If you buy property in Panama from abroad, the part of the process that surprises people is not the price. It is the paperwork that has to be finished before the deed can be registered. Panama's tax authority, the DGI, publishes the forms involved. We read them on October 5, 2026, and this piece sticks to what those pages say. Where they stop, we say so.

What the DGI pages confirm

  • Two forms, filed by the seller. The DGI's property-sale page states that at the time of a sale it is the seller who must file Forms 106 and 107 (DGI, sale forms), and its real estate FAQ adds that the seller must be registered with the DGI as a taxpayer (DGI, real estate FAQ).
  • Form 106 is the property transfer tax (ITBI). The DGI's page for it applies the tax to taxpayers who transfer real estate, at 2% on the land or cadastral value, payable within the same calendar month as the declaration. It cites Law 106 of 1974 (amended by Law 31 of 1991), Law 6 of 2005 and Law 5 of 2006 (DGI, Form 106).
  • Form 107 is the capital gains declaration. For real estate, the DGI says it must be filed and the tax paid before the sale is registered in the Public Registry. The legal basis it cites is Articles 701 and 701-a of the Fiscal Code and Laws 6 of 2005, 18 of 2006, 49 of 2009, 33 of 2010 and 28 of 2012 (DGI, Form 107).

For a buyer, the practical point is the order. Tax first, registration second. A sale whose forms are not filed and paid does not get to registration, so the deadline sits on the seller but the delay lands on you.

What the DGI pages don't tell you

The pages we read do not state the capital gains rate or explain the advance payment. A Panamanian lawyer's summary, published October 23, 2024, says sellers pay 10% on the profit and that 3% of the sale price is withheld as an advance on that tax (Roxana Rangel V.). That is a secondary source, so treat the 10% and the 3% as the figures to confirm with your own lawyer, not as something the DGI pages above prove.

The same summary describes the transfer tax differently from the DGI page. It says buyers pay it and that it is 2% of the property value or the sale price, whichever is higher. The DGI page we read says 2% on the land or cadastral value and puts the filing on the seller. We have not seen a primary source that settles the base, and contracts often allocate the cost by agreement regardless of who files. Whoever is advising you should tell you in writing which base applies to your property and who bears it.

What to ask for before you sign

  1. Proof that the seller is registered with the DGI as a taxpayer.
  2. A clause saying who bears the transfer tax and the capital gains tax, and how the advance payment is handled at closing.
  3. Confirmation that Forms 106 and 107 will be filed and paid before registration, with the registration date tied to that.

What this doesn't cover

This is not a full closing-cost breakdown. Notary, registry fees, legal fees, ITBMS on services, and the annual property tax are separate items, and we have not summarized them here. Tax treatment of the same sale in your home country is also a separate question.

Why we're publishing the gap

Most articles on this topic state one confident number for every item and move on. We would rather tell you which numbers the tax authority's own pages support and which come from secondary summaries. Your closing should rest on the first kind.