The property boom in
About 30,000 units were built between July 2006 and July 2007, another 40,000 announced and/or being built, and rental yields are going through the roof. Tourism and business are equally attracted. Global corporations like Hilton are building skyscraping hotel complexes and giving
In the case of property booms in Eastern Europe, it was easy to see where they came from: breakup of the
The property boom in
The closest thing to a trigger for the boom arising from this
Canal boost for the economy
Handing over the Canal has been a massive boost to the Panamanian economy. But more than that, the U.S. is putting money into the Panamanian economy in the hope that the boom will set an example for other states that either already are, or are considering joining or forming an alliance against Western interests.
A very conservative estimate on capital appreciation is 15-20%. Rental yields in the big cities are an astonishing 11.23% on a property of 190 sq.m, amazing for a property of such a size; another plus is the pro-landlord rental laws.
The buying process for foreign investors is also incredibly simple, with only 7 stages that can be completed in around 44 days. There are no restrictions on foreign ownership – according to the salespeople I have spoken to, those are two of the key issues people look for when buying an overseas property: an easy buying process and freehold rights.
Low capital gains tax
Other reasons are the low roundtrip transaction costs of around 7-9% including agent’s fees of 3-5% and no inheritance tax, all things buyers look for in overseas purchases. Another plus point for an investment in
5% of the sum of the following, 10% of the property’s cadastral value for every year the property has been held, plus the cost of any improvements, plus the property’s cadastral value at time of sale. This option consolidates transfer tax and capital gains tax, and means the final sum for the above calculation is all that a foreigner pays upon selling a
The second option is: 2% of the higher value between the sales price, and the sum of the property’s cadastral value at time of acquisition, improvement costs during ownership, and 5% of the property’s cadastral value, (including improvement costs) for each year the property has been held. The second option incurs a further taxation on the selling or transfer price, less transfer costs, the acquisition cost or cadastral value, and 10% of acquisition costs for each year the property has been held, the sum of which is then taxed at standard income tax rates.
In my humble opinion, the first option is best, but advice from a financial advisor and solicitor should go hand-in-hand with any property transaction, buying and selling. Their advice on which option is best for you is far more valuable than mine. Before that, though, you have to actually buy a property; and the volume of new properties coming onto the