Panama's Real Estate transfer taxes is a flat tax of 2% of the Sale price or the Property Registered Value at Tax Office, whichever price is higher, and the taxes mus be paid prior to be able to convert the Purchase Sale Contract into a Public Deed.
As for the Real Estate capital gain taxes, standard it is a 10% of the gain, but since the 2010 Tax Law reform, now instead of paying the real gain, the seller must pay a 3% of the Sale price or the Property Registered Value at Tax Office, whichever price is higher, which will be applied as for capital gain taxes, not mattering wheter there are even losts in the deal.
According to the Law, thereafter, if the amount paid for capital gain tax was higher then the real gain, then the tax payer can apply a form asking the tax office for the money difference as tax credit or the money back. In the other way though, if the tax paid was way less than the real one needed to be paid, then the tax payer had the option, when filing the original forms, to check it as the final taxes to be paid.
In other words, this changes to the law really benefits the big deals out there, who can save big monies on capital gain taxes, whereas the small transactions end up paying more than they should.
Liane Kraemer
12/11/2011
Articles
