Over the last decade the property market in Panama has been left in the shade somewhat due to more “glamorous” tourist and retiree destination of Costa Rica bordering Panama in the North. However the Canal Zone in Panama City was handed over to the private sector in 1999 and this has kick started the property market. Prices have been rising steadily since 2003 and over the next few years increases of 15 to 20% are expected. The best rental yields to be had in Panama are in Panama City on the upmarket waterfront developments along the bay where returns of 7 to 8% are readily achievable.
The market is being driven by US expatriate and retiree demand and numbers moving to Panama over the coming years are expected to increase substantially as the country become better known . The mortgage system is well developed and encourages expansion of the market. Over 150 international banks operate and banks readily offer 70 - 80 % LTV advances to foreign buyers at low interest rates. (Panamas currency is the US dollar, only minting its own coins).
Below is a summary of some of the advantages of investing in Panama;
- Foreigners can buy and own property in Panama with the same rights and protections as Panamanian citizens.
- Residents do not pay tax on income earned in a foreign country.
- Property tax exemptions apply to all new constructions on a sliding scale according to value.
- Tourism investments are exempt from import duties, this includes construction materials and equipment; income; real estate taxes etc.
- Panama is an excellent offshore haven – one of the best in the world.
- Panama’s retiree incentive programme the Pensionado is the best in the world with many benefits and is not necessarily age related.
- English is widely spoken.
- Panama has a growing economy and a stable government.
- Panama has a stable economy that has been based on the US dollar since 1904. The legal tender is the US Dollar.
- With the US having a large presence in the country for many years there are a number of familiar businesses and names present, which has lead to a US style infrastructure.
- US trained English speaking Doctors are available and there are many US standard health care services and facilities on hand.
- Panama has an excellent communications infrastructure with much of the country on ADSL internet and fibre optic telephone lines.
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