Panama: Fees and Taxes on Property Prices

In recent years the percentage of taxes paid by promoters compared to the final cost of a home rose from 1.3% to 2.7%.

Friday, September 6, 2013

The price of building materials, labor and land values ​​are not the only factors that influence the cost of housing, taxes collected for construction also affect the end buyers.

It is for this reason that the construction industry has shown its opposition to the tax increase that has been implemented on residential projects, since developers are the ones who bear the costs of infrastructure for sanitation and roads even when the work has been completely finished.

"Unfortunately, these costs are transferred to the end customer, ie, thousands of Panamanians who go to real estate companies and housing fairs in order to realize their dream of homeownership, said the president of the Panamanian Chamber of the Construction Industry (CAPAC), Enrique Asensio.

Meanwhile, the executive director of the National Housing Developers Council (Convivienda), Elisa Suarez, said bureaucratic processes are too long, causing unforeseen expenses that increase the need for interim financing so that promoters can pay banks.

More on this topic

Panama: Excessive Bureaucracy for Construction

April 2017

Between 60 and 90 procedures in 19 institutions must be undertaken by developers in order to obtain the necessary permits to build a real estate project.

Companies in the sector are complaining that the procedures which used to be completed within a maximum period of two years, are now taking up to four years.

Trends in Housing Supply in Panama

November 2013

20 years ago for every apartment for sale in a high rise building there were 9 houses on offer, whereas today the ratio is 50-50.

The construction of residential buildings in the city has been driven by the increased purchasing power of immigrants and the integration of the underground transport system.

Costs Prevent Building Houses Under $30,000

April 2013

For promoters in Panama, construction of social housing is no longer profitable, mainly because of the high cost of materials and construction supplies.

"... only about eight years ago there was a proliferation of developments in the areas east and west of the capital with average sales of between $18,000 and $25,000.

Panama: Luxury Housing Investment

March 2013

At the end of 2012, the luxury Class A apartments accounted for 78% of the units under construction, while the Classes B and C together accounted for 22%.

According to a residential market study prepared by the firm CB Richard Ellis Global Research and Consulting (CBRE Panama), at the end of 2012, luxury apartments categorised as Class A, were the most popular in the residential market in Panama, representing 78% of the total units under construction. Meanwhile, Class B and C apartments, amounted to 22%.

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