With a simple process, aggressive prices and an abundance of available properties, now is the time to purchase Panama property. Throughout the nine provinces, Panama property offers a wide selection in a number of scenic settings, whether in the country, the city, the mountains or at the beach. In addition there are a number of tax benefits available to those buying new Panama property.



Panama property taxes

The property taxes in Panama are based on a sliding scale with lower-cost properties paying less and more expensive properties shouldering a heavier burden. Panama Properties that have a registered value of $30,000 or less don't pay property tax. Panama Properties are taxed 1.75% between $30,000 and $50,000; a tax of 1.95% is levied for property values between $50,000 and $75,000; and 2.1% is charged for any property value above $75,000.

For construction permits issued after Sept. 1, 2006 these exemptions apply:

o Value up to $100,000: 15-year exemption

o Value from $100,000 to $250,000: 10-year exemption

o Value over $250,000: five-year exemption

Basic Real Estate Laws and How They Affect Buyers

After agreeing on a price for Panama property, the buyer will start the purchase process by giving the seller a down payment. Typically a cash payment, this signifies the buyers interest and intent to complete the purchase of the property. When the deal is completed or if the buyer backs out of the deal, the down payment belongs to the seller. If the seller chooses to back out of the deal, he not only loses the down payment but an additional amount equal to the down payment. This penalty discourages sellers from trying to find a better deal after agreeing with a buyer.

The Promise to Purchase agreement is critical to the entire process. This contract includes the legal description of both the transaction being executed and the parties involved. All necessary information is included in this document including the property description, the terms of the deal and the legal identification of both the buyer and seller. This document is later conveyed to the escrow company and both the information for the title the names for the disbursements are taken from its pages.

Types of properties

Panama property is broken down into two different types: titled land and "right to possess". Understanding these two types of property are critical to understanding exactly what you are buying.

Titled land

Titled land is the term for all properties that are recorded in the Public Registry. A formal history of ownership is available and any liens or other claims against the property are included. Like properties in the US, Panama property that is titled cannot be sold without a clear title, making the title search an important step in the process. It is wise to note that you can purchase title insurance and it is as strongly suggested for real estate in Panama as it is for real estate in the United States.

"Right to possess" property was established by the Panamanian government in 1971 to encourage inhabitation of unclaimed, untitled land. While "squatter's rights" haven't been used in the US for quite some time, it is still valid in Panama. For "right to possess" Panama property, it is very important to have a good attorney as legal issues could arise if proper procedures have not been followed by the previous owners. While this is concept is somewhat strange to Americans, don't be scared away if the property you want is 'right to possess". It is important that you and your attorney follow proper procedure and you can still securely get a great deal on your new real estate.

Conclusion

No matter whether you have ever bought property before or not, purchasing Panama property can be a relatively simple process. Make sure that your attorney is diligent to explain things to you and help you oversee the process; being mindful of the steps involved will help you to ensure there are no problems. After you have finished, you will likely say that purchasing Panama property was a very good experience.