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New Tourist Rental Law in Panama 2025: Guide for Real Estate Investors

Panama continues to consolidate its position as one of Latin America’s most attractive investment hubs, with its dynamic real estate market playing a key role in this growth. The rise of digital accommodation platforms has opened new and lucrative opportunities for property owners but has also created the need for a clear regulatory framework. Recently, the National Assembly took a decisive step by approving in its first debate the bill regulating tourist rentals, a measure that directly affects platforms like Airbnb and Booking.com. For the international investor, understanding the new tourist rental law in Panama is fundamental for making informed decisions, ensuring the legality of operations, and maximizing investment returns.

This new regulation not only seeks to formalize the sector and ensure fair competition with the hotel industry but also offers greater legal certainty and transparency for investors. Below, we break down the key points of this legislation and analyze its impact on the country’s real estate investment landscape.

What is the New Tourist Rental Law in Panama?

Bill 301, approved in its first debate by the Commission on Trade and Economic Affairs, establishes a specific legal framework for renting properties to tourists. One of the most significant changes is conceptual: the activity’s name changes from “short-stay tourist lodging” to “tourist rental of properties”. This terminological adjustment is not minor, as it precisely delimits its legal scope and defines it as the provision of temporary accommodation for periods ranging from one day to a maximum of 90 consecutive days, without constituting a habitual residence.

The new legislation officially recognizes tourist rental as a formal tourism activity, with supervision and regulation falling under the Panama Tourism Authority (ATP).

This recognition is crucial as it fully integrates this business model into the country’s tourism structure, subjecting it to a framework of control and benefits that was previously ambiguous. For investors, this translates into clear rules and a more predictable operating environment.

Keys to the New Regulation for Investors and Property Owners

The law introduces a series of changes designed to simplify formalization, ensure tax collection, and regulate coexistence in property owner communities. These are the aspects every investor should know:

Mandatory Registration: Simplified Formalization

One of the pillars of the new regulation is the creation of a centralized and accessible registration system.

  • Enrollment in the National Tourism Registry: All properties intended for tourist rental must be mandatorily registered in this registry, managed by the ATP.
  • Digital and Free Process: The process will be entirely digital, free, and immediate, eliminating bureaucratic barriers and unnecessary costs.
  • Unique Identification Number: Once registration is complete, the ATP will assign an identification number to the property. This number will be an essential requirement to advertise the property on any digital platform, website, or technological medium.

This measure not only formalizes the activity but also provides authorities with an effective tool for market control and supervision, ensuring that only properties complying with regulations can operate.

Tourist Rental Taxation: The 10% Tax

Tax clarity is one of the most anticipated points by the sector. The law establishes a clear tax framework for these services, aligning it with other tourist activities.

The consensual text maintains the application of the Tax on the Transfer of Movable Goods and Services (ITBMS) of 10% on accommodation services, the same as applied to the hotel sector. Although the possibility of raising it to 15% was discussed during the debate, it was decided to maintain the 10% rate to avoid discouraging investment. For a more in-depth analysis of tax obligations in the country, you can consult our guide on Taxes in Panama for Expats and Tax Residents.

Additionally, the General Directorate of Revenue (DGI) will be strengthened in its collection capacity. The law empowers the DGI to enter into agreements with digital platforms, which will be obliged to:

  • Share tax information of hosts at least once a year.
  • Act, in certain cases, as tax withholding agents, simplifying the payment process for the owner and ensuring compliance.

New Rules for Horizontal Properties (PH)

Perhaps one of the most critical points for investors is the regulation within condominiums or horizontal properties (PH). The new law seeks to end conflicts between permanent residents and tourists.

It is required that the co-ownership regulations of each building expressly define whether tourist rental is permitted.

This means that, before acquiring a property for short-term rental purposes, the investor must conduct thorough due diligence and verify that the PH’s regulations explicitly authorize this activity. In mixed-use buildings, areas and floors designated for each use must be clearly delimited, always respecting current urban zoning regulations. This measure provides legal certainty to both investors and permanent residents.

Less Bureaucracy, More Transparency

In an effort to encourage formalization, the law eliminates certain procedures that have historically complicated operations. Specifically, properties registered under this modality are exempt from:

  • The need to obtain an Operating Notice.
  • The requirement to endorse lease contracts before the Ministry of Housing and Territorial Planning (MIVIOT).

This administrative simplification is excellent news for investors, as it reduces the costs and time required to bring a property to market, aligning with Panama’s pro-business philosophy.

Is it a Good Time to Invest in Tourist Rentals in Panama?

The approval of this new tourist rental law in Panama represents a turning point for the real estate market. Far from being a barrier, this regulatory framework provides the certainty and stability that serious investors seek. The formalization of the sector protects long-term investment, reduces legal risks, and creates a fairer and more transparent competitive environment.

Panama continues to be a top-tier destination for tourism and business, with constant demand for quality accommodation. This law, by clarifying the rules of the game, reinforces the country’s appeal as a safe and profitable place to invest in real estate. For those considering this investment path, structuring their operation through a legal entity can offer additional benefits. We recommend exploring options to start a company in Panama as a foreigner.

The key to success will lie in careful planning and rigorous due diligence, especially concerning the regulations of each horizontal property. With the appropriate legal framework, tourist rentals are positioned as one of the most promising investment opportunities in the Isthmus.

Conclusion: A Clear Future for Real Estate Investment

In summary, the new tourist rental law in Panama is a positive evolution that professionalizes a booming sector. By establishing a mandatory digital registry, clarifying the tax burden, and defining rules for horizontal properties, the Panamanian government is laying the groundwork for sustainable and secure growth. For international investors, this translates into greater protection and a clearer path to profitability.

If you are considering investing in the Panamanian real estate market and wish to navigate this new regulatory environment with maximum security and efficiency, our team of experts is here to help you. We offer comprehensive advice to ensure your project in Panama is a success from day one.

Contact us to start your investment project in Panama.

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