Real Estate Tax Exonerations.
by: Maria Cristina Lima

If you bought Real Estate in Panama or are planning to do it, they might be tax exempted. 

Law No. 21 of 15 April 2008 establishes an extension to the Real Estate Tax exemptions regulated by Law No. 6 of 2005 that we will comment bellow. These exemptions are applied to all edifications with a construction permit obtained before 1 July 2009. The period of mentioned exemption is for twenty years.

This exemption will be applied if the construction is recorded at the Public Registry before 31 December 2011.

These twenty years start counting from the time the constructions are registered or the corresponding authorities issue the occupation permit, or whatever happens first. 

This law enacted in April 2008 was declared as a public interest law with retroactive effect.

Law 6 of 2005 established a twenty year Real Estate Tax exemption for new constructions with construction permits dated before 1st September 2006 and occupation permits before 31st August 2007. 

Furthermore, mentioned law established that Real Estates with occupation permits dated after 31st August 2007 would be exonerated as follows:

• 15 years for residential property with a value of up to USD100,000.00

• 10 years for residential property with a value of more than USD100,000.00 and less than USD250,000.00

• 5 years for residential property with a value of more than USD250,000.00

Law 21 of 15 April 2008 was published at the Digital Official Gazette No. 26020 of 15 April 2008.

MARIA CRISTINA LIMA
Lawyer