Process of Purchasing Real Estate in Panama

Process of Purchasing Real Estate in Panama

There are three types of property transfer in Panama, but we'll focus on regular Titled Property for now. Many lawsuits are filed over land use rights purchases, and this necessitates extreme care and the services of a lawyer rather than trying to sort things out on your own. If possible, stay away from these properties altogether. Squatters' rights are a third kind of property transfer, and for the purposes of this page, we shall ignore them.

Purchasing a property with a Panamanian title

The Panamanian Public Registry is in charge of recording all Panamanian real estate titles. During the course of a title inquiry or report, it is possible to check for a clear title in the Panama Public Registry. According to the Panamanian Constitution, everyone has the right to have their title and property rights safeguarded by Panamanian law. Real estate taxes apply if the registered property in Panama has a value more than $30,000, unless the property qualifies for a 20-year exemption for new property.

Here's a quick rundown of the steps involved in buying a home in Panama. This should only be attempted with the assistance of a lawyer. A real estate agent isn't a substitute for legal representation.

This agreement usually requires a 10% down payment. However, as with everything else, this may be negotiated. Promissory Purchase Agreement. You should use Spanish for this promissory purchase agreement (having an additional translation into another language as well is fine). In order to protect your purchase, the agreement should be registered on the public record in Spanish. This will keep the property out of the hands of another buyer. With a Promissory Purchase Agreement, you have time to do your due research on the property, arrange finance or payment, and set up an escrow account, amongst other things.

Using a Panamanian Title Search is quite similar to using a title search in your own country. Make sure that the selling company has a clear title to real estate that is free of any encumbrances or liens and is up to date on all of its utility bills and taxes, among other things. Make sure the survey map is correct before purchasing anything, and that the property borders match those in the register. You don't want to be buying anything that the seller doesn't have a legal right to sell, so always employ a professional surveyor to ensure everything is in order.

Purchasing a property in Panama requires the use of a purchase contract, which is recorded in the public registry. When the seller provides a clean title, the title changes hands. An escrow may then be utilized to transfer money and title simultaneously. There is a final payment made to the seller or escrow agent and the contract is recorded with the Public Registry as evidence of the transaction. In this case, because the company holds the title to the real estate, there is no transfer of the title name; instead, the shares in the corporation change hands. This is extremely frequent in Panama since the corporation owns the title to the real estate. As is customary, when a new owner of a company takes over, the current nominated directors tend to resign and be replaced. Changing the resident agent would be standard procedure. Make sure you know the yearly costs for the company before you decide whether to retain or replace the current nominated directors and registered agent. Nominations and registered agent costs are included in our $695 annual fee. You can get the company for free from certain brokers, but they charge $1400 in yearly fees, which is excellent for them but bad for you. If the company has a $300-per-year Tasa Unica fee, check to see if any past due balances exist, and make sure nominees and resident agents are current on their payments. Changing the directors and registered agent may require bringing the Tasa Unica current, which may necessitate using the previous registered agent, who may demand a hefty price if they discover you are replacing them.

Our legal team would be delighted to assist you with the whole real estate buying process. Inquire.

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