The Ultimate Guide: Buying and Selling Real Estate in Panama

In Panama, the purchase and sale of real estate are primarily governed by Article 1215 of the Panamanian Civil Code, which establishes the general rules for property transfer. This article states that the transaction must comply with formal requirements, including drafting a written agreement and submitting the necessary documents for property registration.

It's important to note that both buyers and sellers have specific legal responsibilities. For example:

• The buyer must verify the property thoroughly: ensure it is free of liens, mortgages, or pending legal disputes.
• The seller must provide an updated title deed and be current with the Real Estate Transfer Tax.

Additionally, for more complex transactions, such as those involving trusts or inherited properties, expert legal advice is critical to prevent future complications. Limitless Legal can provide you with the necessary support.

The purchase agreement serves as the legal backbone of any real estate transaction in Panama. As such, it must be meticulously drafted to include several key elements, such as:

• Identification of the parties: Full names and identification numbers (national ID or passports for foreigners) of the buyer and seller.
• Detailed property description: Location, measurements, annexes, and other relevant details.
• Payment terms: Total price, payment method (cash, financing, etc.), and timelines.
• Tax declaration: Allocation of any costs, including taxes, each party will assume.
• Penalties for breach: Measures stipulated in case either party fails to meet the agreed terms.

At Limitless Legal, we assist in reviewing and drafting personalized contracts tailored to your specific needs.

The process of buying or selling a property in Panama follows a structured approach consisting of several key steps:

1. Initial agreement: Both parties negotiate and agree on basic terms, including the sale price.
2. Signing the promise to purchase agreement: This preliminary document ensures both parties' commitment to completing the process.
3. Due diligence: Verification of the property, including legal documents, tax status, and absence of liens.
4. Initial payment: At this stage, a deposit as agreed in the contract is usually paid.
5. Drafting and signing of the deed: Once all terms are met, the public deed is signed in the presence of a notary.
6. Public registry: The deed is registered in the Public Registry of Panama, officially transferring ownership to the buyer.

Our attorneys at Limitless Legal guide you through each step to safeguard your interests.

Some common pitfalls in the process of buying or selling real estate include:

• Not conducting thorough background checks on the property: Ignoring possible liens or registration issues can be costly.
• Lack of a clear contract: Poorly drafted or overly generic contracts invite future disputes.
• Ignorance of tax obligations: Sellers must settle the Real Estate Transfer Tax before completing the sale.
• Not seeking legal counsel: Having a specialized attorney from the outset prevents setbacks and ensures compliance with regulations.

With Limitless Legal, you can avoid these mistakes and handle your transaction with complete peace of mind.

Buying and selling real estate in Panama is not only a relatively accessible process, but it also offers excellent benefits:

• Economic boom: Panama has solid economic growth, which ensures the stability of its real estate market.
• Tax Incentives: A number of properties are tax-exempt for a limited time, especially new construction.
• Attracting foreign investors: Panama is a highly sought after destination for expatriates and retirees due to its climate, strategic location and quality of life.
• Property rental: The profitability of real estate in Panama remains attractive, thanks to the constant demand for rent from nationals and foreigners.

If you're considering taking advantage of these advantages, trust Limitless Legal to ensure that your investment is free from legal risks.