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 DGI pages we read do not state the capital gains rate or explain the advance payment. Two Panamanian law firms do, and they agree on the shape of it. Kraemer & Kraemer (February 2026) describes a 2% transfer tax and, for the seller, either 3% of the sale price or cadastral value (whichever is higher) or the alternative of 10% of the actual profit. Grimaldo Prestán (reviewed September 2026) describes a 10% tax on the taxable gain with a 3% advance on the sale or cadastral value, and says the seller may assess the real gain instead, with evidence of cost and allowable expenses. Both say the seller generally bears these taxes unless the contract says otherwise.

Where they differ is detail, which is exactly where cases differ. Kraemer & Kraemer puts the transfer tax base at the higher of cadastral value or price; the DGI page says land or cadastral value; Grimaldo Prestán does not spell out the base. Whether the 3% is final or only an advance, and which route is better, depends on the seller's acquisition cost, documents and tax status. We cannot tell you which applies to a property we have not seen.

Please read: this is general information, not legal or tax advice. In Panama the right treatment depends on the specific facts of each transaction, and no two cases are identical. A tailored briefing and the right roadmap for your situation can only be built in a Legal Consultation with a lawyer, once your facts are on the table.

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.

New since September 2026: first sales of new homes (Law 546)

The 2% transfer tax above is the general rule, and one category of sale now has its own regime. Law 546 of August 31, 2026 (Gaceta Oficial Digital No. 30601-B, in force the day after promulgation) rewrites article 4 of Law 106 of 1974. The first sale of a new home is exempt from the transfer tax on the first $120,000 of the tax base, as long as the sale is formalized within two years of the occupancy permit. Between $120,000 and $200,000 the tax applies only to the part above $120,000, at a graduated 0.5% to 1.8%; above $200,000 the first $120,000 stays exempt and the rest follows the general regime.

Three details that matter at closing. The seller must state in the deed, under oath, that the home is new, that this is its first sale and the date of the occupancy permit. Sales formalized before the law took effect follow the old rules, and for homes whose permit was issued earlier, the transitional article allows the benefit if the sale is formalized within 30 months of the permit. The article also declares void any contract clause that makes the buyer pay, reimburse or assume the transfer tax that legally falls on the seller; the sentence sits in the article on first sales of new homes, and we have found no official guidance on whether it reaches other sales. Sources: Gaceta Oficial Digital No. 30601-B (law text, read October 16, 2026) and the Ministry of Economy and Finance announcement of August 31, 2026.

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.