Panama's excellent property tax exemption

A good time to be building in Panama

As the Panamanian government continues to encourage growth and development, many real-time rewards are available to the foreign investor. And one of these, Panama's much vaunted 20-year property tax exemption policy, was extended. However, whilst the deadline to qualify for the new exemption was originally set at December 31st, 2009, officials recently retracted the date by six months.

Now, to qualify for the exemption your building permit has to be issued before July 1, 2009 AND the registration of improvements in the Public Registry has to be completed before December 31, 2011.

Save $10,500 a year on a $500,000 home (for 20 years)

To give you an example of the potential 20-year savings of this tax exemption consider the following:
The governmental tax rate on all residential land improvements valued over $75,000 is now 2.1%. For a home valued at $500,000 the annual tax savings will be $10,500, which equals a 20-year saving of $210,000. So, whilst the time period has been reduced by six months, the value of obtaining the transferable exemption before that date is still substantial.