Property Purchase in Panama

Many come here to Panama on property purchase
vacation to look around and decide to purchase property.
If you are one of those that have worked through the property search and are ready to “pull the trigger” on your own little piece of paradise here is a quick break down of the process. I have bought and sold a number of properties here over the years and though it changes a little bit each time, of all the bureaucratic government processes, land transactions appear to be one process that maintains the same basic formula from agreement to deed transfer. Thank god all mighty, because every other law, rule and regulation in Panama changes more than the wind direction.

In my case, titled land is all I have purchased, right of possession land is another story. I’m not giving legal advice here and not going to detail everything, there are plenty of attorneys for that. This is just a quick break down of what actually happens to make the land transfer ownership after the contracts are signed. Each persons language abilities will determine how involved they would like to be in this process.

When I first arrived in Panama I spoke very little spanish. I had to have an attorney to navigate the entire process from start to finish, I was helpless. Most foreigners are in this powerless position upon arrival, depending on and trusting some one else to do everything. After years of being here, learning a good portion of the language and learning how things work I am proud to say that I can do a lot of the “running around” involved in a real estate transaction. Attorneys fees and valuable time are saved! At my last property sell the attorney that I and the buyer used was impressed that I showed up at the closing with all my documents in order. “How did you get all these?” She asked. Feels good to be able to move around in the system. This gringo has learned to get things done!

A quick side note. If you are going to live, work or retire here. Do your best to learn the language. Of course it is difficult, but over time you will start to get it. There are spanish language schools all over the country. The spanish immersion program at the Ileri Institute I attended years ago in Panama City was more inexpensive for a 4 hour a day 5 day a week spanish course and comfortable lodging (with a Panamanian family including breakfast, dinner and laundry service) then just the expense of staying in a decent hotel. The family treated me as if I were one of them, it was a great time.

It is very empowering, liberating and fun having the ability to communicate with the Panamanians. Plus it makes everything about living here easier, including buying and selling property.

So here we go, this is more or less what I went through on my last real estate transaction. Before we got to the process listed below I had already segregated a parcel from a larger finca or titled property which required a survey approved and accepted by MIVI (the national housing ministry). The surveyor will handle this process for a small additional fee on top of the actual surveying of the land. From surveying to final approval by MIVI the process took around a month.

1 -First the buyer and I signed a promise to purchase agreement at the local attorneys office.

2 – I went to ANATI  Autoridad Nacional de Administración de Tierras or in english National Authority for Land Administration for a “Consulta de Finca” which is basically a print out with the finca number and it’s value. Whenever the new owner receives the property deed at the end of the purchasing process the deed should be brought back to this office to “Actualizar la Finca” or Update the Finca. This is not done automatically when the deed is created by the Public Registry.

2 – Next I delivered the Consulta de Finca along with a USB Memory stick to the Notario Publico  or Public Notary. The Notary calculates the sales tax and creates a document with a copy on the USB that is then taken to the Ministerio de Economia y Finanzas or Ministry of Economy and Finance (tax office) to pay the sales tax.

The notary system here in Panama is very different than in the United States. For any agreement between two parties to be enforceable here in Panama it needs to be signed in front of and witnessed by the notary or it’s agents. In most provinces in Panama (with the exception of Panama City where there are many notary offices) there is only one Notario Publico in the capital city of that province. For example in Herrera the notary office is in Chitre, in Los Santos Province it’s in Las Tablas. The notary is almost always busy with lines of people waiting for a notary signature and stamp, so get there early. If you have trouble finding it ask anyone in town, chances are they have been there multiple times in their lives. The Notary office is a part of life here in Panama. 

3 – At Economia y Finanzas they calculate what taxes need to be paid allowing the property to be clear for title transfer. Once taxes are paid they will give you a Paz y Salvo or good standing receipt for the property. If the property is in the name of a corporation or foundation the seller will also need a Paz y Salvo proving that the corporate entity is free of encumbrances and liens.

4 – A Paz y Salvo will also be needed from IDAAN (Instituto de Acueductos y Alcantarillados Nacionales), the National Water Authority, proving that no payments are owed for water service to the property.

5 – Once I had all these documents I went back to the Public Notary to deliver the documents and signed the contract with the buyer in front of a Notary agent as witness. The Notary then creates the deed from the contract information and other paperwork I delivered. Once the deed is finished it’s sent to the Registro Público de Panamá or Public Registry for deed registration in the new owners name.

I have probably left out some minor details that an attorney could fill in, but that is basically the process of purchasing or selling land here.

Welcome to Panama!

Now that you have purchased property on to the hard part, trying to build something!

Charlie