Hello everyone! Today, we’re going to talk about how you can own property in the beautiful country of Panama. There are three main ways you can do this: 
Titled Property:
This is the most common and secure form of property ownership. It’s similar to owning a car – the title is in your name, and you have full rights to the property. You can sell it, rent it out, or even leave it to someone in your will. The property is registered in the Public Registry system, making it easy to verify ownership. However, properties valued over US$30,000 are subject to annual property taxes.
Buying titled property involves a few steps:
Promise to Purchase Contract:
A Promise to Purchase Contract is like making a reservation at a restaurant. You give a small deposit (down payment) to secure your spot (the property). This allows you some time to check out the menu (do a title search) and make other arrangements.
To make sure the property isn’t sold to third parties, the registry registers the contract. This way, the property is secured until the final closing. It’s a way to make sure both you and the seller are serious about the transaction.
Title Search:
a Title Search is like a detective’s investigation. A real estate lawyer in Panama does this investigation to make sure everything is in order with the property you want to buy. Here’s what they check:
- Seller’s Ownership: They make sure the person selling the property really owns it
- Absence of Encumbrances: They check if there are any claims or liens on the property.
- Utility Debts: They also check if there are any unpaid utility bills for the property.So, a Title Search is a way to make sure you’re buying a property without any problems or surprises.
Buy-Sell Contract:
A Buy-Sell Contract is like the final handshake. It’s a document that you and the seller sign to make the deal official. You pay the seller, and the seller agrees to give you the property.
This contract is then registered at the Public Registry. It’s a way to make sure everyone knows you’re the new owner.
So, a Buy-Sell Contract is the final step in buying a property where you pay the seller and the deal becomes official.
Title Transfer:
a Title Transfer is getting the keys. It’s the official step where the ownership of the property is transferred from the seller to you. This can happen in two ways:
- Directly: This is the seller handing you the keys to the property directly. The seller’s name is removed from the title, and your name is added.
- Through a Corporation’s Share Transfer: This is if the property was owned by a corporation, and you’re buying shares in that corporation. Instead of the property’s title changing hands, the ownership of the corporation is transferred. So now, you own the corporation, and by extension, the property. This method is often used for larger transactions or commercial properties.
Rights of Possession (ROP):
ROP is like setting up a tent in a public park. The government owns the land, but you’re allowed to use it. You don’t have to pay any property taxes for using the land, but if you make any improvements (like building a shed), you might have to pay some taxes.
Most of the time, you can turn your ROP property into a titled property by buying the land from the government. But there are some areas where this isn’t allowed. So, in a nutshell, ROP is a way to use government-owned land. It’s a bit like borrowing the land, rather than owning it outright.
There are two types of ROP properties:
- Beachfront and island properties: These are owned by the national government, but you can use them. However, you can’t own more than 200 meters from the high tide mark.
- Agricultural land: This land is administered by the Ministry of Agriculture. You can be granted title for agricultural uses.
It’s important to note that while you can transfer ROP property to others, including foreigners, it doesn’t provide the same level of security as titled property.
Acquiring possession rights involves:
Promise to Purchase Contract:
A Promise to Purchase Contract is an agreement between the buyer and the seller. When you sign this contract, you make a small down payment. This serves two purposes:
- Secures the Property: The down payment is like a reservation. It ensures that the seller won’t sell the property to someone else while you’re getting ready to buy it.
- Allows Time for Due Diligence: The down payment also gives you some time to check everything about the property.
Due Diligence:
Due Diligence is like doing your homework before buying a property. It’s a process where you check everything about the property to make sure there are no surprises later.
Here’s what it involves for Rights of Possession properties: 
- Verifying Possession Rights Certification: This is like checking the seller’s ID. You want to make sure they really have the right to use the property. The certification should be valid and issued by a competent government authority.
- Survey: This is like looking at a map of the property. A professional surveyor checks the boundaries and size of the property to make sure it matches what’s in the certification.
- Physical Inspection: This is like visiting the property in person. You check the condition of the property and make sure there are no issues like boundary conflicts with neighbors.
- Permitting Verification: This is like checking the rules for using the property. If you plan to build something on the property, you need to make sure there are no regulations that would prevent you from doing so.
Remember, due diligence is a very important step when buying a property. It helps you avoid problems and ensures you know exactly what you’re buying.
Buy-Sell Contract:
Buy-Sell Contract is the final agreement between the buyer and the seller in a property transaction. When you sign the contract, you make the final payment to the seller. For Rights of Possession
properties, these contracts can’t be registered at the public registry. Instead, they are authenticated by a public notary. This is like getting a stamp of approval from an official person who confirms that the contract is valid.
A Possession Rights Certification Transfer:
is the official step where the right to use the property is transferred from the seller to you. Here’s how it works:
After you and the seller sign the Buy-Sell Contract and you make the final payment, the seller transfers the Possession Right Certification to you. This is like the seller giving you a certificate that says you can now use the property.
Corporation’s Share Transfer: In some cases, if the possession rights are in a corporation’s name, and the seller agrees to sell the corporation’s shares, then there is no transfer of Possession Rights Certification. Instead, the ownership of the corporation is transferred. So now, you own the corporation, and by extension, the right to use the property.
So, a Possession Rights Certification Transfer is the final step in buying a Rights of Possession property. It’s when the right to use the property is officially transferred to you. It’s like getting the keys to your new house!
With the right steps,
you can sometimes turn Rights of Possession (ROP) property into titled property and become the official owner. To do this, you need to follow a specific process.
First, you sign an agreement with a lawyer who will help you with the process. Then, you give the lawyer the power to act on your behalf, known as Power of Attorney. After that, you pay the lawyer for their services. You also give the lawyer a copy of your ROP Purchase Contract. The lawyer then collects all the necessary documents and arranges for any necessary inspections.
ANATI, the land authority in Panama, agrees to give you a title, which is known as Resolution for Title. Notices are then published in newspapers, which is called Public Notices. Finally, a public deed of title is issued at the Public Registry. This entire process can take from 6 months to 1 year.
It’s a bit like a journey, but at the end of it, you could become the official owner of the property.
Concession Property:
This is like renting a spot in a public park to set up a lemonade stand. The government owns the land, but they let you use it for a specific purpose, like running a hotel or a marina. These rentals, or concessions, are usually for 20 years but can be up to 40 years in some special areas. They’re often in coastal or protected areas where you can’t own the land outright.
Sometimes, developers offer investors a chance to buy a part of a property, like a timeshare. The good thing about concession property is that it’s backed by a contract with the government, so there’s very little risk to the investor. Plus, you can usually get insurance for extra peace of mind.
Title insurance:
Title insurance protects you from these problems. If something goes wrong and it turns out you can’t use the property the way you wanted to, the insurance company will compensate you.
And the best part? Title insurance usually doesn’t cost much compared to the security it provides. So it’s definitely worth considering for all property transactions in Panama. It’s like wearing a helmet when you’re riding a bike – hopefully, you won’t need it, but it’s good to have just in case!
Remember, buying property in Panama can be a great investment, but it’s important to understand what you’re getting into. Always consult with a competent real estate lawyer to guide you through the process.
Happy house hunting! 🏡
