1) WHY PANAMA?
WHY PANAMA? THE ADVANTAGES OF PANAMA AS AN INVESTMENT PLACE.
- US dollar as official currency (Investment Insurance) – Don't worry about currency devaluations.
- The Panama Canal and its 8 billion dollar expansion project.
- The best Retirement Program in the world.
- Real Estate Tax breaks on homes and apartments.
- State of the Art Health System – Pair with US and European facilities – New John Hopkins Affiliated Hospital.
- Low cost of living and great lifestyle – Real Estate is the fraction of US cities and the cost for a maid is $200 a month.
- Good weather all year round. 75° to 85° in low altitudes and 60° – 70° in its highlands.
- No Natural Disasters, no hurricanes.
- Panama has the highest per capita US investment in all of Latin America.
- History of low inflation, the best in Latin America.
- Location – In the heart of the Americas. Access from 7 major US cities and only 2 ¾ hours from Miami.
- Full Title to Properties – There are no restrictions on foreign ownership, foreign investors are treated as locals.
- Banking and Finance Center – Panama is an international banking paradise, low mortgage rates are plentiful and the Movement of Funds is unrestricted.
- Our democracy – The government is stable and the business climate is upbeat.
- Tourist Investment – benefits that include taxes without income or with capital gains.
- The Kuna Indians of the San Blas Archipelago, one of the indigenous colonies in Panama that greatly contribute to the charm of the country.
- Panama has 500 rivers and 1,600 islands.
- Great biodiversity and jungles, with more than 900 species of birds.
- Many options – City, Beach, Islands, historic sites and Mountain communities to choose from.
- Great infrastructure and activities – US-style shopping malls, highways, Big Game Fishing, Diving, Eco-tourism, surfing tournaments, golf, quality restaurants and nightlife.
- Colon Free Zone – One of the largest in the Western Hemisphere, the main reason that Panama offers excellent prices on products.
2) WHAT ARE THE PROCEDURES FOR BUYING REAL ESTATE IN PANAMA?
- Select a trusted Real Estate Agency like Servmor Realty.
- Create a relationship with an agent who clearly understands your needs. The more communication there is, the greater the chances of finding the property of your dreams.
- We offer Buyer Representation.
- Identify the different sectors that could be of interest to you and visit some of the options.
- Determine the sector is in your interest to concentrate on it.
- See the different options within the identified sector.
- Select the option and negotiate the best possible conditions, through our Relocation Representation and Purchase Agreement that will deal with your option of interest.
- Sign a Reservation Agreement to guarantee the property and the necessary diligence to proceed with the purchase.
- Sign the Promise to Purchase Contract, at this stage a 10% initial payment must be paid to the Seller (common practice in Panama). Funds can be Bank Transfer to our account after signature if stated in the terms. In New Developments, the initial payment can be up to 30%.
- Submit a Promise to Pay Letter to the Seller – about 30 days after signing the Promise to Purchase Contract.
- If you paid in cash with transfer of funds to the Servmor Realty account , the Letter of Promise to Pay will be requested as guarantee on behalf of the Buyer. This Letter is executed once the property is in the name of the buyers in the Public Registry.
- If it is on credit, the Bank will issue the Letter of Promise to Pay.
- The seller will prepare the documents for the Real Estate Taxes, Condominium Association Tax, and Transfer of Water and Property Tax.
- Preparation and signing of the Purchase Contract (this is done by the lawyer appointed by the buyer)
- Proceed to register the title in the Public Registry – the closing costs will be paid by the buyer and can be from $500 – $2,500 (varies depending on the value of the property).
- The previous Title of the property is sealed in the Public Registry and takes about 10 business days.
3) CAN FOREIGNERS OWN TITLED PROPERTIES?
Yes, foreigners have the same rights as Panamanians and Panama has very strict property rights in terms of protection.
4) WHAT ARE PANAMA REAL ESTATE TAXES?
- There is a Land Tax and Fiscal Improvements Tax.
- Land tax is exempt from the first $30,000 of value, throughout the $30,000 the tax is 2% of the value. Example: On a $100,000 lot, you will pay an annual tax of $1,400 ($70,000 x 2%).
- Tax improvements are exempt for 20 years, during this period it is approximately 2% of the value. As of September 2007, taxes may vary based on property value as shown below:
Less than $100,000 – 15 years
From $100,000 to $250,000 – 10 years
More than $250,000 – 5 years
- Brake tax on improvements goes from one owner to another. Example, if you buy a property built in the year 2000 that will have a 14-year tax break.
- There are special benefits that apply to farms, Right of Possession, Casco Viejo and Tourism Real Estate Investment. Contact our agents for more details.
5) ARE THERE ANY CLOSING COSTS?
Yes, they can range from $500 to $2,500 depending on the value of the property. This cost is paid by the buyer, as well as legal fees, notary bills and the cost of registration.
In addition, the seller assumes the payment of a 10% capital gains tax that is equal to the sale price less the registered price and the cost of Sale, and 2% transfer tax.
6) WHAT ARE THE COMMON COSTS OF REAL ESTATE?
Municipal lands of Panama.
7) WHAT ARE THE CONSTRUCTION COSTS IN PANAMA?
It can be anywhere from $45 to $75 per square foot (varies based on finishes).
8) CAN FOREIGNERS ACQUIRE MORTGAGES?
- Yes, Panama has over 100 banks for you to choose from.
- Rates are similar to the US (around 6% – 7%).
- Terms of up to 30 years.
- Financing of up to 80% of the value of the property.
- Land loans are not common.
- Life and Fire Insurance are required. Life insurance can go up to 75 years, which limits the term of the loan.
- Come prepared.a
9) HOW TO GET TO PANAMA?
Panama is the Hub of the Americas with seven (7) direct flights from the US (Miami, Orlando, Atlanta, Newark, New York-JFK, Houston and Los Angeles). Also with direct flights from all over the Caribbean, Central and South American countries and from Madrid, Spain.
10) WHAT SECTORS OF PANAMA DO FOREIGNERS MOVE TO?
- City of Panama.
- Sector of the Pacific beaches, near the city of Panama.
- Mountains near Panama City such as Altos del María and El Valle.
- Boquete, surrounded by Highlands.
- Bull's mouths.
11) WHAT ARE THE COMMON MAINTENANCE COSTS (HOA FEE)?
- In Condominiums it can be 0.10 to 0.15 cents per square foot of the home. Example, for a 2,000 square foot condo it is around $200 per month.
- On homes in a gated community that's usually less, around $100 per home, but can go up to $300 depending on amenities.
12) WHAT ARE THE CONVERSIONS FROM METERS AND HECTARES TO FEET AND HECTARES?
- 1 square meter is equal to 10,763 square feet.
- One Hectare is equal to 2.47 Acres.
- One hectare is equal to 107,639.10 square feet.
- One hectare is equal to 10,000 square meters.
- 1 acre is equal to 4,046.85 Square Meters.
- 1 acre equals 43,560 square feet.
- 1 acre is equal to 0.4046 Hectares.
13) PREPARE AND MAKE YOUR HOME IRRESISTIBLE
- Hire a cleaning service . An immaculately clean home is essential, dirt will turn a prospect off faster than anything else.
- Pay attention to the outside of the place . Mow the lawn, and make sure toys and yard equipment are put away.
- Serve cookies, coffee and soft drinks, this adds a touch of cozy welcome . But make sure the kitchen has been cleaned, use disposable cups so the sink doesn't have dirty items.
- Lock up your valuables, jewelry, and money . Even if the real estate salesperson is present during the property presentation day, it is impossible to be aware of everyone at all times.
- Turn on all the lights. Even in the daytime, the incandescent lights add sparkle to the place.
- Send your pets to a neighbor or let them outside. If that's not possible, cage them or leave them inside a room (a basement or bathroom), and let the seller know where to find them.
- Of space . It's awkward for potential buyers to see the house, search your closets, and voice their opinions if you're around.
- Add a splash of color . Use fresh or silk flowers to add life and color to main rooms. Throw a colorful blanket on top of a sofa in a boring room.
- Make the feeling of luxury in bathrooms . Put away the old towels and toothbrushes. When shoppers walk into your bathroom, they should feel pampered. Add a new shower curtain, clean towels and luxury guest soaps.
- Smells good? Set out potpourri or scent products to create a homey feel. Make sure there are no odors from cigarettes or pets.
- Help them imagine that they live there. Set the table with pretty plates and candles, and create settings throughout the house to help future buyers picture themselves living there. For example, placing a chess game on a table.
- Beautify the entrance. Buy a rug with a good style or with a welcome phrase.
- Make rooms feel bigger. Take one or two main pieces of furniture from each room to create a feeling of spaciousness.
- Accentuate corner spaces . Store kitchen appliances and bathroom personal items to give the illusion of more counter space.
- Depersonalize the rooms. Store family photos, keepsakes, and distinctive artwork.
- The grass must shine. Turn on the sprinklers for 30 minutes to give the lawn a shine.
14) WHAT ARE THE INCENTIVES TO INVEST IN CASCO ANTIGUO (CASCO VIEJO)?
- A system of interest-bearing mortgage loans is established for the restoration of real estate in the San Felipe area.
- Owners of properties in Casco Antiguo will be exempt from the payment of Real Estate Tax due at the time of transfer (sale) of the property.
- The benefits derived from the transfer of real estate will be exempt from the payment of Income Tax.
- The land and the improvements of restored buildings will be exempt from the payment of the Property Tax for a period of thirty (30) years counted from the restoration of the property.
- The first sale or sales that take place after the completion of the restoration of the building will be exempt from the property transaction tax.
- The profits generated by commercial, professional or industrial activities that are carried out and their effects in the Casco Antiguo, are exempt from Income Tax for ten (10) years counted from the restoration of the occupied assets.
- The equipment and materials used in the construction, restoration and equipment will be exempt from import duties.
- Tenants of properties in Casco Antiguo have their Income Tax deducted from rental rates for a period of five (5) years.
- Buildings intended for public parking will be exempt from Income Tax for a period of ten (10) years.
- The compensation payment is established for the tenants of apartments in the Casco Antiguo who must vacate the property for a restoration project. The developer of the restoration project will receive a transferable tax credit with a value equivalent to the payment made.
- In order to benefit from these incentives, the investments must be made during the ten (10) years from the creation of the Decree-Law, that is, until August 2007.
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Excelente servicio!! Nos sentimos muy seguros y acompañados durante todo el proceso, desde que iniciamos la búsqueda hasta que nos entregaron las llaves. Gabriel Illescas estuvo siempre pendiente de cada detalle, asesorándonos con mucha paciencia, amabilidad y empatía. Recomendados 100%”
Excelente la atención y el profesionalismo de la Agencia, y particularmente de Heidi. Muy atenta a mis requerimientos y amable.”
Luis Aguilar, es un excelente profesional. Es responsable, respetuoso, proactivo, con la mejor disposición de trabajar en equipo.
En medio de las dicultades que nadie se imagina que se hallaran en la venta de una casa, Luis siempre puso toda su empeño para brindar solución a cada inconveniente.
Realmente está comprometido con su trabajo. Fue un gran privilegio contar con su asesoramiento.
Gabriel y Karen un excelente team. Fueron muy profesionales, conocedor del mercado inmobiliario, dedicado y siempre atendiendo nuestros requerimientos hasta el final. Estamos muy agradecidos por todo el apoyo. Los recomiendo con los ojos cerrados.”