The World Bank Doingbusiness site has surveys which examine the steps, time, and cost involved in registering property in Panama.
STANDARDIZED PROPERTY Property Value: 244,500
City: Panama City
Registration Requirements:
| No: | Procedure | Time to complete: | Cost to complete: |
|---|---|---|---|
| 1* | Obtain a non-encumbrance certificate at the Public Registry Office | 2-3 days (simultaneous with procedure 2) | $30 |
| 2* | Obtain a certificate of good standing from the General Cadastral Office | 15 days (simultaneous with procedure 1) | $5 |
| 3 | A lawyer prepares the sale agreement | 2 days | $ 200 (lawyer’s fees) |
| 4 | Payment of the Transfer and Capital Gains Taxes | 2 days | 2% of property value transfer tax + 10% capital gains tax |
| 5 | Notarization of the sale agreement and preparation of the public deed | 2 days | $100 |
| 6 | The public deed is filed and recorded at the Public Registry Office under the name of the buyer | 7-10 days | 0.25% of property price (registration fee) + $5 for filing + $10 for analyzing the document |
| 7 | A copy of the recorded deed is filed at the Cadastral Office to record the new buyer and the new value for tax purposes | 15 days | no cost |
* Takes place simultaneously with another procedure. | |||
- Procedure 1.
- Obtain a non-encumbrance certificate at the Public Registry Office
- Time to complete:
- 2-3 days (simultaneous with procedure 2)
- Cost to complete:
- $30
- Comment:
- Parties
obtain a certificate of non-mortgage and non-litigation before starting
the transaction. This certificate is obtained at the Public Registry
Office.
- Procedure 2.
- Obtain a certificate of good standing from the General Cadastral Office
- Time to complete:
- 15 days (simultaneous with procedure 1)
- Cost to complete:
- $5
- Comment:
- The
seller must obtain a certificate of good standing with the cadastral
value from the Treasury, which relates to the property tax to be paid
by owners. This certificate can be requested by any third party
interested, and must have the lot number and the page number (document
number), issued by the Public Registry Office. Note that land with a
value under $30,000 is property tax exempt. Property Tax may increase
as high as 2.10% annually based on the cadastral value.
- Procedure 3.
- A lawyer prepares the sale agreement
- Time to complete:
- 2 days
- Cost to complete:
- $ 200 (lawyer’s fees)
- Comment:
- A
lawyer usually prepares the sale agreement (it can also be prepared by
a real estate broker). In any case, the sale agreement -called the
Minuta- needs to be stamped by a Panamanian lawyer prior to being
executed in a public deed. The sale agreement should mention that there
are no mortgages or limitations on the property. The documentation
shall include: Non-encumbrance certificate (obtained in Procedure 1)
- Procedure 4.
- Payment of the Transfer and Capital Gains Taxes
- Time to complete:
- 2 days
- Cost to complete:
- 2% of property value transfer tax + 10% capital gains tax
- Comment:
- Prior
to filing and recording the public deed at the Public Registry Office,
the Transfer Tax should be paid (if it’s not exempt by any particular
reason established by law) at the Ministry of Economics and Finance, by
the seller. Transfer tax: 2% of the price of the transaction or the
cadastral value, whichever is higher. There is no VAT in Panama for
transfers of property
As of 7/2006, at this time the seller must also pay 10% capital gains
tax, regardless of how long he has owned the property.
- Procedure 5.
- Notarization of the sale agreement and preparation of the public deed
- Time to complete:
- 2 days
- Cost to complete:
- $100
- Comment:
- The
notary notarizes the sale agreement and prepares the public deed. All
transfers of property must be notarized or made into a public deed
before filing for recording at the Public Registry Office. The
documentation shall include: Sale agreement (prepared in Procedure 3)
Receipt of payment of the transfer tax (obtained in Procedure 4)
Certificate of good standing with the cadastre (obtained in Procedure
2)
Good standing certificate with water utility services (show that
payments are up to date)
- Procedure 6.
- The public deed is filed and recorded at the Public Registry Office under the name of the buyer
- Time to complete:
- 7-10 days
- Cost to complete:
- 0.25% of property price (registration fee) + $5 for filing + $10 for analyzing the document
- Comment:
- The
public deed is filed and recorded at the Public Registry Office under
the name of the buyer. The registration fee is paid at the National
Bank in favor of the Public Registry Office. The bank has a branch
inside the registry office. Since 1999, there has been an optional
expedited procedure in which one can obtain registration within 24
hours, at an additional cost of $250 though not many people choose it
because it is rather expensive.
The documentation shall include: the notarized public deed (obtained in
Procedure 5).
- Procedure 7.
- A copy of the recorded deed is filed at the Cadastral Office to record the new buyer and the new value for tax purposes
- Time to complete:
- 15 days
- Cost to complete:
- no cost
- Comment:
- A
copy of the recorded deed should be filed at the Cadastral Office to
record the new buyer for tax purposes as the new person responsible for
the payment of the property tax. This should be an internal procedure
after Procedure 6, but in fact, the buyer needs to do it in person so
far. The buyer picks up the certificate of good standing with the new
name and value at the end of the 2 weeks.
Full text in http://www.doingbusiness.org
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