Real Estate Transfer Tax in Panama: Key Changes to ITBI and Housing for 2026
The recent declarations by the President of the Republic, José Raúl Mulino, open a new planning scenario for foreign investors and property buyers in the country. The announcement of a legislative package for economic reactivation introduces high-impact modifications to the real estate market, especially regarding the collection of the 2% real estate transfer tax in Panama (ITBI) for new properties.
- Key updates in 1 minute:
- ITBI Exemption or Elimination: The government aims to reverse or segment the collection of the 2% tax on new homes, which came into effect earlier this year, through exemption tiers.
- Adjustments to Preferential Interest Rates: The focus will shift towards incentivizing construction in the interior of the republic, a market with great potential for residential development.
- Pro-Private Enterprise Approach: The state strategy prioritizes attracting private capital and tax simplification over unproductive public subsidies.
The ITBI Context: What has changed this year?
After more than five decades of exemption for new homes, the 2% collection of this tax was reactivated at the beginning of 2026. As expected, the measure immediately generated friction in the cost sheets of developers, builders, and international buyers. The unforeseen surcharge increased the closing price of ready-to-deliver units, slowing down the closing of asset investment operations.
What does the Executive seek with the new change? To immediately reactivate the construction sector through clear fiscal competition incentives. For an international investor, this represents a unique window of opportunity to negotiate asset acquisitions with a substantially lower transfer tax cost.
| Tax Concept | Situation (Early 2026) | Proposed Reform (Mulino Administration) |
|---|---|---|
| ITBI on New Homes | Active collection of 2% on the value of the transferred property. | Elimination of the tax or exemption by specific price tiers. |
| Preferential Interest Rates | Standardized subsidy tiers, with less dynamism in inland regions. | Refocusing the law to boost self-construction and investments outside the capital. |
| Stimulus Strategy | Mixed programs of subsidies and direct public spending. | Promotion of employment through private investments and strategic port concessions. |
Asset Optimization and Acquisition of Residential Properties
Buying properties in Panama not only acts as a safe haven of value under a dollarized economy. It is also often the most direct way to consolidate residency and secure an unbeatable tax status. Those wishing to take advantage of the territory’s benefits should carefully analyze how to structure the purchase of these assets.
“The exemption from transfer fees represents a direct saving of thousands of dollars in high-volume residential operations, allowing that capital to be redirected towards diversifying local portfolios.”
The use of local legal entities continues to be the recommended practice by the most experienced consultants. By starting a company in Panama, investors gain an irreplaceable layer of asset protection and simplify the processes of inheritance and subsequent sale of residential units. This, combined with a clear understanding of taxes in Panama, allows for consolidating operations with a net profitability superior to that of other jurisdictions in the region.
How does this affect your move to Panama? PanamaWay’s analysis
At PanamaWay, we view these reforms not as mere changes in figures in a tax code, but as strategic planning levers. The abolition of the 2% ITBI on new projects will directly reduce the entry cost for capital. If you are looking to structure a real estate purchase to apply for residency by investment, now is the time to prepare the legal framework.
A real case from our office: Last month, a Swiss client contacted us with the intention of acquiring three new-build apartments in San Francisco, Panama City, with the goal of obtaining permanent residency under the qualified investor modality. Their initial plan was halted when calculating the impact of the 2% ITBI implemented in January 2026, which represented an unforeseen additional cost of almost USD 16,000 in transfer fees.
Our solution? We restructured the purchase agreement contracts to delay the definitive transfer signings, structuring the acquisition through a Sociedad Anónima (Corporation). With the Executive’s new announcements of fiscal flexibility, our client will be able to formalize the deeds, benefiting from the projected exemptions, and also optimally channel their application to obtain residency in Panama without incurring redundant tax burdens.
If you wish to analyze your real estate or corporate investment scenario under the new tax framework for 2026, contact our senior advisors today to design a plan tailored to your family and asset needs.