What taxes does a non-resident foreigner pay when selling an apartment in Panama?

A non-resident foreigner pays the same taxes as a resident when selling, with particularities on withholding. The three main taxes are: (1) Real Estate Transfer Tax (ITBI) of 2% on the higher of the agreed price or cadastral value — paid by the seller as the obligor; (2) Income tax on capital gains — special regime of 10% on the gain (sale price minus tax basis: purchase price + documented improvements + acquisition costs); (3) Mandatory 3% withholding on the sale price applied by the buyer at payment, under Law 8 of 2010 and ANIP rules — this withholding is an advance against the non-resident seller's income tax. If the final calculated income tax is higher than the 3% withheld, the seller pays the difference; if lower, the seller may request a refund. Typical seller closing costs: 2-4% of the price across notary, attorney, clearance certificates, and certifications. Total typical tax burden for a non-resident foreigner: 5-8% of the sale price plus income tax on actual gain.

How does the 3% withholding on the sale price work, and can I avoid it?

The 3% withholding is governed primarily by the Tax Code and regulated by ANIP (formerly DGI). It works as follows: at the public deed, the buyer automatically withholds 3% of the sale price and deposits it directly with ANIP using Form 106 within 10 business days. The seller receives only 97% of the price. This withholding applies even if the transaction is at a loss or final income tax falls below 3%. To recover the excess withheld (if calculated income tax on gain is below 3% of price), the seller must file a sworn declaration with ANIP requesting a refund — a process that typically takes 6-12 months. As a non-resident foreigner, you cannot avoid it. The only way to bypass the 3% withholding is to have Panamanian tax residency (permanent residency + registered tax domicile + filing taxes as a resident). For recurring property sales by the same seller (more than 10 per year or habitual activity), a different regime applies; consult a specialized accountant.

Can I repatriate the sale proceeds abroad without restrictions in Panama?

Panama has free convertibility and capital mobility — no currency controls or structural restrictions on repatriating funds. The foreign seller may transfer 100% of the net proceeds (after taxes and withholding) abroad without special authorizations. However, formal obligations apply: (1) Source of Funds Declaration with the executing bank under Anti-Money Laundering (AML) rules — the bank requests source documentation: sale deed, clearance certificates, ANIP withholding receipt, seller identification; (2) If the transfer exceeds $10,000 (essentially every real estate sale), the bank reports to the Superintendence of Banks and the UAF (Financial Analysis Unit) — automatic reporting, not blocking; (3) Financial Transfer Tax (if it applies at the destination bank) — destination bank's cost, not Panama's; (4) Destination country rules — the U.S., Canada, EU, and some Latin American countries require foreign income reporting and may apply additional taxes per treaty. Panama has double-taxation treaties with few countries — most foreigners pay tax on both sides with a partial foreign tax credit. Consult an accountant in your destination country before planning the sale.

What immigration or residency requirements do I need to sell my Panama apartment?

None. A non-resident foreigner can sell a Panama apartment without residency, visa, or local ID — just a valid passport. Panamanian law does not discriminate between resident and non-resident on property or sale rights. What does affect taxation is fiscal residency status: non-residents pay through the 3% withholding regime + income tax adjustment; Panamanian fiscal residents pay through the general regime (income tax on gain, no mandatory withholding). Practical requirements to sell as a non-resident: (1) Valid passport; (2) Power of attorney if you're not in Panama — you grant power to an attorney or representative to sign the sale deed for you; (3) Taxpayer ID (RUC) at ANIP to generate fiscal clearance — processed in 1-2 days with passport; (4) Panamanian bank account (yours or your attorney's) to receive the sale price; (5) Spouse identification if the property is under marital community per the home country's law — some Panamanian banks request spousal consent. You do not have to travel to Panama — the sale can be 100% remote with an apostilled power of attorney from the country of residence.

Do I need an authorized broker or local realtor to sell as a non-resident foreigner?

Legally, hiring an ACOBIR-licensed real estate broker is not required. The seller can list directly on portals (Encuentra24, InmoPanama), contact buyers, and close with an attorney + notary. In practice, however, hiring a broker is highly advisable for several reasons: (1) Market access — ACOBIR brokers share an MLS with 500+ active agents; without a broker, you reach a very limited audience; (2) Buyer screening — a broker filters serious buyers vs. curious shoppers, saving the remote seller time; (3) Negotiation — an experienced broker negotiates better than a seller who isn't in-country; (4) Coordinating due diligence, inspections, and closing from Panama while you're abroad; (5) List-price advice — brokers have access to recent comps a non-resident cannot easily reach. Typical commission in Panama: 5% + ITBMS (sales tax) of the price, paid by the seller at closing. For apartments above $300,000, some brokers negotiate a tiered 3-5% commission. Verify that the broker has a current ACOBIR license (panamaacobir.org) — informal unlicensed brokers can create legal issues at closing. For cross-selling to other foreigners, brokers who specialize in the international market charge a premium but reach a global audience.

How long does it take to sell a Panama apartment as a non-resident foreigner?

Total time from market launch to deed and funds in account ranges from 3 to 9 months depending on zone, price, and property condition. Typical breakdown: Market launch: week 0 — portal listing, professional photography, MLS. Sale in liquid premium zones (Punta Pacifica, Costa del Este, San Francisco): 45-120 days of exposure until accepting a reasonable offer. Sale in secondary zones: 90-240 days. Purchase promise and buyer's due diligence: 30-45 days. Public deed and registration: 15-30 days. Net proceeds received (after 3% ANIP withholding and payments): on deed day. International wire: 3-10 business days after AML declaration to the bank. Typical premium-zone total: 4-5 months. Typical secondary-zone total: 7-9 months. For non-resident foreigners not in Panama, add 2-4 weeks for coordinating the apostilled power of attorney, representative travel, and synchronized signing. To sell faster, strategies include: list 5-10% below comps (sells in 60-90 days), offer seller financing (attracts buyers without bank credit), trade-in with a developer (see permuta section). Also see how to accelerate the sale in [what to do if your apartment isn't selling](/blog/que-hacer-si-su-apartamento-no-se-vende-panama-2026).

Selling a Panama Apartment as a Non-Resident Foreigner 2026

Last updated: April 24, 2026

Foreigners account for roughly 30-40% of active owners in premium zones such as Punta Pacifica, Costa del Este, and Marbella. When the time comes to sell — whether for portfolio rotation, life changes, or capital gains realization — the rules largely match those for residents, with key particularities: the 3% withholding under Law 8 of 2010, fund repatriation logistics, and frequently a remote operation from your country of residence.

This guide covers the full sale process as a non-resident foreigner: applicable taxes, automatic withholding, buyer due diligence, representation via power of attorney, fund repatriation, and common mistakes. It complements how to sell an apartment in Panama 2026 (focused on the resident seller) with non-resident specifics.

Before listing, estimate value with PanamaEstimate and model net return with the Yield Calculator. If you're weighing whether to sell now or wait, read buy now or wait Panama 2026.

Legal Framework: Law 8 of 2010 and Non-Resident Tax Regime

The primary regulatory framework for non-resident real estate transactions in Panama is:

Law 8 of 2010 — Tax regime applicable to non-resident persons. Sets the source-withholding principle for Panama-source income.
Panama Tax Code — General regulation of ITBI, income tax, and the withholding regime.
ANIP (formerly DGI) resolutions — Operational procedures for filings, payments, and clearance certificates.
Law 47 of 1956 — Horizontal property regime (HOA dues, clearance).
AML laws — Mandatory bank reports when transferring funds.

Key concept: Panama-source income

The sale of a property located in Panama generates Panama-source income for the seller, regardless of country of residence. This triggers the 3% withholding regime + final income tax adjustment.

A non-resident does not pay tax in Panama on foreign-source income (interest, dividends, salaries earned abroad). Only the gain and value of the Panamanian property sale are taxed.

The Three Main Taxes

1. Real Estate Transfer Tax (ITBI) — 2%

Base: the higher of the agreed deed price and the cadastral value.
Obligor: the seller.
Paid at the public deed (corresponding ANIP form).
Sample calculation: apartment sold for $280,000 with cadastral value $240,000 → ITBI on $280,000 = $5,600.

2. Income Tax — Special 10% regime on the gain

Base: capital gain = sale price - tax basis.
Tax basis = original purchase price + documented improvements + acquisition costs (notary, attorney, appraisals).
Rate: 10% on the gain.
Sample calculation: 2018 purchase at $210,000, $15,000 in documented improvements, $4,000 in acquisition costs → tax basis $229,000. 2026 sale at $280,000. Gain: $51,000. Income tax: $5,100.

3. 3% withholding on sale price

Base: agreed deed price.
Obligor to withhold: the buyer.
Timing: at deed signing and price payment.
Deposited at ANIP via Form 106 within 10 business days afterward.
An advance against income tax — if final income tax is higher, the seller pays the difference; if lower, the seller requests a refund.
Sample calculation: $280,000 price → $8,400 withheld.

Tax burden summary

Item	%	On	Example $280k, $51k gain
ITBI	2%	Price (greater of agreed and cadastral)	$5,600
Income tax special regime	10%	Gain	$5,100
3% withholding	3%	Agreed price	$8,400
Withholding vs. final income tax	-	-	Withheld ($8,400) > Income tax ($5,100) → Refund request $3,300
Effective total tax	-	-	$10,700 (ITBI + income tax) = 3.8% of price

Additional seller closing costs

Notary and recording: 0.5-1% of price.
Seller's attorney: $1,000-$3,000 fixed or 0.5-1%.
Brokerage commission: 5% + ITBMS = ~5.35% effective.
Clearance certificates: $100-$300.
Mortgage cancellation if applicable: $200-$500 in bank fees.

Total seller closing costs: ~6-8% of price.

Typical total taxes + costs for non-resident foreigner: 9-12% of price + tax on gain.

Step-by-Step Sale Process (Non-Resident Foreigner)

Phase 1 — Preparation (2-4 weeks)

Value estimate with PanamaEstimate + broker comps.
Select an ACOBIR-licensed real estate broker. Verify the license at panamaacobir.org.
Obtain current clearance certificates:
- Public Registry certificate (lien clearance).
- ANIP clearance (ITBI).
- Condo HOA clearance.
- IDAAN, ENSA/Edemet clearances.
Hire a local Panamanian real estate attorney — critical if the seller is not in Panama.
Power of attorney if you won't be in Panama — grant power to attorney or representative. Document apostilled in country of origin.
Taxpayer ID (RUC) at ANIP — 1-2 days with passport.

Phase 2 — Marketing and offer (1-6 months)

Professional photography and virtual tour ($300-$800).
Portal listings (Encuentra24, InmoPanama) and ACOBIR MLS.
Showings managed by the broker while you're abroad.
Receive written formal offers.
Price and terms negotiation via broker.
Final offer acceptance.

Phase 3 — Purchase promise and due diligence (30-45 days)

Promise signing by power of attorney. Earnest money 5-10% deposited by buyer.
Buyer due diligence — your attorney coordinates deliveries.
Resolution of findings if minor debts or observations arise.
Deed preparation by notary.

Phase 4 — Public deed and closing (15-30 days)

Deed signing before notary — your representative signs with your power.
Price payment:
- Buyer pays 97% to the seller's account (your own or attorney's).
- Buyer withholds 3% and deposits at ANIP (Form 106).
ITBI payment by the seller (2% of price).
Final HOA and utilities settlement through deed date.
Key handover to buyer.
Recording at Public Registry — 2-4 weeks.

Phase 5 — Fund repatriation (1-3 weeks)

AML declaration to the Panamanian bank:
- Recorded sale deed.
- ANIP withholding receipt.
- ITBI clearance.
- Seller identification and destination account.
International wire to the destination country.
Reporting to destination country authorities (if applicable, e.g., FBAR/FinCEN in the U.S., CRS in the EU).

Phase 6 — Post-closing adjustments (6-12 months)

Final income tax sworn declaration with ANIP.
Refund request if 3% withholding exceeds calculated income tax (6-12 month process).
Accounting close of the operation with home-country accountant.

Typical total time: 6-10 months from listing to funds in destination account.

Power of Attorney: How to Sell Without Being in Panama

The power of attorney is the key document enabling remote sale. Recommended structure:

Essential power-of-attorney content

Grantor identification (you): full name, passport, address abroad.
Attorney-in-fact identification: trusted attorney or representative in Panama.
Express powers:
- Sign the purchase promise.
- Sign the public sale deed.
- Receive the price on the grantor's behalf.
- Pay closing taxes and costs.
- Cancel mortgage if applicable.
- Sign clearances and tax filings.
- Transfer funds to grantor's account.
Specific property identification (registry folio, address).
Minimum acceptable price (optional, for protection).
Validity period (typical 12-24 months, extendable).

Formalization procedure

Drafting by Panamanian attorney.
Signing by grantor before a notary public in country of residence.
Apostille (if the country is a Hague Convention party) or consular legalization (if not).
Send to Panama by international mail or digital with e-apostille where applicable.
Protocolization before a Panamanian notary public.
Recording at the Public Registry's Powers Section if the power requires it.

Total power-of-attorney cost: $300-$800 (origin-country notary + apostille + shipping + Panama protocolization).

Specific Structures for Non-Residents

Sale via Panamanian corporation

Many foreigners hold the property under a Panamanian corporation. In that case:

The legal seller is the corporation, not the individual.
The corporation pays ITBI and income tax.
Distributing funds from the corporation to the foreign shareholder as a dividend triggers dividend tax.
Alternative: sell the corporation's shares instead of the property. May have tax advantages but requires more complex buyer due diligence.

See corporation vs. personal name Panama 2026.

Sale with seller financing

Strategy used by foreign sellers when the buyer doesn't qualify for Panamanian bank financing:

Seller receives 30-50% at closing + balance in installments over 2-7 years.
A mortgage in favor of the seller is recorded on the property.
Allows faster sale and can sustain list price.
Risk: managing remote installment collection.

Trade-in with a developer

If you're buying new construction in Panama, some developers accept a trade-in (partial exchange) of the existing apartment. Avoids double brokerage costs. See real estate exchange Panama 2026.

Fund Repatriation: Regulatory Framework

Panama: free mobility

Panama has:

Dollarization — local currency is USD, no FX risk.
No exchange controls — full convertibility.
No structural restrictions on capital movement.

You can transfer 100% of net proceeds abroad without special authorizations.

Mandatory reporting

Though there's no restriction, there is reporting:

Source of Funds Declaration to the executing bank (AML).
Reporting to Superintendence of Banks and UAF for transactions over $10,000.
Destination declaration if the recipient is not your own account.

Destination country rules

United States: FBAR report (FinCEN 114) if total foreign accounts exceed $10,000 at any point in the year. Form 8938 (FATCA). Federal capital gains tax with foreign tax credit for Panama income tax paid (where treaty applies).
Canada: T1135 (Foreign Income Verification Statement). Tax on gain.
EU: Member-state rules. Common Reporting Standard (CRS) active between Panama and the EU.
Latin America: varies by country. Colombia, Argentina, and Mexico have information-exchange agreements with Panama.

Consult an accountant in your country before structuring. Some double taxation is avoided via foreign tax credit; some is additive.

Full Case Study

Profile: An Argentine investor bought an apartment in San Francisco in 2018 for $230,000. Documented $18,000 in improvements in 2020. Original acquisition costs $5,000. Sells in 2026 for $310,000.

Tax calculation

Tax basis: 230,000 + 18,000 + 5,000 = $253,000.
Sale price: $310,000.
Capital gain: $57,000.
Income tax 10%: $5,700.
ITBI 2% on $310,000: $6,200.
3% withholding on $310,000: $9,300.

Seller closing costs

Brokerage 5% + ITBMS 7%: $16,585.
Attorney: $2,000.
Clearance certificates: $200.
Total costs: $18,785.

Net proceeds to seller

Price: $310,000.
Less ITBI: -$6,200.
Less 3% withholding: -$9,300.
Less closing costs: -$18,785.
Net received in account: $275,715.

Post-closing income tax adjustment

Calculated income tax: $5,700.
Withholding deposited: $9,300.
Refund request: $3,600 (6-12 month process).

Final net after adjustment

$275,715 + $3,600 = $279,315 net after 12 months.

Total net gain for the seller

Final net: $279,315.
Less original tax basis: $253,000.
Final net gain: $26,315 on $253,000 invested = 10.4% total over 8 years, ~1.25% net annualized (excluding rental yield during the holding period).

This calculation excludes rent collected during 8 years of holding, which typically adds 35-50% in additional total return in zones like San Francisco. A complete ROI calculation should combine yield + net appreciation.

Common Mistakes Non-Resident Foreigners Make When Selling

Not documenting historical improvements. Without documentation, they don't reduce tax basis and increase income tax. Save invoices from purchase day onward.
Ignoring the 3% withholding. Some sellers don't realize they'll receive only 97% at closing and miscalculate net proceeds.
Hiring only a broker without an attorney. The attorney protects your legal interests; the broker optimizes commission.
Poorly drafted power of attorney. Without sufficient express powers, the representative can't sign or collect.
Not apostilling the power. Without apostille, it's invalid in Panama.
Listing far above market. Non-resident foreigners tend to overvalue. Use real comps.
Not estimating tax impact in country of origin. Additional taxes may apply in the U.S., Canada, or the EU.
Selling furnished without documentation. Furnished increases recordable price but also ITBI and withholding.
Letting clearance certificates expire. An expired clearance delays the deed by 15-30 days.
Skipping the buyer's technical inspection. Refusing inspection drives away serious buyers.
Wiring funds without AML declaration. The bank blocks until documentation is received.
Forgetting to dissolve the Panamanian corporation (if applicable) after the sale if you won't use it. It generates annual costs (single-tax fee, resident agent).

When to Sell vs. Wait

Non-resident foreigner's strategic decision:

Indicators to sell now

Mature zone with projected appreciation under 5% annually.
High accumulated appreciation during your holding period (40%+).
Building age approaching 12-15 years with oversupply of new projects.
Life-plan change (consolidating portfolio in another country).
Low mortgage rates in Panama attracting buyers.
Favorable exchange rate when repatriating to country of residence.

Indicators to wait

Zone with appreciation driver (Metro Line 3, urban reconversion).
Building under 10 years old in premium zone.
Strong rental yield generating sufficient cash flow.
Plans to use the property (second residence, retirement in Panama).
Currently oversupplied market that will normalize in 1-2 years.

Model with the Yield Calculator.

Sources and Regulations

Law 8 of 2010 — Tax regime applicable to non-residents in Panama.
Panama Tax Code — ITBI, income tax, and withholding regime.
ANIP resolutions (National Public Revenue Authority) — operational procedures, Form 106 and related.
Law 47 of 1956 — Horizontal property regime.
Law 23 of 2015 and amendments — Anti-Money Laundering.
Hague Apostille Convention — international validation of powers.
Panama CRS (Common Reporting Standard) — fiscal information exchange with member countries.
Superintendence of Banks of Panama (SBP) — international transfer regulation.

This article is general reference. Taxation when selling as a non-resident foreigner has nuances by country of residence, ownership structure, and specific tax regime. Consult a Panamanian real estate accountant + a home-country accountant before signing.

Are you a foreigner who wants to sell your Panama apartment? We coordinate licensed broker, real estate attorney, power of attorney, due diligence, and fund repatriation. 100% remote operation possible. Ask Alma with zone, tentative price, and country of residence.