Window of Opportunity Closes Soon in Panama Real Estate
A real estate tax holiday that can save homeowners tens of thousands of dollars and that is important to ex-pats and snowbirds ends soon in Panama. Those planning to build have to have a permit before August 31. But while one window closes, at least partially, there are fresh investment opportunities with older real estate. (PRWEB) May 14, 2005 -- If you want to live free of real estate taxes in Panama for the next 20 years, you'd better hurry up. A window of opportunity closes on August 31. The present deal, an effort to spur construction and create employment, is worth tens of thousands of dollars to ex-pats planning to retire in this peaceful haven or to buy winter homes here. Investors have rushed to save millions, and high-rise apartment buildings, hotels and shopping centers have been springing up like weeds, with the Panama City skyline a forest of cranes. But the deadline for obtaining construction permits under the deal is August 31. Completion must be before August 31, 2006. The tax-free status is transferable when the property is sold. What this means is that a considerable amount of older property is coming onto the market, and good deals can be had. But real estate taxes are relatively steep in Panama. Properties with a registered value of $30,000 or lower do not pay Panamanian property tax. Many homes in urban developments cost less than this. Tax is paid as follows on properties of a higher value: - 1.75% from $30,000 to $50,000; plus - 1.95% from $50,000 to $75,000; and - 2.10% on values above $75,000. For example, a property valued at $150,000 would attract the following annual tax: From $30,000 to $50,000: $ 350.00 From $50,000 to $75,000: $ 487.50 From $75,000 to $150,000: $1,750.00 Total: $2,412.50 Real estate tax savings on a $200,000 home over 20 years under the present scheme would be $69,250 or about one-third of the purchase price of a high-quality home. Not all is lost after September, however. Residences with construction permits issued after September 1, will have the following exemptions: - Value up to $100,000: 15 years - Value from $100,000 to $250,000: 10 years - Value over $250,000: 5 years Land is not exempt and property tax would continue to be paid on it if its value is above $30,000.
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