usually require life and fire insurance. Ask your bank for the amount.
• FECI: a 1% surcharge on the loan interest. It does not apply if the property is your primary home; it does apply if it is a second home, or if you buy the shares of the company that owns the property instead of the property itself. Ask your bank.

Run a first estimate of the payment in our mortgage calculator (it is an estimate; the bank gives you the final figure).

After closing: property tax and maintenance

Every year you pay property tax under Law 66 of 2017. If the home is where you live, you can apply for the primary residence or family property regime with the DGI, which takes about six months according to the DGI. In a building you also pay the monthly maintenance fee. Our property tax calculator gives you an estimate.

Checklist before signing

1. Ask your lawyer for a written budget of all the costs.
2. Put in the promise of sale who pays each tax and each expense.
3. Confirm the property is up to date: property tax, water and maintenance fee.
4. If there is a mortgage, ask the bank for the full list of its costs.

Follow the whole process in how to buy property in Panama, step by step and browse the catalog.

General information, checked on November 4, 2026. These are estimates, not legal or tax advice: rules change and every case is different, so confirm yours with your lawyer or accountant.

Sources

Checked on November 4, 2026:

• Panama tax authority (DGI, Ministry of Economy and Finance): Real Estate Transfer Tax, form 106 (Law 106 of 1974)
• DGI: Capital gains return, form 107 (article 701 of the Fiscal Code)
• DGI: real estate FAQ (forms 106 and 107, primary residence and family property, Law 66 of 2017)
• Fábrega Molino, Panamanian law firm: “Law 546 of 2026: The 2% Real Estate Transfer Tax Exemption” (Law 546 of August 31, 2026)
• La Estrella de Panamá: “La venta de activos y su impacto fiscal en Panamá”, by Tania Aguilar de Ortíz (Deloitte), October 4, 2017
• Superintendency of Banks of Panama: FECI criteria for home loans (circular 2024-0064)

Frequently asked questions