How to Buy Real Estate in Panama as a US Citizen — Step-by-Step 2026

Buying an apartment or a house in Panama as a US citizen is a seven-step process that typically takes 30 to 90 days end-to-end once the local bank account is open, with closing costs of 4% to 6% of the price. By law, foreigners have the same real estate rights as Panamanians for urban residential property — there are no restricted zones.

Step 1: Hire a Licensed Panamanian Attorney

Law 6 of 2010 regulates real estate brokerage in Panama and requires ACOBIR licensing for brokers. Attorneys must be admitted to the Colegio Nacional de Abogados. The attorney must be independent of the seller's attorney — using the seller's lawyer is the #1 source of preventable problems for foreign buyers. Typical fees: 1% to 2% of the purchase price.

Your attorney drafts and reviews contracts, performs Public Registry due diligence, holds escrow funds, coordinates the notary, and ensures registry recording.

Step 2: Open a Panamanian Bank Account

Standard KYC documentation includes: valid US passport, a bank reference letter from your US bank, proof of funds (recent IRS returns, asset sale documentation, etc.), and a written explanation of the source and economic activity. The process typically takes 30 to 60 days.

A local account is required to wire closing funds, pay property taxes and HOA fees, and receive rental income if you plan to rent the unit.

Step 3: Property Search and Verification

Use the verified PanamaProp database (more than 500 buildings across 9 premium zones) plus an ACOBIR-licensed broker. Whether you visit in person or buy remotely, do not skip due diligence on the unit itself: a video walk-through plus a separate visit by your attorney is the minimum acceptable for remote transactions.

Benchmark price against the market with the PanamaEstimate calculator. Premium zones like Punta Pacífica and Costa del Este trade at very different price-per-square-meter ranges than the rest of the city.

Step 4: Promesa de Compraventa (Purchase Promise)

The purchase promise is a binding preliminary contract setting price, deadlines, and breach penalties. Standard structure:

• 10% earnest money deposited in your attorney's escrow account — never in the seller's account.
• 30 to 90 day window to complete due diligence and sign the deed.
• Penalty clauses: typically loss of earnest money if the buyer walks away without cause, or double return if the seller breaches.

Step 5: Due Diligence at the Public Registry

Your attorney searches the Panamanian Public Registry at registropublico.gob.pa and verifies:

• Clean title with no liens, mortgages, or unresolved encumbrances.
• Paz y salvo de inmueble — current property tax (Law 66 of 2017).
• Paz y salvo de PH — current HOA fees (Decree 31 of 2010 governs Panamanian condo law).
• MUPA-approved blueprint matching the physical unit.
• Cédula de finca (registry identifier) consistent with the deed history.

Skipping this step is one of the most expensive mistakes foreign buyers make.

Step 6: Sign the Deed (Escritura) at a Panamanian Notary

In Panama, a notary is a public officer with fe pública — substantially more authority than a US notary. The deed must be signed before a Panamanian notary; a US notary cannot validate the transfer.

If you cannot travel, grant a consular power of attorney at the Panamanian Consulate in the US so your attorney can sign the deed on your behalf. Notary fees typically run 0.5% to 1% of the price.

Step 7: Public Registry Recording

Registry recording takes 1 to 3 weeks and formalizes the transfer of ownership against third parties. Without recording, the deed is not enforceable against third parties — a critical risk if this step is skipped or delayed.

Once recorded, you receive an updated cédula de finca and the property tax record updates to your name.

Closing Costs Breakdown (4% to 6% Total)

• ITBI 2% (Impuesto de Transferencia de Bienes Inmuebles, Código Fiscal): calculated on the higher of the agreed price or cadastral value.
• Notary: 0.5% to 1%.
• Public Registry: US$100 to US$500.
• Independent attorney: 1% to 2%.
• Translation and apostille of US documents when required.

For a US$300,000 property, total closing costs typically range from US$12,000 to US$18,000. Always budget these separately from the purchase price.

IRS Compliance for US Citizens

The property itself is not directly reported to the IRS. However, US citizens have the following obligations regardless of where they live:

• Form 1040 on worldwide income — including any Panama rental income.
• FBAR (FinCEN 114) if the aggregate of all foreign bank accounts exceeds US$10,000 at any point in the year.
• Form 8938 if foreign financial assets exceed US$50,000 (single) or US$100,000 (married filing jointly).
• Rental income is US-taxable. Because there is no US-Panama income tax treaty, only a one-way foreign tax credit applies for taxes paid in Panama.

We recommend reviewing your structure with a US CPA experienced in international compliance. A dedicated FATCA + Panama real estate guide is publishing soon.

Common Mistakes to Avoid

• Using the seller's attorney as your attorney — direct conflict of interest.
• Wiring funds outside Panama or directly to the seller — always route closing funds through your attorney's escrow account.
• Skipping Public Registry verification — including the paz y salvo for both property tax and HOA.
• Not budgeting closing costs separately — 4% to 6% on top of the purchase price.
• Underestimating bank account opening time — start that process 30 to 60 days before you expect to close.

If you have already validated price, browse current apartments for sale or, if you plan to combine the purchase with residency, review the Panama Investor Visa 2026 guide.

Ready to start the buying process? Ask Alma — free initial consultation.

Sources: Executive Decrees 722 of 2020 and 197 of 2021 (Investor Visa), Law 6 of 2010 (Real Estate Brokerage / ACOBIR), Law 66 of 2017 (Property Tax), Decree 31 of 2010 (Propiedad Horizontal — Panamanian condo law), Panamanian Fiscal Code (ITBI), IRS FBAR FinCEN 114 and Form 8938 instructions, Registro Público de Panamá.