Building a home in Panama
If you do decide to build a home on your land, there are several steps required. First, conduct a preliminary study, which should be completed before you buy the land. Also,
be sure to see if your lot has access to water, drainage, electricity and telephone services. You will have to hire an architect
or civil engineer to oversee the construction of your home.
Be sure to get several bids and ask for references. Expect to visit
the construction site almost everyday to ensure things are getting done.
If you cannot be there have a reliable person inspect the construction site for you on a daily basis.
Before you build, you should seriously weigh the costs
of building a home yourself or buying
a ready-made home. As in the rest of Central
America most construction in Panama is
done with cinder block. However, more and more sheet
rock is being used in the interior of homes for ceilings and
walls. Most floors are covered with ceramic tile. Wall to wall
carpeting and rugs are rarely found in homes.
Property Ownership
Foreigners can own property in Panama with few restrictions. Currently ownership can be conveyed in two ways: title and rights of possession. Titled property is treated very similar to U.S. real estate
law. Deeds are recorded in the public registry or "Registro
Público".
Rights of possession are handled by the
agriculture department and also recorded. This system was
originally set up in the land reform of 1971 to encourage
homesteading
of unclaimed, untitled land. Most of the land traded in the
islands is
by right of possession with the exception
of town, property. The most important difference in the two
forms of ownership is that rights cannot be mortgaged.
Constitutionally the government cannot take possession
of private property without following a condemnation process similar to the U.S.; the owner must be compensated for land and improvements at fair market value.
Regarding waterfront property, by law all beaches are public, hence all beachfront properties most provide a right of way starting from the highest tide to the property line.
(The distance may vary).
The technical aspects of property ownership and your best options are best discussed with a qualified Panamanian lawyer. Building Restrictions
Environmental impact studies may be required in some instances, but there are currently no zoning laws or building
restrictions in some areas. Building permits are required and obtained
locally. Permits to build on stilts over the water require
a concession from the maritime authority. Construction Costs
There is a vast range here depending on accessibility of
the building site and degree of finish-out. The average
cost, on Colon, is estimated between $30- 40/sq. ft. Property Taxes
You will be pleased to know that property
taxes for newly constructed homes are not applicable for
the first twenty years you own the property.. A 2% (of acquisition
cost) transfer tax is charged upon the sale of titled property.
If you are seriously interested in exploring the country
for living and retirement, we suggest you read Living
and Investing in Panama guidebook, then contact
us to show the areas where you think you may
want to live. |
