Panama Forum

Longmarch
Joined 2015
Posts: 7

9 years ago

Real estate investment in PC – first impression

9 years ago

We spent a week in Panama City including an excursion to Coronado. This is our first trip to Panama; we love the place and will come back again. We’d like to share what we have learned so far and hope to hear your feedback and comments.

1. The 20-year tax exemption is only valid if the building permit was issued before July 1, 2009. After that, the exemption will depend on the sale price. For example, for a property above $250,000, the exemption will be just five years.

2. Cinta Costera is a very nice area, and high rise buildings on Balboa Av could be a worthwhile investment opportunity. However, we were a little disappointed about the construction quality in several buildings we visited. Yoo is an exception, but it may only attract a limited demographic as people in this forum have pointed out. Unexpectedly, AC and major appliances are not included for new apartments; the sticker price could be as high as $15,000 for AC alone at Yoo.

3. El Cangrejo is among the best areas in Panama City to live, if one appreciates city life and wants to have all the conveniences within walking distance. An evening stroll along Via Argentina may be a good way to experience the area. The so-called Red Light District around Veneto Hotel is inconspicuous (our hotel is just five min walk to Veneto Hotel). As Panama is still developing, today’s El Cangrejo may still fall short if it’s compared to a “chic” neighborhood in the US.

4. Costa del Este (CdE) may have great future with many new developments underway. Corridor Sur is a closed highway that links CdE to the downtown business district. Unfortunately we didn’t have time to tour the area during this trip. We’d like to hear your comments about CdE.
5. In Coronado, we visited (with a realtor) only gated community and developments within. In general, the construction quality there seems better than what we saw in the city. Vista Mar is a major development in Coronado, but the place looked pretty empty. We were told 70% was sold. “70%” seems to be a standard answer everywhere we went, so we don’t know if we can believe this number.

6. For a condo (in a tall building) inside a gated community in Coronado, the fees will include both condo fee and community fee. At Vista Mar, the golf fee, which is not mandatory, is $7,000 at front plus additional monthly fee.

7. To sell a property in Panama, the seller needs to pay (a) 2% transfer tax, (b) 3% gain tax even if the property has not appreciated, (c) 2-10% (negotiable) commission, and (d) attorney’s fee (at least $1,000).

8. Overall, we feel real estate investment in Panama can be challenging for people who don’t speak Spanish and don’t live in the country. Market data (for rentals and sales) are not readily accessible for decision making. We will need more visits to better understand how things actually work in Panama.

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