Documents required for a sale
We recommend you to work with our team in VICTOR CONSTANTE REAL ESTATE . Where we will always be aware to guide you from beginning to end so that you are fully aware of all the processes, and have peace and quiet in your paperwork.
The procedures of buying and selling a property in Panama, (no matter if its an apartment, house, office, commercial space, building, land or beach property) entail a series of necessary documents that the seller has to provide to the buyer in order to prepare the public deed and its final transfer. Transfer that needs to be duly registered in the Public Registry.
Among them are 106 and 107 forms (Transfer of property tax and capital gain tax), certificates of receipt of said forms, their payment slip, paz y salvo de inmueble, paz y salvo de mantenimiento, Paz y salvo de IDAAN (Instituto de Acueducto y Alcantarillado nacional), minute of sale and minute of cancellation (if the property has a mortgage). In the event that one of the parties (seller or buyer) is a corporation, a certificate of shareholders is required that authorizes the sale or, if applicable, the purchase of property in Panama; Paz y salvo de Tasa Unica of the corporation is also necessary at the time that the property will be registered in the Public Registry.
They are simple documents to obtain but require certain procedures in government offices that can take time and patience. Many sellers and buyers are not aware that in Panama, when buying a property (be it apartment, house, commercial spaces, office, land, building and / or beach property) it changes ownership automatically in Public Registry when completing the registration of the deed. However, it is not automatically updated in Catastro or in the DGI (Direccion General de Ingresos). Always good to be well advised and to apply the change in these institutions after having acquired a property.
Second hand Properties or purchased directly from a Promoter, require that the exemption (if aplicable) be applied to the improvements, which is not done automatically. It is the responsibility of the buyer to request the exemption on improvements with the DGI (Direccion General de Ingresos). It can be asked for later, but it is good to do it immediately since if it does not apply, the state will be charging property taxes on the improvements, when it is not necessary to pay them since it is exonerated.
The value at which the buyer acquires the property, whether it is a first or second hand property, also has to be updated. Since if not doing so, the property values will be maintained based on those already registered and not the new amount on which one acquired the property. In this case the DGI (Direccion General de Ingresos) will be calculating taxes based on the values that already existed. Owners might then have the surprise, when they sell that they owe incorrect sums of money since they have not been charged based on their value.