Located 1200 meters (3900 feet) above sea level, this little Panama mountain boasts the perfect climate. It is obvious why it is such a hit with expats and retirees. Great weather, lots of restaurants, and a walkable, small town feel.
Paul McBride joins the show to discuss Boquete’s enduring appeal and why you should consider it even if you want to be near a beach. We also talk about the real estate market, how the area has changed over the last decade, and where you should be looking for investment opportunities.
Additionally, Paul tells us about the costs to build a home as well as local market prices and why he has called Boquete, Panama home for over a decade.
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The Show Notes
Contact Paul anytime here.
Bernal Saborio
It’s no accident that Panama City, Panama, has become a top expat destination for people from all over the world. Just look at what the city has to offer:
- balmy climate
- clean drinking water
- stable government
- first world amenities
- reasonable cost of living
- high quality medical care
- rich cultural experiences
- quick access to rainforest, beaches, and mountains
Panama City is close enough to the U.S. to make travel into its Tocumen Airport a quick jaunt from Miami, and yet it’s also an easy gateway to further travel in Central and South America. If you want glamorous, big city life, you can have it there, but you can also connect with local people from indigenous cultures who can show you a simpler manner of living.
Either way, you’ll have the best of both worlds in Panama City. Here’s our expat guide to Panama City to help you make the jump into one of the best places on earth to reboot your life.
Tannaz
Daily Life: What to Expect
Panama City has the highest per capita income in Central America. With high speed Internet, modern global banking, and currency in the U.S. dollar, you might think for a minute that you’re in a big U.S. metropolis.
But unemployment is higher in Panama City than in the States, so rather than counting on finding employment there, it’s best to have your income lined up before you go, whether that’s working remotely or starting a business there. Panama offers numerous perks for business investors in the tourism industry, including fewer duty restrictions and income and real estate tax exemptions.
Life is a little slower in Panama, so plan on things taking longer than you’d expect in the U.S., such as completing household repairs, ordering utilities, or filing government papers. That’s an aspect of Latin culture that’s pervasive in Central and South America. The upside is that life is savored in Panama, and you can count on people taking the time to enjoy food, company, and entertainment.
Be aware, though, that no one arrives on time for social events, so don’t fret if you’re waiting for friends at a restaurant or they’re not at your door on the stroke of the hour. Like in most Latin countries, it’s nice to bring your hosts a little gift if you’re invited to their home – something like wine or candy is always appreciated.
And if you learn at least a little Spanish, it will make life infinitely easier for you in both business and social settings and will go a long way in dispelling stereotypes about arrogant foreigners.
Geoff Gallice
Residency and Cost of Living
While it’s a tad more expensive than the countryside, Panama City affords expats a very reasonable cost of living. Although utilities fluctuate with the price of fuel, you won’t have any need for heat, nor will you want to use air conditioning very often (most places don’t have it).
Panama City has a warm, moist climate much of the year, with a dryer period from January to April, and the ocean breezes keep it pleasant most of the time. Many expats get by with just Internet and a mobile phone, so you can kiss your land line and fax machine goodbye.
A couple can get by on about $1,500-2,000 per month, with about half the monthly budget going towards rent. While you may be spending close to what you pay in the States for a house or apartment, you’ll get far more in terms of square footage, charm, building amenities, and gorgeous views. Of course, you can always purchase property there too. Buying a home in Panama, with the help of a local attorney, is fairly straightforward and free of restrictions.
One of the hallmarks of Panama City is its top-notch health care. At the most expensive hospitals, such as the Johns Hopkins-affiliated Punta Pacifica, you can expect to pay about half the U.S. cost of medical treatment. And many other excellent clinics provide service for considerably less.
There are many visa categories for foreigners who want to live in Panama, but if you can take advantage of the pensionado visa, you’ll definitely want to do so. Offered to those in good health with no criminal records and a minimum income of $1,000 per month, the pensionado allows you to import a car to Panama every two years, import your household goods with no duty, and pay discounted prices at movies, restaurants, hotels, and public transportation.
Tony Mendez
The Expat Guide to Panama City Residential Neighborhoods
Panama City is a city of neighborhoods, and they are all quite different. While you should stay away from El Chorrillo, Santa Ana, and Chinatown due to safety issues, there are a number of residential areas that many expats find quite pleasing.
Balboa, Cerro Ancon, and Albrook are all neighborhoods in the former canal zone, including a one-time U.S. Air Force base that is now used as a domestic airport. The view from the top of Cerro Ancon is stunning, with 360-degree vistas of the city and the canal.
Bella Vista, Area Bancaria (the financial district), and El Cangrejo form a compact spot that could be considered one upscale neighborhood. One of the few areas in Panama City that is easy to negotiate on foot, this locale makes it easy to walk to its plethora of shops and cafes. If you’re not putting up visitors in your home, they’ll love the lodging choices in El Cangrejo.
If it’s high-rise glamor you want, you’ll find it in Marbella, Punta Paitilla, and Punta Pacifica. There, steel and glass towers are interspersed with modern shopping malls, and the coastline location provides beautiful views.
Rodrigo Gambassi
Fun Activities Around the City
Casco Viejo is another popular neighborhood that mixes residences in classic centuries-old architecture with lively entertainment and tourist appeal. It is currently undergoing a major gentrification and is another neighborhood best experienced on foot. Some other popular attractions include:
- Panama Viejo – ruins of the old Panama City
- Amador Causeway – a malecon connecting four islands near the Pacific side of the canal filled with restaurants and tourist spots reminiscent of Miami
- Parque Natural Metropolitano – a fabulous nature park only ten minutes from downtown
- The Panama Canal – not just for tourists
- Mercado de Mariscos and Mercado Publico – the seafood and adjoining farmers markets
If sports are your thing, there is world-class baseball and horse racing in Panama City too, as well as bike rentals on the Causeway. Dance clubs, bars, and pubs abound, from the most casual to velvet rope glitzy. Shoppers can always find something to please at any of the city’s galleries and mega malls or the smaller centers for handicrafts. Avenida Central is full of colorful bargains with real local flavor.
gil2594
Getting Around Panama City
Driving in Panama City is a lot like driving in the U.S. as far as rules and regulations go, but the traffic is considerably more congested. If you must drive, be aggressive but watchful and ready to stop on a dime.
Watch out for pedestrians – there are a lot of jaywalkers in Panama City – and never leave valuables in your car. There are street or parking lot spots with guards who will watch over your car for a small fee. Keep your doors locked and always carry a map with you, not that it will necessarily do much good on many of the unnamed streets in the tangle of downtown.
Taxis are a better way to go, and they’re very inexpensive in Panama City. For about $2, you can get around downtown, and $5 will get you out to the Causeway. Even cabs can have a difficult time with the lack of formal addresses, so try to give them as much information as you can about your destination. Be sure to confirm your price ahead of time, and don’t be surprised if you pick up another passenger during peak rush hours or rainy days.
Living in Panama City can be fantastic for expats who want the modern comforts of the first world with the cultural experience and lower cost of Latin America. Panama City has an active and well-connected expat community that can advise you on common questions and help you assimilate smoothly into the local culture.
For more information about living in Panama, be sure to check out our other posts and feel free to ask questions–that’s what we’re here for! We love living in the Latin tropics, and we want you to also!
Map of Panama
Panama Fast Facts
- Population: 3.8 million
- Typical temperature: Temperature typically varies from 72°F to 91°F
- Nearest airport with U.S. flights: U.S. bound flights leave daily from Tocumen International Airport
- Nearest U.S. consulate: Panama City
The recent attention Panama has been receiving as a great place for retirees points out why a Panama retirement is a valuable choice. For many baby boomers considering a move offshore, this tropical destination provides many options that other Latin American countries don’t offer.
With its close ties to the U.S., continued infrastructure improvements, and a vibrant historical and cultural atmosphere, Panama should be on everyone’s “short list” for retirement meccas. AARP has named Boquete, Panama as one of the top places to retire abroad. The growth in the real estate market in Boquete highlights the Panamanian potential as a long-term retirement or investment option.
Judy Chartrand
Why Is a Panama Retirement Such a Valuable Choice? The Reasons Are Below:
In the last several years, Panama has made a concerted effort to attract expats, especially retirees, to become part of Panamanian life. The results of this effort has definitely increased the extrinsic and intrinsic values of this Central American country as a retirement choice. Below are some of those highlights:
Panama Is the Complete Retirement Package
- Climate: Panama has a range of climate choices that can meet any retiree’s requirements. From the cool mountain temperatures of areas like Boquete and Santa Fe, to the tropical beachfronts of Panama City, to the island breezes of the Las Perlas and San Blas Island groups, finding that perfect blend of weather and temperature is far easier than in many other tropical locations.
- Culture: It is very easy to become immersed in Panamanian culture. The rustic towns, like David and Chitre, offer a welcome change from the larger urban setting of Panama City. The Azuero Peninsula, with towns like Pedasi and Las Tablas are widely recognized as Panama’s cultural and historical heartland that retirees are beginning to discover for themselves.
- Getting There Is Easy: Panama is easily accessible from the U.S. and Europe. With direct daily flights from fifteen U.S. cities, on international carriers such as United, Delta, American, and Copa, being able to fly to your tropical getaway is both affordable and easy to arrange. Domestically, Air Panama is expanding its service to new locations, such as Pedasi.
- Becoming a Resident Is Easier Than Ever: The Specific Countries Program that has been in place since 2012 has made it possible for holders of U.S., Canadian, and European passports to become residents within six to eight months. The process itself is relatively uncomplicated. Learning about the residency process and the straightforward requirements is just another part of understanding why Panama is a great choice.
- The Currency Is Familiar: Although Panama’s official currency is the Balboa, the country has been using the U.S. dollar as legal tender for all transactions for quite some time. Not having to negotiate currency exchanges or understanding how to convert the price of something into U.S. values not only is more convenient but also makes price comparisons easier as well.
- It Pays to Be a Retiree in Panama: Once you have qualified for the pensionado (retirement) visa, there are a lot of money-saving discounts that you can qualify for. Here is a partial list that clearly demonstrates how affordable retiring in Panama can be.
Magda Wojtyra
| Discounts |
| 50% discount on entertainment anywhere in Panama (movies, theatres, concerts)30% discount on bus, boat and train fares25% discount on airline tickets50% discount on hotels from Monday to Thursday25% discount on hotels from Friday to Sunday25% discount in sit-down restaurants
15% discount in fast food restaurants 15% discount on hospital bills (if no insurance applies) 10% discount on prescription medications 20% discount on medical consultations 15% discount on dental and eye exams 20% discount on professional and technical services 50% discount on closing costs for home loans |
Retirees are also entitled to a one-time tax exemption, up to $10,000, to import household goods. Additionally, there is a tax emption every two years for the purchase or importation of a personal vehicle.
Nelson de Witt
Panama Is a Great Place for Retirees to Invest and Prosper
Panama stands out as one of the very few Latin American locations where retirees can anticipate a strong return on their initial investment. Between a growing real estate market, favorable pricing, and active government support to make Panama an attractive place for expat dollars, the long-term potential for the growth of your retirement nest egg is strong.
- Increasing Housing Prices – Like most of the world, Panama’s real estate market suffered during the financial downturn of 2008. In the last few years the market has rebounded, making investing in property a solid proposition for financial growth and a good return on your initial purchase price.
While there are some areas where larger foreign developers have purchased large tracts of property based on the speculation of what they might be worth when fully developed, purchasing your retirement retreat can still be done for a reasonable price. The continued rise in property values will, in turn, add to the return you can expect when you decide to sell.
- Reinventing Yourself – Unlike its neighbors, Panama actively supports skilled professionals and investors who want to work and contribute to the Panamanian economical revival. Under the Specific Countries Program (mentioned above), obtaining a work permit is straightforward. The program is somewhat controversial, however, and checking with a skilled immigration attorney is an important step in the process.
- Favorable Real Estate Tax Structure – Property taxes in Panama are far less than those you would expect in the US. The tax basis is the value of the land and declared value of any improvements. The maximum tax rate is only 2.10%. Importantly, the government offers a generous property tax exemption for residential properties.
For properties whose value is $100,000 or less, taxes are exempt for 15 years; between $100,000 and $250,000, ten years and, for values above $250,000, five years. For most retirees, the prospect of not having to pay any property taxes for an extended period, translates into a tangible uptick on the money they will have to spend elsewhere.
Panama’s Value Combines the Tangible and Intangible Elements for Retirees
Taking the time to research the Panamanian potential should be a part of your retirement planning. As you look into what the country offers, visit and explore the various regions, and experience Panamanian life, you will truly understand the value that a Panama retirement can hold for you.
Panama is becoming increasingly well-known as a top eco-tourism destination. Viva Tropical sat down with Oscar Peña Sanchez, Manager of Explora Ya, Boquete’s top eco-tour and adventure travel company to find out why Panama consistently ranks above the rest.
BGI
Please tell us briefly about Explora Ya and the adventures you offer.
Explora Ya is an eco-tourism company dedicated to providing not only tours but “EXPERIENCES”; we are a company with a beautiful goal and that is to show the best of Panama and the Chiriqui province. We want to have a positive impact on our community and every single traveler visiting us.
We value the big effort travelers make by taking the time off and also spending their savings to enjoy and get to know the culture of Panama in general, so the best way we can honor that is to make sure they leave Panama with positive and amazing experiences!
Much of Panama has an exploding eco-tourism scene. Can you explain to our readers why Chiriqui is especially important?
This is a very good question. Chiriqui is one of the most important provinces in Panama for a number of reasons. Because of its location we can be in the mountains of Boquete drinking one of the best coffees in the world and then after a short drive we can swim in the warm Pacific Ocean. Chiriqui is also very rich when it comes to food production. We always have the highest quality fresh green veggies.
Chiriqui is a very dynamic place to travel and now even more since Copa Airlines opened a connection flight from Tocumen Airport. So our travelers, if they plan well, don’t need to stay an extra night in the city to make it to Chiriqui, which helps save them some time and money.
The variety of weather is another big part of why Chiriqui is the best province to visit or retire in many cases. Boquete for example is around 3,473 ft above sea level, so the temperature here is always fresh, but not too cold, and people feel very relaxed. The weather is pretty much always the same since we are near the Equator.
What are the most popular areas for eco-tourism in Chiriqui?
To be honest, all of them! From Boca Chica you can take a boat and visit beautiful islands with white sand and amazing snorkel spots. You can see sea turtles, colorful fishes, and humpback whales from the months of July until early October. Also there are many other islands like Boca Brava and near the Chiriqui Gulf, which is growing very fast in terms of eco-tourism.
Boquete for sure is the most beautiful boutique town. This town literally has almost everything: a nice amount of good restaurants, several trails for people to hike or do the best bird watching. We have a good amount of trained guides to ensure amazing experiences and spot the best of it.
The Baru Volcano is the Giant and center of attraction for many hard-core hikers or people who enjoy adrenaline by going up on a Jeep 4×4 or ATVs. We celebrate the famous Baru Eco-fest which invites a lot of people to challenge themselves to go up and down in a short time but under supervision of security like paramedics and emergency groups.
Generally speaking, Chiriqui has a little bit of everything for everyone. Other destinations are great beaches like Las Lajas, and also Puerto Armuelles which is located near the border to Costa Rica and is getting more attractive for travelers and expats. It has great fishing and also nice beaches to swim in.
Tell us how Explora Ya is adapting to Panama’s eco-tourism growth.
Explora Ya is progressively making sure we promote more activities that involve being in touch with nature, but in a safe way for our environment. We are aware of how we can have either a positive or negative impact on nature, depending on how developed the activities are here.
I do remember when I got here almost six years ago eco-tourism was not that explored and there were not many options. It wasn’t so easy to spot a Resplendent Quetzal, which is a rare bird originally from Guatemala that has found home in the mountains in Chiriqui. This bird can be spotted from Cerro Punta to Boquete in several trails, and we make sure this bird and all the rest of them are protected.
It’s very much ingrained in the culture of Panamanians to adapt and take ownership of the natural reserves and be part of the growth in Panama.
Finally, what advice can you give to future visitors to Panama and especially to those who are planning a visit to Chiriqui?
First of all, planning ahead always is very helpful regardless of which activity you are going to do or which place you’re going to visit. Make sure you bring the gear necessary to fully enjoy Chiriqui. It is also very important to do research on different tour companies and make sure you always have a guide who’s certified by SINAPROC (National Civil Protection). After that just enjoy the ride!
Explora Ya is an official ATP Licensed operator. Its tour office is downtown in the heart of Boquete. You can find out more about the experiences they offer by clicking here.
With all the attention being focused on this area being a prime location for retirees and expats, many people are asking: Where is Panama? Discovering the special qualities of this country and learning about the potential there is a great way to decide if Panama is a place you should consider for your tropical escape.
Long overshadowed by its neighbors, Panama is coming into its own as a great place to invest, retire, or simply visit. With a streamlined residency program, easily obtained work permits, and use of the U.S. dollar as currency, Panama has become a prime location for investment, retirement, or reinventing oneself.
ThinkPanama
Answering the Geographic Question: Where Is Panama?
Panama is located at the end of Central America between Costa Rica and Colombia. The country is small – approximately 772 miles in length and only 37 miles wide at the most narrow part; this is roughly the size of the state of South Carolina.
This isthmus is the connecting link between North and South America and, of course home to the Panama Canal which connects the Atlantic and Pacific Oceans. Being so narrow, it is possible to visit both Atlantic and Pacific coasts in a single day.
When you visit Panama’s highest point, Volcán Baru, you are actually able to see both oceans at the same time. This is only one of three places on the planet that this is possible.
Mónica Mora
What About Getting There?
Panama is probably the most “connected” country in the region. In addition to the main international airport, Tocumen International Airport in Panama City, there are over thirty smaller regional airports throughout the country that handle domestic travel as well as charter flights. There are also three heliports in the country and plans to build an international airport on the Pacific Coast are under discussion.
Most major cities throughout Latin America and the Caribbean have regularly scheduled flights into Panama. Combined with flights from the United States, Europe, and South America, getting to Panama is easier than you might have thought.
Phossil .
Time and Distance
Looking at Panama’s location in relationship to other countries and cities is a great way to answer the question: Where is Panama? Below are some major cities, listed by continent, showing the distance from Panama and the time to fly to this tropical destination.
North America
| City or Town | Distance | Flight Time |
| New York City | 2220.69 miles | 5.5 hours |
| Miami | 1161.42 miles | 3 hours |
| Houston | 1765.98 miles | 4 hours |
| Los Angeles | 3006.67 miles | 7 hours |
| Chicago | 2328.52 miles | 5 hours |
| Atlanta | 1,727.29 miles | 4 hours |
| Mexico City | 1498.63 miles | 3.1 hours |
| Washington DC | 2075.57 miles | 5 hours |
| Toronto, Canada | 2395.88 miles | 5 hours |
South America
| City or Town | Distance | Flight Time |
| Rio de Janeiro | 3304.46 miles | 6.75 hours |
| Quito | 637.98 miles | 1.5 hours |
| Buenos Aires | 3317.48 miles | 6.75 hours |
| Caracas | 875.10 miles | 2 hours |
| Bogota | 462.2 miles | 1.1 hours |
| Lima | 1437.8 miles | 3 hours |
Central American and the Caribbean
| City or Town | Distance | Flight Time |
| Managua | 526.1 miles | 1.25 hours |
| Guatemala City | 841 miles | 2 hours |
| San Juan | 1112.6 miles | 2.5 hours |
| Havana | 1021.1 miles | 2.25 hours |
| San Jose | 318.85 miles | 1.1 hours |
Europe and Asia
| City or Town | Distance | Flight Time |
| London | 5292 miles | 11 hours |
| Paris | 5386.38 miles | 11.25 hours |
| Amsterdam | 5489.6 miles | 11.5 hours |
| Madrid | 5093.1 miles | 10.5 hours |
| Tokyo | 8418 miles | 17.5 hours |
| Rome | 5912.2 miles | 12.25hours |
| Sydney | 8806.58 miles | 22.5 hours |
And for Those Truly Wondering Where Panama Is in Relation to Important Global Points
| City or Town | Distance | Flight Time |
| The North Pole | 5603 miles | 12 hours if there were flights |
| Antarctica | 6564.22 miles | 13 hours if there were flights |
Where Is Panama in Terms of Your Future?
Knowing how far Panama is from major worldwide hubs, and how long it would take to fly there from those distant locations, is only one part of answering the question: Where is Panama? Begin by doing some research about this special country and decide where Panama is in terms of your ideas for retirement or investment.
Even better, plan a trip to Panama and see for yourself exactly where it may be located in your plans for investment, finding a place to retire, or becoming a favorite vacation spot. Panama is so much more than just a spot on the map; it may well be the dream location that you have been scouring the map to discover.
Peter Chapman, Financial Times reporter and author of Bananas: How the United Fruit Company Changed the World, joins the show to discuss a fascinating history of Central America known by few. This is an intriguing story that has inspired many from the Latin region to speak up, from Che Guevara to Pablo Neruda.
He covers the rise of United Fruit Company, one of the most powerful companies in the world during the early to mid 1900’s, and its integral part in forming many of Central America’s nations. For 100 years the company controlled most of the region; they rigged elections and massacred people, all while building their banana empire.
Peter also talks about how United Fruit Company set the blueprint for multinational companies today.
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Show Notes
If you check out the lists of the best places to retire or live as an expat, you’ll see one location come up again and again: Panama City, Panama. Unlike many large metropolitan centers in Latin America, Panama City is a true first world city, boasting all the modern conveniences you would expect in places like San Francisco or New York.
You’ll be able to take for granted things like international banking, top-notch health care, and high-speed Internet in Panama City, while appreciating its proximity to some of the most beautiful natural spots in the world and two coastlines to explore. And you can still take advantage of the reasonable cost of living most people associate with the Latin Tropics.
Here’s a look at why Panama City, Panama, is such a popular expat destination.
Hectorlo
Welcome to a Vibrant, Modern City
Located at the western end of the Panama Canal, Panama City is known for being a rare first world Latin American city. With a population of just under a million people, its impressive steel and glass skyline overlooking the Bay of Panama could easily trick you into thinking you’re in Miami. In fact, if you read on, you’ll see that Panama City has much in common with the Miami of just a few decades ago, which bodes well for expats making it their new home.
The roads in Panama City are in great shape, and it is easy to find outpatient and hospital care there on par with U.S. standards. Numerous international corporations are headquartered there, and Panama City is also home to artists from around the globe. Each year Panama City hosts festivals celebrating jazz, dance, and film, and if you like to go out at night, there is no lack of entertainment.
Across the bay, close to downtown, visitors and locals alike can be found soaking up culture and cuisine in Casco Viejo, the old city. Built upon a seawall to defend the city against pirates, Casco Viejo is undergoing a major renovation, giving a facelift to historic buildings and providing a lively contretemps to the skyscrapers nearby.
Outdoor enthusiasts need look no further than than the outskirts of the city to find amusement. Water sports abound, and Panama is home to some of the best bird watching on the planet. Go east or west – either way you’ll hit some spectacular coastline worth making the focus of your next vacation. And if you’re a sports fiend, you don’t even have to leave Panama City to find soccer matches and golf courses to make your friends at home drool.
World Bank Photo Collection
Panama Is Growing
Panama was founded in 1519, and it has a rich history. But the real growth of Panama occurred after the end of the Noriega dictatorship and the return of the Panama Canal zone by the U.S. in 1999. Old U.S. military bases have been turned into stunning residential neighborhoods. While most of the rest of the world has languished during the recent financial downturn, the Panamanian economy has expanded by nearly 50%.
Panama is eager to attract commerce, expats, and tourists. A$5.25 billion renovation of the Panama Canal is expected to double its capacity. In the late 1990s, Panama City had only a few thousand hotel rooms; it now offers more than 15,000, with another 4,500 in the works, many with major chains.
You’ve probably heard that Panama City, Panama, is a popular expat locale. That it is, and not just with those escaping the U.S. The city is full of German, Chinese, and French influence, among others, and its international flavor is a fitting reflection of the canal that has linked two sides of the world for generations.
Food and hospitality are a common place to see this global influence, and it is here that the comparison with Miami in the late ’80s is often made. Urban Panamanian cuisine is still developing, but it will likely be a eclectic mix of the best of all world cultures with indigenous ones.
Panamanian food is not as spicy as what you find in other Latin American countries, and much of it features corn products. Seafood and fish are abundant, of course, with Panama’s ability to pull fresh catches from both coasts.
In spite of its tremendous growth, Panama is still geographically small enough that you can get a good taste of its varied topography and microclimates without having to travel very far. (You can still actually run into monkeys and anteaters within the Panama City limits.)
In the space of a few days, you can experience the big city, beach relaxation, and rural mountain life. Don’t like the climate where you are? Drive to the coast for a breeze or spend a few cool nights in the hills before heading back to the year-round heat of Panama City.
Steven Downers
Panama City, Panama, Has a Reasonable Cost of Living
Sometimes in Latin America, low cost of living comes at the expense of quality of life, modern amenities, or political stability – not so in Panama City. There you can find high quality living quarters that are within the means of someone subsisting on a pension or retirement benefits. A couple can live on about $1,500-2,000 per month in Panama City, and approximately half of that would be devoted to rent.
The more you can live like a local, the more money you can save. Eating foods grown nearby, using public transportation, and taking advantage of local entertainment, like in Casco Viejo, will not only make it easier on your wallet, it will truly enrich your expat experience. You don’t want to move to a foreign country just to replicate your life in the U.S. – you want to transplant some basic amenities in a new and exciting culture. This is the appeal of Panama City.
One of the amenities you won’t have to sacrifice is health care. Panama City has very cheap but high quality health care. Hospital Punta Pacifica, for example, is affiliated with Johns Hopkins but runs about 50% of the bill. Clinica Einstein in El Cangrejo is a smaller facility, but it offers most of the same services for half again what Punta Pacifica charges.
Irving Martínez
Panama Has Low Barriers to Residency
One of the things that makes the country of Panama so attractive to expats is how easy it is to move there. In fact, Panama has become so popular that it can sometimes take longer than expected to work out long-term visa applications, so it is wise to plan in advance as soon as you know what type of visa you want.
Panama has numerous visa options, some of which include routes to Panamanian citizenship, should you desire it. To dip your toe in the water, start with a 90-day tourist visa, which is renewable if you’d like to stay longer. There are also visas for retirement and business investment that require proof of financial stability.
Buying property in Panama is fairly straightforward. It is suggested to use a local attorney, however, to make sure you have all the laws covered and to help complete documentation that must be done in Spanish. The currency in Panama is the U.S. dollar (sometimes called a Balboa), so there are no exchange rate risks there.
Driving in Panama is quite similar to the U.S.:
- Traffic moves on the right side of the road.
- Drivers are required to have insurance.
- Driving while talking on a cell phone is illegal.
- Children must be secured in appropriate car seats.
A foreign drivers license is valid in Panama for 90 days, after which it must be converted to a Panamanian license. While traffic in Panama City can be as challenging as any large urban area, it can be nice to have a car to tour surrounding beach and mountain destinations.
Panama is in an ideal location, as it is an easy gateway to South America. But it’s not too far from the States either – just a couple of hours from Miami – which makes it easy for friends and family to pop down for a visit.
Panama City’s Tocumen International Airport has been recently expanded, and there are daily flights in every direction. To see if Panama City, Panama, is the right spot for you to unpack your expat life, grab a flight, book a boutique hotel, and spend a week exploring local life. You won’t be disappointed!
Thinking about investing in a second home? Retiring or going expat? Why not consider six spectacular places to live in Latin America?
Ingrid Khadijah
Why Should You Choose a Place to Live in Latin America?
For all the same simple reasons full-time expats and retirees flock to this part of the world. Simpler life. Tropical climate. Azure waters and gorgeous beaches. Jungle and mountains of unparalleled biodiversity. And growing numbers of flights from around the world.
You must be thinking, “Aside from the obvious, what else lures real estate investors to Latin America?”
Rich cultural heritage, pure beauty of nature, and simple lifestyle are truly magnificent. But Panama, Belize, Honduras, Ecuador, Costa Rica and Mexico have other ideal investment factors.
Why Do Investors Love Latin America?
These top emerging markets have healthy, growing economies. Construction and reconstruction are on the rise. Tourism, retirees, and expat numbers are steadily increasing. As a result, there are many fresh business opportunities. Generally speaking, there’s a robust need for rental properties.
Infrastructure improvements are a top priority. Internet access is typically a given. World-class hospitals and other modern medical facilities are available. Public transportation is solid.
New international airports are being built. Airline routes are growing. And visas and passports are easy to obtain.
Home prices are a real bargain. You can get a bigger house, a great location, and better views for so much less money compared to most other countries. You can find a modern two-story 3-bedroom/3-bath home with high-end finishes for $115,000.
The costs of living are low. In many places, a mere $2.50 will buy dinner at a local restaurant, and a couple can live really well on less than $2,000 per month.
Taxes, insurance, and utilities are low. And retiree incentives for expats are quite excellent.
So check out these six spectacular places to live in the Latin Tropics.
Cariberry
1. Ambergris Caye, Belize
“Best island in the world!” That’s what Trip Advisor readers said two years in a row. Ambergris Caye strikes a perfect balance between quaint and modern. High-rise buildings and traffic lights are non-existent. Locals, Latin immigrants, and expats from all over the globe traverse the island’s sandy roads barefoot or in a golf cart.
You’ll love exploring the diverse ecosystems around the island. From palm-lined beaches to mangroves, jungles, and reefs, you’ll never run out of things to do. Ambergris Caye is situated less than a mile from the second largest barrier reef in the world (Belize Barrier Reef). And one of the world’s top diving sites (Great Blue Hole). Scuba diving and snorkeling can’t get any better.
Can you imagine yourself sailing to the nearby cayes? Caye Caulker is a popular neighboring destination.
John Colby
2. Roatán, Honduras
Lonely Planet termed Roatán “pitch perfect.” The well-developed tropical setting offers an active lifestyle in a tranquil setting. Picture thirty miles of Carribean paradise with its own international airport, Juan Manuel Gálvez International Airport. Take your guests for a swim with the dolphins and sea turtles in Roatán’s warm Carribean waters.
Go sport fishing or kayaking. Explore shipwrecks, seawalls and Mayan artifacts. Scuba dive and snorkel in the nearby Belize Barrier Reef. And ferry to the mainland port of La Cieba in only an hour.
Take your land lover guests zip lining or ATV riding through the jungle.
Casey
3. Cuenca, Ecuador
Expats of all ages and from around the globe flock to Cuenca for its beautiful Andes mountain location. They’re lured there by Cuenca’s natural beauty, captivating colonial architecture, and 70-degree temperatures year-round.
Modern facilities and solid infrastructure make living here a charm. Among the breathtaking skylines, you’ll have the modern conveniences of pedestrian walkways, bike paths, underground parking facilities, and an excellent light-rail system.
State-of-the-art medical facilities combined with highly qualified medical professionals are added bonuses. And shopping malls, grocery and hardware stores, restaurants, and bars are plentiful in Cuenca.
Viva Tropical
4. Boca Chica, Panama
The Boca Chica economy is about to explode. Expansion at Enrique Malek International Airport (in David, Panama) will, for the first time, receive flights from major airlines around the world. A scenic 30-minute drive from the airport lands you in the serene little fishing village of Boca Chica. Picture rolling hills and secluded beaches. Sapphire waters and “emerald islands.” A so-called secret “tropical fantasy!”
How cool would it be to take a 10-minute boat ride to your home on Boca Chica Island? You’ll feel like you’re hours away from civilization. And you might even forget what day it is. But the truth is, it’s incredibly easy to get to.
There are no tourist traps on Boca Chica Island. Just unspoiled prehistoric nature. A place where locals and like-minded expats can still own a piece of heaven for a bargain.
Viva Tropical
5. Nosara, Costa Rica
Lonely Planet compared Nosara with Malibu and Oahu’s North Shore. Nosara’s surf-friendly beaches are some of the most beautiful in Costa Rica. Imagine dramatic rocky cliffs, tropical palm trees, and big expansive sand shores.
Internationally-recognized Nosara Yoga Institute made Nosara a popular travel destination with an enthusiastic health-conscious culture. Health food stores and organic markets are plentiful.
International schools with excellent academic and cultural programs make it ideal for raising a family.
Sean Savage
6. San Miguel de Allende, Mexico:
San Miguel is a UNESCO World Heritage Site. This interior city emerged from agriculture and industry to tourism and expat commerce. Although it has no beaches or blue waters, visitors fall in love with San Miguel’s cobblestone streets, rich history, and diverse culture.
The preserved colonial and Spanish architecture is truly breathtaking. And the “eternal spring” climate, combined with moderate costs of living and walkability, seals the deal.
You’ll enjoy roaming the vibrant art community and eclectic shopping venues.
Need you look further than these six spectacular places to live in Latin America?
Latin America provides an ideal lifestyle and perfect conditions for second-home investors, retirees and expats. Property bargains, benefits and amenities make your transition easy.
Take a trip down to see for yourself.
Pedasi, Panama is in the midst of a dynamic transformation. This little-known fishing village on the southeastern tip of the Azuero Peninsula, with a population of roughly 2000, has seen a surge in foreign investment that heralds a period of growth for both expats and investors.
Known for its local festivals, sportfishing, nearby pristine beaches, and natural beauty, it is also the home of Panama’s first female president, Mireya Moscoso Rodríguez de Arias. She has been instrumental in improving Pedasi’s infrastructure and making the real estate market more attractive for foreigners seeking to build new homes and invest in the region’s growth.
Zanzabar Photography
Pedasi, Panama – Historical and Cultural Heartland
The Azuero Peninsula was settled over 11,000 years ago and remnants of this pre-Columbian culture are still evident today. Pedasi, like other small towns in the area, tracse its cultural roots to this ancient civilization.
It was in 1671 that Pedasi and Las Tablas (a community just north of Pedasi) were formally established. Local history holds that the area became a choice for settlers after major fires in Old Panama City during the latter 16th century drove people to find safer locations. The region still has many colonial churches that reflect the beauty and richness of their Spanish heritage.
The waters around the peninsula have become known as Panama’s Tuna Coast. The abundance of yellowfin tuna, marlin, sailfish, and snapper in the area offer excellent year-round fishing. Restaurants in Pedasi will actually cook your edible catch to taste, something that you won’t find elsewhere in the region.
Playa Venao – Panama’s Surfing Destination
Just a short distance from Pedasi, Playa Venao has become one of the world’s premier surfing destinations. Recently, it hosted the DaKine ISA World Junior Surfing Championship and has become a favorite with wave riders from all over the globe. With the laid-back vibe, beach bars, and nightlife you’d expect from a surf-oriented town, Playa Venao can be a gateway to your own “endless summer.”
Come for Carnival, the Big Party in Pedasi
With over 500 celebrations and religious festivals each year, there is always something going on in and around Pedasi. Perhaps no festival has gotten as much attention as the Desfile de las Mil Polleras – the Thousand Pollera Parade. This is part of the larger regional Festival Nacional de la Pollera, based in Las Tablas in July.
The pollera is considered one of the most beautiful national costumes in Latin America. Consisting of a two-tiered skirt and a blouse, these elaborate garments have come to symbolize Panamanian culture at its finest.
Associated with Carnival, four days before Ash Wednesday, La Pollera is celebrated in full glory. The rich materials, brilliant colors and accessories (Tembleques) have become a centerpiece for Panamanian and Pedasi culture.
Isla Iguana and Cerro Hoya
Isla Iguana and the lesser known Cerro Hoya Nature Park are two locations where expats can get “up close and personal” with a wide selection of wildlife not found elsewhere in Panama. Five species of sea turtles, buffalos, sloths, monkeys, and even the occasional jaguar or ocelot can make visiting these natural preserves a once in a lifetime event.
Jason Cserny
Buying in Pedasi
The recent uptick in buying real estate in and around Pedasi has dramatically influenced property prices, even for undeveloped lots. With a number of luxury projects planned, it is not surprising that may foreign investors are pouring large amounts of money into the area.
For the single buyer, trying to make sense of the pricing can be both confusing and frustrating. It is necessary to look, not only what the value of your property might be, but also what the realistic value (and price) of the land you are interested in is in its current state.
Pedasi’s Market Stage Is Important
With all the potential that exists for investment and development in Pedasi, the Azuero Peninsula, and Panama in general, it is important to understand exactly at what stage the market is in terms of the prices that are being asked.
Think of a “market stage” as a description of where an expat location is in terms of land development. The price of property starts with its value to local residents and increases all the way to a full scale town complete with amenities.
Being able to identify what “stage” a particular area might be in can help you decide what to buy, what to build and, most importantly, what you should pay. As in any real estate market, prices are not always reflective of the value of a parcel of land in its current state. Remember that speculation on what property may be worth in the future might not support the price being asked today.
Being Selective Can Pay Dividends
The number of foreign investors buying large plots of land in Pedasi has increased dramatically in the last decade. The prices that many of these developers are asking are often in the “stage four” (established expat community level) range when, in truth, the area is only at a “stage two” or “stage three” level.
The remoteness and unsullied nature of Pedasi is both its biggest drawing card and major drawback. Being able to get building materials, and modern infrastructure amenities can be a challenge for investors who are working with a limited budget.
By being selective, you can maximize your potential in terms of finding property that is priced realistically. With the promise of a strong return on investment, Pedasi may just be the hidden tropical getaway you’ve been looking for
So What Are You Waiting for?
The best way to experience Pedasi is to go there. Plan a visit and see what this growing village has to offer; you won’t be disappointed.
Map of Pedasi, Panama
Pedasi, Panama Fast Facts
- Population: 2,000+
- Typical temperature: 86 Fahrenheit
- Nearest airport with U.S. flights: Tocumen International Airport (Panama City, Panama)
- Nearest U.S. consulate: Panama City, Panama
Viva Tropical Radio
Scott Nichols joins the podcast to discuss his trials and tribulations of building a house in Central America. He is currently in the middle of a building project and took the time to stop and share with us his progress and knowledge about all things building in Latin America.
He and Josh tackle the topics of:
- How to find a builder
- What to know before you design a house
- Why certain materials are more expensive
This episode is a must-listen for anyone who is considering building a house in the Latin Tropics for living or investment.
Listen to the show
You can listen to the show using the player above or grab it and listen on the go via one of the following options:
- Click here to download the mp3
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Panama is starting to come into its own as a prime expat destination. For those seeking to truly become part of the Panamanian lifestyle, Santa Fe, Panama can be your bridge to traditional village living with stunning natural surroundings.
Santa Fe Bridge
With increasingly favorable changes in residency and investment laws, the government is actively courting expats seeking new opportunities. Whether your ideal escape is a rustic retreat in the jungle or a place by the ocean, it can be found here in beautiful Panama.
Santa Fe, Panama Combines Shades of the Past with Potential of the Future
The Santa Fe region has, literally and figuratively, been a gold mine since the Spanish under Captain Francisco Vázquez conquered the area in 1557 in order to search for the yellow metal. In fact, gold is still mined in the area today.
During the 1557-1559 period, Vázquez founded several towns including Santa Fe, the oldest settlement. In the early 1600s, settlers from Santa Fe and Montijo established Santiago as a kind of communication outpost; ironically, today Santiago has surpassed the community that originated it in size.
Largely unknown outside of the country until the late 1960s, Santa Fe became a focal point of a peasant’s revolt led by a priest, Jesús Héctor Gallego Herrera. The ultimate result was that Santa Fe was finally connected by paved road to Santiago and the Pan American Highway, making access to the world at large available.
Today, Santa Fe still retains all the best elements of rustic life in Panama. With a population of roughly 3200, the natural beauty and abundant flora and fauna are a magnet for expats needing a more basic and relaxed lifestyle.
Falls
Experiencing What Santa Fe Offers
Nature lovers have found that this unsullied village is the perfect gateway to the Panamanian highlands. The national park surrounds Santa Fe in three directions covering nearly 320 square miles. Nature hikes and tours can delight expats who want to experience the over 300 varieties of birds along with other creatures of the region.
There are a number of waterfalls nearby that can be explored. For the more adventurous at heart, the fabled Mosquito Coast of the Caribbean is only 60 km distant.
There is also a well-known and loved organic farm that gives the concept of sustainable living a fresh meaning. Chong and Maria’s family farm is a favorite among locals and expats alike and provides the opportunity to see how organic farming works.
Café Tute is a local coffee roaster that is run by the town’s farming cooperative. Tours of coffee plantations and the factory are a great way to gain appreciation for the ubiquitous breakfast beverage.
Flower Power
Santa Fe is known throughout Panama for the beauty of its over 300 varieties of orchids. Each August, expats can see the best of these stunning flowers at the Exposición de Orquídeas held at the Feria (Farmer’s Market) of Santa Fe.
Why You Should Consider Santa Fe As Your Expat Destination
There are many reasons to explore Santa Fe as a possible location for retirement or investment. Some of the more compelling ones are listed below:
Affordable Cost of Living
Perhaps one of the most attractive aspects of living in Panama is the cost of living. Smaller communities, like Santa Fe, are extremely affordable; particularly when compared to larger cities, such as Panama City.
Rents, even in the center of town run under $1,000 per month. Similarly, utilities for basic services such as electricity, water, heat, and garbage may be as little as $50 to $100 per month. Importantly, because of its location in the mountains (500 meters-1640 feet ) cooler temperatures translate into less use of air conditioning, keeping electric costs down.
With more expats arriving all the time, the infrastructure is also improving. Internet access and cable television are now available (and reasonably priced) along with improved telephone and cellular services.
There are also a number of discounts offered to holders of the pensionado (retirement) residency. Everything from travel, entertainment and even medical expenses are reduced for expat retirees, making life even more affordable.
Buying or Building
The area in and around Santa Fe is seeing a dramatic increase in real estate activity similar to that of its neighbor to the west, Boquete. At present, there are not a lot of developers in the area but, given the popularity Santa Fe is gaining, that may not be the status quo for long.
As might be expected, prices for lots and existing structures are still on the low end. The promise of increased tourism to the region certainly makes the idea of investing, either in a purely commercial venture or as a rental part time, very attractive.
Money Does Talk, and It Speaks American
Although the Balboa is the official currency, the U.S. Dollar is the only paper money in Panama (Balboas are coins only). Since the dollar is freely used in daily transactions, expats don’t have to worry about exchanges or calculating prices.
Santa Fe, Panama May Not Be Perfect for Everyone
Understanding some of the challenges of living in a small Panamanian town is important before making that leap. Expat life can be rewarding but not without some “speedbumps” along the way.
The language issue is always an important factor to examine. Like other smaller communities throughout Central America, English speakers may not be as common as in major centers. This may pose a problem for some expats seeking to become part of village life.
Finding modern items, such as electronics and appliances may involve a trip to one of the larger cities. If having the kind of shopping access that is found in the U.S. is necessary, giving serious thought to relocating to Santa Fe is strongly recommended.
Lastly, since there is no airport in Santa Fe, the closest connection by air can be found in David, some 130 miles west. David does have regular flights on Air Panama to and from Panama City. As a consequence, a lengthy drive will be involved even before making the flight.
Alternatively, there are buses, private shuttles, and rental cars that can get you from Panama City to this mountain location. If a long ride doesn’t fit your tropical dream, this may be a stumbling block as well.
Go There
Sometimes there is only one way to know if the expat “shoe” is going to fit. Visit Santa Fe and try traditional Panamanian living on for size.
Map of Santa Fe, Panama
Santa Fe, Panama Fast Facts
- Population: About 3200
- Typical temperature: Average temperature is 85°F
- Nearest airport with U.S. flights: U.S. bound flights leave daily from Tocumen Airport.
- Nearest U.S. consulate: Panama City
One of the biggest considerations for expats seeking to buy their retirement or getaway home in Latin America is the taxes on real estate. Comparing property taxes of the most popular destinations for expats is an important step to deciding the best location for your tropical retreat.
Once the decision is made to become an expat, finding a home in paradise will involve some research. Looking at the unique qualities of each country and the properties available is a great way to begin your journey.
Tropical House in Paradise
Comparing Property Taxes in Latin America Country by Country
Countries in Latin America have widely different approaches as to what real property should be taxed and when. Similarly, the calculations of property taxes can be confusing for expats trying to choose which location might be a good fit for their budget.
What follows is a brief overview, by country, of the tax structure for real property. This comparison will also include any taxes imposed at the time of sale or transfer of title as well as when payment of these assessments are due.
Anoldent
Belize
Belize has a fairly straightforward approach to property taxes. For residential property, the tax rate will be between 1% and 1.5% of the value as set by the Department of Natural Resources. These are payable each year by April 1st at any Lands Department office. When looking for your Belizean retreat, making this calculation is easy.
Residents in Belize City can take advantage of a 10% discount if taxes are paid by March 31st. There is a 25% discount on property taxes for Senior Citizens (over 65) that certainly is a great incentive for expat retirees.
Investors and developers of large plots of undeveloped land (parcels over 300 acres) are subject to a Speculation Tax. This tax is computed based on 5% of the undeveloped value of the property.
When a title is transferred, a transfer tax is collected as part of the buying process. There is no tax for values under $10,000; for values in excess of that amount, the tax is a flat 5%.
Didier Baertschiger
Costa Rica
For all of the attention and growth that Costa Rica has experienced in the last decade, property taxes still remain as some of the lowest anywhere, including the U.S. The tax rate is 0.25% of the registered property valued as determined by the local governments or municipalities.
Some of the very large and high-end properties have been subject to a luxury tax based on such items as size, custom furnishings, and fixtures. These rates are still surprisingly low; in 2013 it was estimated that that this tax was in the range of 0.1% to .25% of property value.
Changes to the transfer tax of 1.5% may impact some buyers. While the percentage has stayed the same, the basis for the calculation (property value) cannot be less than the highest recorded fiscal value. Fortunately, this amount will usually be less than the market price of the parcel. With low tax rates, finding your home in the land of Pura Vida is still a great option.
Casey
Ecuador
Ecuador has some of the lowest property taxes in Latin America. The tax rates are progressive from 0.025% to 0.5% of the value as assessed by municipal officials.
These values are considerably lower than the purchase price – often by as much as 25% to 75%. As a result, it is rare to pay over $400 in annual taxes.
There are also deductions and discounts that can appeal to expats. Homeowners over the age of 65 only have to pay half the amount of the tax assessed.
Additionally, deductions for mortgages to purchase or improve the property are possible. Ranging between 20% and 40%, these must be requested and cannot exceed 50% of the value of the property. Ecuadorian real estate may provide some of the most affordable options in the region.
Waterways
El Salvador
El Salvador is unique in that there is no property tax assessed for owning real estate. Although there is no annual assessment, when property is transferred, a transfer tax is triggered.
The tax, paid as part of the buying and selling process, equals 3% of the value over $28,571.43 of the purchase price. Non-residents also are subject to a 25% capital gains tax when selling property unless the sale occurs within three years of taking possession of the property.
The El Salvadoran government is considering a tax reform package that would include a tax on property that does not have any productive function except for private leisure or recreation. This “luxury tax” would be assessed at the rate of 1% of the value over $350,000 even if the property has not been developed.
Whether or not this tax will be enacted is uncertain. Regardless, the great majority of expats will not be impacted because of the high dollar threshold of the assessment. Low prices enhance the attractiveness of the selection of properties available.
Stefano Ravalli
Guatemala
Guatemala uses the cadastral value of real property to calculate the tax owed. The word “cadastral” refers to the extent, value of, or ownership of real property and is used widely throughout Central America.
Taxes are calculated in local currency (the Guatemalan quetzal) by local authorities. When converted to U.S. dollars, it becomes apparent that these are quite reasonable for the great majority of expat residents. Below is a chart showing the tax rates:
PROPERTY TAX |
|
| TAX BASE, GTQ (US$) | TAX RATE |
| Up to 2 million (US$255,428) | 0% |
| 2 million – 20 million (US$2,554,278) | 0.20% |
| 20 million – 70 million (US$8,939,975) | 0.60% |
| Over 70 million (US$8,939,975) | 0.90% |
| Source: Global Property Guide | |
As can be seen, there is no property tax owed on properties valued under $255,428. The taxes are due annually and are paid to local municipalities where the property is located. Searching for properties under this dollar amount may be easier than you might imagine.
Chamo Estudio
Honduras
Honduras has one of the few property tax laws that permit 12 monthly payments instead of just a single annual amount. The tax rate itself is based on value assessed by the municipality and can be calculated at $3.50 per every $1,000 of assessed value.
For example, a property value at $100,000 would have a yearly tax of $350.00. Spread out over twelve monthly payments, each installment would be for $29.16. Buying property in Honduras with the ability to spread out yearly taxes is an attractive prospect.
As a result of new tax reforms that went into effect on January 1, 2014, property transfers carried out by nonresidents are now subject to an increased 4% (previously 2%) withholding tax over the transfer value to be withheld by the acquiring party.
One important feature of the Honduras tax scheme is the incentive program for projects or plans that would increase tourism to Roatan. Under this program, property taxes may be given a 20 year exemption. This is a powerful incentive for investors looking for a location to develop and build.
Chris Goldberg
Mexico
Mexico was the first Latin American country to attract expats. The older expat enclaves, such as Puerto Vallarta, have demonstrated the potential for living and investing in Central and South America. Mexico still has a great selection of properties and lots to interest expat buyers.
Property taxes in Mexico vary from state to state. Each state’s tax department sets the assessed value and the tax rate can range from 0.05% to 1.2%, depending on the property location. Other variables such as whether the lot is improved, if there is poor access, and if it is only used seasonally also factor into the assessment.
The assessment itself is done at the time of sale or transfer and will remain the same until the property is sold again. The taxes are due at the beginning of the year although the tax amounts are not available until mid-January of the year they are due. Since tax bills are not sent out, it is up to the property owner to go to the tax office with a previous bill to obtain the current one.
Payments can be made in six installments during the first ten days of every second month; ( i.e. January, March, May, July, September, and November). Failure to pay the taxes when due can result in steep penalties; in some cases as high as 3% for every month the payment is past due.
Mexico also charges an acquisition tax on every transfer of real property regardless of whether it is through a sale, donation, trust, or other method. The rates can range from 2% to 3.3%, again varying by state and is owed as part of the transfer process.
Daniel Fajardo Valenti
Nicaragua
Nicaragua has, perhaps, the easiest property tax scheme in Latin America. The tax is a flat 1% and are calculated at 80% of the cadastral value of the property (land, buildings, and permanent improvements) as assessed by the local office.
In the city of Managua, the calculation is slightly different. There the figure is based on 80% of the cadastral value LESS 40,000 Nicaraguan Cordobas (NIO); roughly equaling $1,624 in U.S. dollars.
Since there is no up-to-date national registry for property values, property taxes are less important than in other locations. With a lack of proper records, many small communities do not even collect the taxes which has led some to view paying them as a voluntary, rather than mandatory, act. Many of these smaller towns and villages have attractive and unique properties that are worth a look.
There is a 30% capital gains tax assessed on property sales. Again, this is based on the land value and not the sale price.
Bocas Del Toro
Panama
Panama is unique among the countries in the region in that the property taxes are national and are collected by the Ministry of Economics and Finance. The tax rate is a maximum 2.1% and is based on the assessed value – usually the declared value in the original sale documents. Expats are increasingly interested in the homes and lots available here and the possibilities that Panama offers new arrivals.
The calculation is based on the value of the land plus the declared value of any improvements made. If a transaction is made for an amount in excess of this amount, that will automatically increase the value of the property for tax purposes. Payments can be made in three installments: April 30th, August 31st, and December 31st.
Property taxes are graduated depending on the assessed value. Below is a chart showing this breakdown: Value of the property Property Tax Rate US$ 0.00 up to US$ 30K (exempted) 0% US$ 30K up to US$ 50K 1.75% US$ 50K up to US$ 75K 1.95% US$ 75K and above 2.10%
Condominiums, however, use a slightly different formula:
Property Tax Rate for Condos:
Value of the property Property Tax Rate US$ 0.00 up to US$ 30K (exempted) 0% US$ 30K up to US$ 100K 0.75% US$ 100K and above 1.0%
The 20 year exemption on property taxes that was so attractive to investors ended in 2009. That program has been replaced by a revised set of exemptions:
- 15 years Up to US$ 100,000.00
- 10 years From US$ 100,000.00 to US$ 250,000.00
- 5 years Above US$ 250,000.00
- Commercial Use/Non-residential improvements have 10 year exoneration regardless of the property value
Lastly, Panama does have a transfer that is the greater of a) 2% of the total sale price or; b) the declared value of the parcel plus the value of improvements plus 5% for each year the property was owned.
A Brief Note on U.S. Property Taxes – Paradise Is Cheaper!!
While the various property tax schemes throughout these tropical locations may seem confusing, there is one important element to keep in mind: U.S. property taxes are higher!!!
22 of the 50 states have median property taxes in excess of 1%. New Jersey is the highest at 1.89%. When combined with other property-related taxes and fees, the overall cost of property ownership far outstrips most of the Central and South American locations expats desire. In a very real sense, paradise is cheaper and living there is easier now than ever before.