What are closing costs in Panama?

Typically 1.5–4.0% of the price on a $300,000 purchase.

Buying property in Panama as an American

Q: How is rental income taxed in Panama?

Panamanian income tax on rental income: Rental profit is taxed at 0%, 15% and 25%. By law, tax on income paid to a non-resident must be withheld by the payer, so ask your tenant or rental agent how they handle it and file a Panamanian return through a local accountant to settle the final tax. Homes that are not the owner's main residence are exempt up to $30,000 of registered (cadastral) value; above that, property tax is 0.6% up to $250,000, 0.8% up to $500,000 and 1% above. No US–Panama income tax treaty (only a tax information exchange agreement, in force since 2011); Panamanian income tax is generally creditable against US tax.

Panama uses the US dollar, which removes currency risk, and has long attracted American retirees. Panama City has many new towers, so negotiate hard; short-term rentals are restricted outside tourist zones.

Data last verified on October 19, 2026 · AbroadYield research desk – public sources cited in each section

Key numbers

Gross rental yield

5.0–8.0%

Closing costs

1.5–4.0%

On a $300,000 purchase

Tax on rent (net basis)

0%–25%

Panamanian income tax on rental income

Entry prices from

$120,000

6–10 weeks to close

Can Americans buy?

Allowed

US buyers can own titled property on the same terms as Panamanians. Avoid 'rights of possession' land without a registered title.

The Pensionado visa needs a lifetime pension of about $1,000 a month ($750 if you also buy property worth $100,000+) and brings local discounts. The Qualified Investor visa requires $300,000 in a new property or $500,000 in a resale property (Executive Decree 17 of September 2026).

Data last verified on October 19, 2026 · AbroadYield research desk – public sources cited in each section

Sources: DGI – Dirección General de Ingresos (Panama); US Department of State – country information

How rent is taxed

Rental profit is taxed at 0%, 15% and 25%. By law, tax on income paid to a non-resident must be withheld by the payer, so ask your tenant or rental agent how they handle it and file a Panamanian return through a local accountant to settle the final tax. Homes that are not the owner's main residence are exempt up to $30,000 of registered (cadastral) value; above that, property tax is 0.6% up to $250,000, 0.8% up to $500,000 and 1% above.

No US–Panama income tax treaty (only a tax information exchange agreement, in force since 2011); Panamanian income tax is generally creditable against US tax.

As a US taxpayer you also report the rent on Schedule E. Your free ranking estimates the combined effect for your state and income.

Data last verified on October 19, 2026 · AbroadYield research desk – public sources cited in each section

Sources: DGI – Dirección General de Ingresos (Panama); PwC Worldwide Tax Summaries

Main risk

An oversupply of condos in Panama City puts pressure on rents and resale prices.

Law 80 of 2012 bans rentals under 45 days in the District of Panamá without an ATP lodging permit (fines $5,000–$50,000); tourist zones such as Casco Viejo allow them with a licence if the building's rules permit. A bill to replace the rule is pending.

Data last verified on October 19, 2026 · AbroadYield research desk – public sources cited in each section

Sources: US Department of State – country information; Global Property Guide (yields, transaction costs)

Cities we cover

Panama City$2,200/m² · gross 7.4%
Boquete$2,000/m² · gross 5.5%
CoronadoTo be verified$2,400/m² · gross 5.5%
Pedasí$1,600/m² · gross 6.5%

Is Panama right for you?

Get your free ranking of all destinations in 3 minutes, with after-tax estimates for your US state and income.

Get my free ranking