Property Tax is one of the most important—and most ignored—tax obligations for property owners in Panama. Many owners only discover they have an outstanding debt when they try to sell, inherit, or release a mortgage. In this guide, we explain how much is paid, when, what exemptions exist, and how to keep your property in order.
What is property tax?
The Real Estate Tax is a tax levied on the value of real estate located within the national territory, according to the Fiscal Code of the Republic of Panama. The tax base corresponds to the cadastral value of the land and the registered improvements or constructions. This value is set by the National Authority for Land Management (ANATI), and each property is identified by its finca number in the Public Registry.
The current regime stems from Law 66 of October 17, 2017 (regulated by Executive Decree 363 of 2018), in effect since January 1, 2019, which reduced tariffs and introduced the concepts of Family Heritage Tax and Principal Residence.
Who pays and what is it calculated on?
Property owners whose cadastral value exceeds their corresponding minimum exemption pay the tax. The calculation is based on the sum of the land value plus improvements (construction), applying a progressive table: each value bracket pays its own rate, not a single rate on the total.
Property Tax Rates (Law 66 of 2017)
There are two tables. Which one applies depends on how the property is classified.
Family Tax Estate or Principal Residence
Applies to the owner's permanent residential housing (main residence). It is the most favorable table:
| Cadastral value (land + improvements) | Rate |
|---|---|
| Up to B/. 120,000 | 0% (exempt) |
| Regarding the surplus of B/. 120,000 up to B/. 700,000 | 0.5% |
| Regarding the surplus of B/. 700,000 | 0.7% |
Combined Progressive Tariff (other properties)
Applies by default to second homes, commercial properties, land, and real estate that are not constituted as a family tax patrimony or as a principal residence:
| Cadastral value | Rate |
|---|---|
| Up to B/. 30,000 | 0% (exempt) |
| From B/. 30,001 to B/. 250,000 | 0.6% |
| From B/. 250,001 to B/. 500,000 | 0.8% |
| Over B/. 500,000 | 1.0% |
Practical example: A home that is your primary residence with a assessed value of B/. 150,000 is taxed at 0% on the first B/. 120,000 and 0.5% on the remaining B/. 30,000, or B/. 150 per year.
Exemptions Available
In addition to the preferential table, there are exemptions that are worth reviewing:
- Family Tax Estate / Primary Residence: Real estate with a cadastral value of up to B/. 120,000 is exempt, subject to a sworn statement before the DGI.
- Agricultural estates those dedicated to agricultural activities whose value does not exceed a certain amount may be eligible for exemption for determined periods.
- Real estate for people with disabilities: under the requirements and value limits set by the regulations.
- Social interest housing and state property, municipalities, and entities exempt by law.
The key difference: any owner (natural or legal person) can establish a Tax Family Estate, while the Primary Residence is intended for single or widowed natural persons who do not form a family under the same roof. Always check if your property already has an active exemption by consulting the DGI.
Payment dates
Property tax is paid in installments, in three payments (trimesters):
| Departure | Deadline |
|---|---|
| 1st game | April 30 |
| Second match | August 31st |
| 3rd match | December 31st |
Early payment discount If you pay the full annual fee by April 30 and your account is in good standing, you are eligible for an early payment discount. According to the DGI, this discount has been 10% (in some years it has been as high as 15%), so it’s best to confirm the current percentage for the year directly with the bank.
Consequences of not paying on time
Failure to pay within the deadline may result in:
- Surcharge on the amount owed (typically 10% per overdue installment).
- Late-payment interest, which increases the debt over time.
- Coercive collection by the tax administration, which in extreme cases may lead to enforcement proceedings and seizure of the property.
There is a consequence that often hurts more than the surcharge: without being up to date, you cannot obtain the property's tax clearance certificate, an indispensable requirement to sell, donate, inherit, or release a mortgage. A forgotten arrears can paralyze a sale at the worst moment.
How to pay and check your account statement
You can check your balance and pay through:
- The e-Tax 2.0 system of the General Directorate of Revenue (DGI).
- The DGI service windows.
- The National Bank of Panama and other affiliated banks.
Recommendation: regularly review the account statement of each property and keep the payment receipts. Banks that finance home purchases may also act as tax withholding agents.
Frequently asked questions
How much property tax is paid in Panama?
It depends on the cadastral value and the applicable table. A primary residence pays nothing up to B/. 120,000 and then 0.5% on the excess (up to 0.7%). Other properties pay from 0.6% on the value exceeding B/. 30,000.
When is it paid?
In three installments: April 30, August 31, and December 31. Paying the full annual amount before April 30, with no arrears, entitles you to an early-payment discount.
What happens if I do not pay the property tax?
Surcharges and interest accumulate, the DGI can initiate coercive collection, and you will not be able to obtain the tax clearance needed to sell, donate, or release the mortgage.
Is the tax paid on the land or on the construction?
On both: the tax base is the cadastral value of the land plus the registered improvements.
How do I know if my property is exempt?
By checking the property's status at the DGI. If your home qualifies as a family tax estate or primary residence and is not yet declared, you can request the benefit through a sworn statement.
What is the difference between a family tax estate and a primary residence?
Both give access to the preferential table and the exemption up to B/. 120,000. The family tax estate applies to the home of the owner and their family under the same roof; the primary residence applies to natural persons who do not form a family (for example, single or widowed).
How to keep your obligations up to date
At Lima y Asociados, we guide property owners and companies in keeping their tax obligations in order: we verify the property's account statement with the DGI, assess whether your property can qualify for the family tax estate or other exemptions, and plan payments within the legal deadlines. Proper tax management avoids extra costs and provides legal certainty over your assets.
If you have questions about the status of your Property Tax or need advice to regularize your situation, contact us. Write to us on WhatsApp and we'll review it with you.
This content is informative and general in nature; it does not constitute legal or tax advice. Rates, discounts, and deadlines may vary according to legal reforms or annual DGI provisions. Confirm the current values for your case.