A new year is a great time for new changes. Whether you’re mixing up your office routine or trying out a new hobby, January is synonymous with trying new things.
The most relevant change we seen in Panama as we rolled into 2019 is the new property tax reform. As of, Jan 1, there are now new rates for the payment of real estate taxes. Curious how these new rates will affect your own property taxes? Keep reading for everything you need to know. Chances are, these changes bring good news!
What is the new property tax reform?
What do these new rates entail?
- Properties valued between $0 and $120,000 are exempt from taxes.
- Properties valued between $120,001 and $700,000 will have a 0.5% tax rate.
- Properties valued above $700,000 will have a 0.7% tax rate.
Who will these new rates apply to?
For secondary residences or commercial properties:
- Properties valued between $0 and $30,000 are exempt from taxes
- Properties valued between $30,001 and $250,000 will have a 0.6% tax rate
- Properties valued between $250,001 and $500,000 will have a 0.8% tax rate
- Properties valued above $500,000 will have a 1.0% tax rate
If your property already has 20 years tax exemption applied then you do not have to declare your property as your ‘Familiar Patrimony’. By declaring your property under the new property tax scheme you will face losing your current tax exemption. However, once your tax exemption has expired you will then have to declare the property under the new tax scheme.
What do I have to do?
These are:
- Properties valued between $0 and $30,000 are exempt from taxes
- Properties valued between $30,000 and $250,000 will pay 0.6%
- Properties valued between $250,000 and $500,000 will pay 0.8%
- Properties valued above $500,000 will be taxed 1.0%
So don’t waste any time in submitting your application and taking advantage of these new rates. This tax reform could easily save you thousands of dollars over the course of your mortgage and is a great incentive for prospective buyers and investors to think about purchasing a new home.
Al Jan
on said
Good morning,
Can you hold my hand on this a little more?
“To receive this benefit, tax payers must submit an application to constitute their property as either a Tributary Family Patrimony or a Permanent Residence. This application can be submitted to the Directorate General of Revenue. ”
Can all this be done online? Is there a published form that can be used? Should one go to the DGI website? Thanks!
Kent Davis
on said
Hi Al, thanks for your question. We are now in contact in private but in short, all of this can be done online.
cindy pieterick
on said
Do you have steps to pay my Panamá tax online? I tried on Banistmo Bank site but it requests a DGI payment ticket number, which I do not have (I have RUC, NIT, and DV).
When I tried on the DGI eTax site, I do not understand where to go to pay. I found under consult payments I have previously made but not sure what are the steps to find what I owe and how to pay.
HELP!
Kent Davis
on said
Hi Cindy, no problem. Someone from our office will reach out today.
Ruben (PN-2946)
on said
Hello Cindy:
Sorry to learn that you’re experiencing difficulties in making these payments.
I went online and found this Banistmo Step-by-Step Guide on how to make such payments through their online banking system. I did not find it in English, but it seems self-explanatory for Banistmo Online Banking system users. This is the link https://www.banistmo.com/wps/portal/banistmo/empresas/productos-y-servicios/guia-pagos-dgi
If that doesn’t work you can always reach out to them via email or chat and they should be able to give you the assistance you need.
You may also want to check out DGI’s Youtube Channel. I found this video which seems to address your concerns as well https://www.youtube.com/watch?v=OYHTHZnBDYs&t=9s
I hope that this information is helpful!
vanessa zhang
on said
We are from Asia and want to move here and I would like to know about private schools around the community, with a focus on grades 8-12; If we plan to immigrate here, How should we choose property?
Kent Davis
on said
Morning Vanessa, there are some terrific schools in Panama. Have you had a chance to check out our blog? As for choosing property, we can certainly help. YOu can expect to hear from a real estate agent shortly!