How to Retire in Panama and/or Buy a Second Home in 5 Steps

1. Visit Panama to see for yourself what it is all about.

There are two ways to visit Panama to explore a property purchase-on your own or with a tour company that specializes in property tours. Do-it-yourself requires a sense of adventure and a willingness to put up with some glitches but if you purchase a good country guide, you can get around the country yourself by plane, taxi and bus just fine. Speaking Spanish is nice but not necessary. We don’t recommend driving on your first trip. The Lonely Planet Panama Guide or the Hunter Panama Guide are excellent, very complete country guides and available on Amazon.com.

For worry-free and hassle-free property searching or if don’t enjoy do-it-yourself travel, there are excellent tour operators that specialize in property tours at reasonable prices. Below find a list of companies specializing in property tours and related services.

2. Talk to others beside those selling property and do your internet research.

Panama is a small country –just like in a small town, word gets around quickly if something or someone is not trustworthy. You will hear varying opinions on many things, but will be better informed in coming to your own conclusions.

3. Use licensed real estate companies and when ready to purchase, hire a reputable lawyer for the sales transaction.

When you have found the property you like, hire a reputable lawyer who specializes in real estate and immigration services. Visit our Real Estate and Legal Services pages for a list of real estate companies and law firms that provide excellent services to foreigners.

4. Figure out which type of visa is best for you, with your lawyers help.

There are two simple visas- the retirement visa and the home buyers visa.

Retired Persons Visa: If you are already retired and can show an income of $500 per month and an additional $100 for dependents you can apply for a Pensionado ( Retired Persons) Visa.

Home Buyers Visa: If you buy a home for $200,000 or more, no matter your age, you can get a residency visa.

You must hire a lawyer to get your visa. Expect to pay around $1000 in lawyers fees plus government fees depending on the type of visa. Below is list of reputable lawyers specializing in real estate and immigration.

5. Get a visa or opt not to get a visa.

Another option is not to get a residency visa just yet. You can buy a home in Panama and enjoy all the rights a Panamanian does on just a tourist visa. Your tourism visa is good for up to 180 days. After 180 days, you have to make a short trip to another country and return. Many people come and go like this for years.

General Requirements for All Panamanian Visas:

1. Certificate of AIDS test- You must be free of AIDS. You can get the test done in Panama. for $25.

2. Certificate of Good Health- A Panamanian doctor can write this letter or your American doctor.

3. A police report from the town you most recently lived.( If you are a convicted felon you’re not eligible.)

GENERAL PROPERTY BUYING INFO

This info is taken from a US Consular Memo

There are two very different kinds of real estate in Panama: titled property and "rights of possesion property".

Titled Property: The process in the purchase of titled property is similar in concept to that in the U.S.. Panama has a reliable Public Registry system, and this office maintains a record of all titled properties throughout most of Panama.
Information regarding titled properties is readily available through the Public Registry, and is a fairly routine process to undertake through due diligence on a lot or property (finca). Your attorney can issue you in writing an abstract title of the land.

Rights of Possesion Property: The purchase of "rights of possession" (derecho posesorio) or concession rights is an entirely different process. Rights of possesion is not titled land. On the mainland it may be converted to titled land. If the property is near the coast or on islands it currently cannot. However, the government is currently working on legislation to make Rights of Possesion property easier to convert to titled land including coastal and beach properties.

The Two Steps to Real Estate Transactions in Panama: Real estate transactions are usually done in two steps. The Promise to Purchase Agreement is a preliminary contract between the buyer and seller, and gives the buyer time to work out financing and due diligence before committing to buy. It also can be used to get the seller to meet certain commitments and conditions before the sale occurs, and list "contingencies" under which the buyer can be released from obligation to buy if questions are not resolved, or if hidden defects are later found. Only when the buyer is completely satisfied should the sale close.
If the buyer is satisfied, a Purchase and Sale Agreement (or Contract) is made in the form of a public deed and registered at the Public Registry of Panama, at which time the buyer becomes the owner.

Paying: The safest way to pay is by an irrevocable letter of payment issued by a bank, contingent on receiving from the seller proper title to the property. The bank holding the funds issues the irrevocable letter of payment to the seller and pays it as soon as it is presented with the registered public deed transferring title to the buyer. The buyer often opens a bank account (or gets a mortgage) and then formally requests that the bank issue this letter, which is considered to be an appropriate form of payment. If the buyer does not obtain a mortgage, he pays the bank for this service.

Paying Real Estate Agents: Real estate agents normally get paid only when the sale closes. Valid contracts are only in Spanish and once signed are legally binding documents, and you should ensure that you have read and understood them completely before signing. While a good real estate agent can help you through the steps of buying, he cannot provide you with legal advice; an attorney does that. Escrow and title insurance are not generally used or needed in Panama, as such functions are performed by the bank and Public Registry, as described.