Panama

Registering Property in

Panama

Listed below is a detailed summary of the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute.

The information appearing on this page was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 183 economies. The most recent round of data collection for the project was completed in June 2011.

  • Standard Property Transfer

  • Property Value: USD 355,080.2
  • City: Panama City

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No. Procedure Time to Complete Associated Costs
* 1 Obtain a non-encumbrance certificate at the Public Registry Office

Parties obtain a certificate of non-mortgage and non-litigation before starting the transaction. This certificate is obtained at the Public Registry Office.
In many cases, it is advisable for property sales, that a surveyor is engaged to verify the correct measurements and location of the properties.

Agency: Public Registry Office ("Registro Público de Panamá" www.registro-publico.gob.pa) 		1 - 3 days (simultaneous with procedure 2) USD30
* 2 Obtain a certificate of good standing online from the DGI

The seller must obtain a Real Estate Tax Clearance Certificate. This Certificate have relation with the real property tax paid by the owners. In order to obtain this document the property shall be registered at the Online System of the Directorate General of Revenues (DGI). This certificate can be obtained online since 2009, and the printout must be submitted to the Public Registry Office. Once submitted the Public Registry will verify it again online. This certificate can be requested by the individual or entity which has a password to enter the DGI Online System , and must have the lot number and the page number (document number), issued by the Public Registry Office. It can also be obtained online by the individual or entity which has a password to enter the DGI Online System. Note that a land with a value under USD 30,000.00 is exempt of the Real Property Tax. Owners pay this tax according to a progressive scale that ranges from 1.75% on the excess over USD 30,000.00 to 2.10%on the excess over USD 75,000.00.annually based on the cadastral value of the property.

Agency: Tax Agency ("Direccion General Impositiva" - DGI) 		1 day (simultaneous with procedure 1) no cost online
* 3 Obtain a non-debt water certificate ("certificado de Paz y Salvo")

According to the law 77 of December 28, 2001, it is necessary to submit a certificate stating that no water bills are owed to the Public Registry in order to record the Public Deed of the acquisition of a property. The “certificado de Paz y Salvo” from IDAAN will be issued in 24 hours, and costs 1 BALBOA with 00/100 (B/. 1.00) plus the stamp of 25 cents BALBOA (B/. 0.25).

Agency: Instituto de Acueductos y Alcantarillados Nacionales (I.D.A.A.N.) 		1 day (simultaneous with procedure 1) USD1.25
4 A lawyer prepares the sale agreement

A lawyer usually prepares the sale agreement (it can also be prepared by a real estate broker). In any case, the sale agreement -called the Minuta- needs to be stamped by a Panamanian lawyer prior to being executed in a public deed. The sale agreement should mention that there are no mortgages or limitations on the property.
The documentation shall include:
Non-encumbrance certificate (obtained in Procedure 1)

 2 days USD 200 (lawyer’s fees)
5 Payment of the Transfer and Capital Gains Taxes

Prior to filing and recording the public deed at the Public Registry Office, the Transfer Tax should be paid (if it’s not exempt by any particular reason established by law) at the Ministry of Economics and Finance, by the seller. Transfer tax: 2% of the price of the transaction or the cadastral value, whichever is higher. There is no VAT in Panama for transfers of property

Law No.49 of 17th September 2009, which amends the Fiscal Code and adopts other fiscal measure, sets forth the obligation for sellers to pay a sum equivalent to 3% of the total value of the sale or of the cadastral value of the property, whichever is higher, as an advance payment of the Income Tax applicable to any profit resulting from the sale operation. In such cases, the taxpayer may opt to consider such 3% as the definitive Income Tax to be paid for profits earned. However, where such 3% advance payment exceeds the amount resulting from application of the nominal rate of such tax, which is 10% of the difference between the real value of the sale and the sum of the cost to acquire the property plus the expenses required to carry out the operation, the seller taxpayer may ask the General Income Directorate for reimbursement of the sums paid in excess, whether in cash or by means of a fiscal credit that can be used to pay other taxes.
Previously and since 7/2006, the 10% of capital gains tax was calculated and paid at the moment of the sale as well as mentioned in the sale act by the notary; the gain was calculated by calculating the gain (sales minus buying cost minus expenses- lawyers, notary fees).

Agency: Ministry of Economics and Finance 		2 days 2% of property value (transfer tax) + 3% of property value (capital gains tax)
6 Notarization of the sale agreement and preparation of the public deed

The notary notarizes the sale agreement and prepares the public deed. All transfers of property must be notarized or made into a public deed before filing for recording at the Public Registry Office. The documentation shall include:
Sale agreement (prepared in Procedure 3)
Receipt of payment of the transfer tax (obtained in Procedure 4)
Certificate of good standing with the cadastre (obtained in Procedure 2)
Good standing certificate with water utility services (Clearance certificate issued by Instituto de Acueductos y Alcantarillados Nacionales (I.D.A.A.N.))

 2 days USD 100
7 The public deed is filed and recorded at the Public Registry Office under the name of the buyer

The public deed is filed and recorded at the Public Registry Office under the name of the buyer. The registration fee is paid at the National Bank in favor of the Public Registry Office. The bank has a branch inside the registry office. Since 1999, there has been an optional expedited procedure in which one can obtain registration within 24 hours, at an additional cost of $250 though not many people choose it because it is rather expensive.

The documentation shall include: the notarized public deed (obtained in Procedure 5), certificate of good standing with the cadastre.


Agency: Public Registry Office ("Registro Público de Panamá" www.registro-publico.gob.pa) 		7-10 days 0.25% of property price (registration fee) + USD 5 for filing + USD 10 for analyzing the document
8 A copy of the recorded deed is filed at the Cadastral Office

A copy of the recorded deed should be filed at the Cadastral Office to record the new buyer for tax purposes as the new person responsible for the payment of the property tax. This should be an internal procedure after Procedure 6, but in fact, the buyer needs to do it in person so far. The buyer picks up the certificate of good standing with the new name and value at the end of the 2 weeks.

Agency: Cadastre and Patrimonial Property Directorate 		15 days no cost
* Takes place simultaneously with another procedure.
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