With all that there is to see and do, many people are finding they need more than just a week’s vacation to experience all that Panama has to offer. Panama’s government has put a number of incentives in place for those who wish to live or invest in the isthmus. These range from real estate tax breaks to ‘instant passports’, easing the way for investors and retirees and driving the impressive growth the country has seen in recent years.
Tourist visas in Panama are generally issued for 180 days, after which they can be renewed for another 180 days, simply by leaving the country for a day. There are also a number of options available to those who wish to spend more than six months a year in Panama.
Under the ‘pensionado’ program, any person who can demonstrate an income of $1000 a month or more can obtain a visa as a retiree. Pensionados are also entitled up to 25% in hefty discounts on travel, restaurants, health care, utilities and more.
Those willing to invest in Panama can obtain visas under several categories, by investing in bank term deposits, reforestation projects, local businesses and real estate. The latest visa program to be approved by the government under president Martinelli is the friendly nations visa which makes the process a lot easier with minimal requirements such as only $5000 deposited in your bank account, to show economic solvency. They have also streamlined the immigration processing making is much easier and you can typically expect to receive your residency in a year.
Property taxes are relatively low in Panama, and new constructions (those that are issued building permits before December 31st, 2012) are currently exempt from property taxes for 20 years. This tax exemption is transferable when the property is sold until the 20 years lapse. The new law basis the tax exemption in a sliding price scale, but anything under 200k will still receive the main exemption.
The land itself is not part of the exemption, however, and remains subject to taxation (as do older constructions). Property taxes start at $30,000 value, ranging from 0.7% to 2.1%. There is also an alternative tax rate that can be applied for properties that are up to date with their tax payments and properly registered, bringing the maximum tax rate to just 1%.
Tax benefits also exist for projects that help develop the tourism industry in specially designated ‘tourism zones’, including the Panama Pacific Coast Beaches. These can include real estate and income tax exemptions, as well duty and import tax exemptions on furniture, equipment and construction materials.
With so much to offer from this little vibrant country no wonder expats are flocking to this area and calling it their new home.