One of the first things you should do before you buy is to find a good real estate agent. This agent must be a bonded, licensed member of the Panamanian Association of Real Estate Agents and Promoters. In addition to being licensed and bonded, they should also be a member of the ACOBIR (Panamanian Association of Real Estate Brokers and Developers) or UNACOBIN real estate unions. These associations monitor real estate brokers.
Not only must you use a real estate broker who is licensed and a member of one of the real estate unions, but you must find a good lawyer and establish a relationship with this lawyer. Although you don’t have to be able to speak Spanish to live here, it would be a good idea to learn to speak Spanish since you are intending on living in Panama anyway. Why not learn the language of the country you intend to live in? Not learning a foreign language in a country that speaks that language will always leave you on the outside of that culture, looking in.
As in many places, you must know the rules before you buy. It will be vital to know that in Panama, some real estate titles will prove ownership; others may be actually a long term licence. Once you have brought a property in Panama, you will receive ownership and proof of that ownership is a deed called “Titled Property” or “Propiedad Titulada”. By way of this document, it is the legal proof that you both control the property and possess ownership of the property.
A real estate deal in Panama which involves a “Derechos Posesorios” title, or “Rights of Possession” will result in you not owning what you think you are buying. The “Rights of Possession” deed allows you to use the land in ways that are specified in this deed but you will not actually “own” the land. It will be owned by a national or local government entity.
This is the reason that you should have both a good relationship with a Panamanian lawyer and a few good real estate brokers who are members of the Panamanian Association of Real Estate Agents and Promoters and either the associations of ACOBIR or UNACOBIN. It’s always best to have title insurance which is cheap, no how much you have to pay. As with any deal, it is always a “buyer beware” before you sign on any dotted line. It is best to be safe rather than sorry later.
Benefits of retiring in Panama include the fact that you will not have to pay taxes on income you earn outside of Panama. Also, you will be exempt from paying property taxes for up to 20 years if you purchase your home using the right guidance. This will help you save your retirement dollars by quite a lot.
The government of Panama encourages retirement in Panama by way of a variety of discounts for people retiring in Panama. They have a generous program of discounts, known as the “Pensionado Program” for seniors which include:
- 50% discount for regular ticket prices for entertainment such as movies, theaters, sporting events, etc.
- 50% discount for the price of mid-week hotel stays
- 50% discount for the cost of closing your home mortgage
- 30% discount for public transport costs
- 25% discount for domestic air tickets
- 25% restaurants’ discount
- 20% discount for professional and home repair fees
- 20% discount for Doctor’s care
- 5% discount for hospital bills if you are without medical insurance
- 15% discount for the cost of eye exams and dental fees
- 10% discount for prescription drugs
The reasons for these discounts is to encourage people to retire in Panama and it is always a method for the government to stimulate the economy of Panama by a variety of means. Smart move.
These are some of the basic rules of buying real estate when you want to purchase property and retire in Panama.
