Renting vs. Buying in Panama: How to make the best real estate choice

Jul 2, 2018 | Investing in Panama, Moving to Panama, Panama Real Estate

If you’re planning on relocating to Panama, whether for a short or long period, you’ll need to decide whether you want to rent or buy Panama real estate. Both options have a lot to offer, and both can be financially beneficial depending on your lifestyle and circumstances. If you’re looking to rent or buy in Panama, you’ll need to do some due diligence first. The Real Estate market in Panama is diverse and has an abundance of new properties, both in the cities and the suburbs. From luxury skyscraper apartments, beach houses, estates, family homes, and suburban condos, Panama has it all, to buy or rent. Here are some quick tips on how whether you should rent or buy in Panama.

Why rent real estate in Panama?

There’s a stigma often attributed to renting that says it’s only good for short-term stays, and that it’s not cost-effective. While in some cases this can be true, it’s certainly not an absolute, especially in Panama. Renting real estate in Panama is big amongst expats, and the market is hot in practically all areas of the country. In fact, even if your plan is to buy real estate, we recommend renting first to get a feel for your area and the lifestyle of living in Panama as a whole. As a foreign tourist or resident, you can still sign local leases, and owners are often very open about lease lengths to better suit your needs.

What types of rentals are out there?

If you’re looking to rent real estate in Panama, you first need to look at your budget. Panama has a very affordable real estate rental market, but prices can be on the higher side in the more central areas of Panama City as well as popular oceanfront suburbs and developments. A typical rental in the nicer parts of Panama City will run you anywhere from $1,200 up to $4,000. The lower priced rentals are mostly in smaller, older buildings, while the pricier rentals are in luxury condo towers with many modern amenities and services.

Lease terms and rules for renting

Most rentals are furnished, and leases are typically set for one year. You can rent month-to-month in many parts of town for a premium price, but note that Panama has a law forbidding rentals for shorter than 45 days. Make sure your lease is notarized, and check with a skilled, experienced attorney before making any contractual commitments.

Why buy real estate in Panama?

Buying real estate in Panama is huge these days, both as an investment and as a living solution for expats. Prices for new real estate in Panama have been on a steady rise for the past few years, but there are still some great deals out there when compared to comparable cities in the Americas. On the positive side, the rise in Prices is also indicative of a flourishing market, and the apartment or house you buy now may be worth significantly more in the near future. Buying real estate in Panama can give you equity, an investment with good growth potential, a place to live, and even a significant tax break.

The incredible tax benefits of buying Real Estate in Panama

As a foreigner, when you buy new real estate in Panama you get a 20-year exemption on Real Estate taxes for all assets of the enterprise. This will save you thousands each year, and is an incredible incentive to buy. You can also transfer this exemption if you sell before the 20-year period is up, and simply need to deduct the years spent. Many expats decide to buy real estate flat out, without a mortgage, however local banks do offer great financing options, if you are a legal resident of the country and can provide good credit references.

In Panama real estate pricing, location is everything

Again, when compared to comparable cities in the Americas, Panama’s real estate prices are relatively cheap. This, however, can change drastically depending on your location. Luxury apartment and home construction is booming right now in Panama, and these properties are designed to draw a premium. This premium, however, is often much more affordable when you consider tax breaks, size, and amenities.

In Panama City $400,000 can get you a 3-bedroom luxury apartment with ocean views and double the space of anything you can find in major US cities. If you’re looking for a smaller investment, you can still find apartments and houses for around $100,000, but expect to be a outside of city centers. There are also usually fewer added amenities such as pools, spas, daycare, and concierge service, which are the hallmark of many of Panama’s new luxury developments.


Manoj Chatlani

Manoj Chatlani

Manoj Chatlani is a Senior Partner at POLS Attorneys, a full-service law firm in Panama City, Panama. Specializing in Panama immigration law, relocation services as well as real estate law and corporate law. POLS Attorneys offers clients a streamlined solution to all their Panama legal needs. Manoj is a licensed Panamanian lawyer and holds a law degree from USMA, a Masters degree in Communication Law and Panama Tax law.

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