National Assembly approves reduction of property tax in Panama
The National Assembly approved bill 509 which establishes the payment of property tax in Panama, as well as the system of exemptions and reductions in the tax rate that are established in the real estate. Bill 509 constitutes the most important integral reform of the property tax in the last 40 years and establishes a greater fiscal balance, which benefits the majority of the owners.
The property tax in Panama is reduced by law and will take effect in 2019. The project proposes an overall reduction in property tax rates of between 80% and 100%, protects the family home and the main dwelling, modifies the exemption regime, establishes mechanisms to guarantee the payment of the tax and raises a period of moratorium for the payment of the tax until December 2017.
The initiative establishes the following rates for the housing of the Family Patrimony Tributary or main dwelling:
• 0.0% to 120 thousand dollars.
• 0.5% from 120 thousand dollars to 700 thousand dollars.
• 0.7% from the 700 thousand dollars onwards.
Commercial, industrial, second homes and other properties, Bill 509 states the following:
• 0.0% up to 30 thousand dollars.
• 0.6% from 30 thousand dollars to 250 thousand dollars.
• 0.8% from 250 thousand dollars to 500 thousand dollars.
• 1.0% of 500 thousand dollars onwards.
In addition, the proposal recognizes the exemption of the property tax for “first purchase” of a home that is registered as a Family Patrimony Tax or main house for 3 years, and whose value does not exceed 300 thousand dollars.