September 4, 2011
This month we take a look at the unknown details of Panama’s 20-year tax exoneration as well as a new fascinating type of medical tourism keeping Panama in the spotlight. And while September marks the middle of the rainy season for us here, but it rarely rains enough to ruin a vacation! Flight and hotel deals are abound right now which makes it a great off-season time to come visit.
We are proud to announce that we can now offer our clients country-wide agency coverage! Whether you are still planning your first trip to Panama or are a long time resident looking to sell, our agency is now in a position to handle any real estate inquiry, from Bocas to Boquete, and Pedasi to Panama City! Our recent alliance with Tom Brymer in Boquete and Mark Johnson in Bocas means that our high standards of agency representation now extend across the entire country of Panama.
**We’ve got 4-5 properties in the city and beach areas with VERY motivated sellers. To get on our monthly “deal list” mailer Sign up for Kent’s Picks by clicking here**
This newsletter is currently being read by over 5,000 subscribers. We cant thank you enough for your continued support and referrals!
Cost of Ownership in Panama
Comparing apples to grapes
Why buy a beach condo in Panama when you could buy something just as nice for less money in a place like Miami or Phoenix? This month, I’d like to address the costs of ownership here in Panama.
There is no sure thing in this world except for death and taxes. Lets go ahead and add HOA dues to that list, if you are a condo owner at least. Whether you refer them as home owners association fees or common area maintenance charges (CAM’s) is beside the point: they are a both a blessing and a curse, and they can make or break an investment.
In Panama, on average, you are looking anywhere from $1.00 – $2.00 per square meter, or roughly $.09 – $.18 per square foot to maintain a condo that has a pool, gym, racquetball court, 24 hour security, elevator maintenance, landscaping, putting green and any and every other possible amenity you can imagine. If you’re lucky, you also have a full time concierge that, in the case of our building, will also wash your car for $3.00 and fix your toilet for $5.00. That means for an average two bedroom/two bath oceanfront condo, 1200 square feet you’re looking at less than $200/month.
Combined with the tax savings we are going to address below, that savings adds up over time and more than makes up for any small front side difference on price.
With the existing 20 year tax exoneration, property owners are not required to pay any taxes for 20 years after the date which the occupancy permit was issued. If your condo is 8 years old, that means you have 12 years left of paying no property taxes. Here is what you may not already know: The 20 year property tax exoneration, for the time being, is a thing of the past as of December 31st of this year.
Existing properties will still be exempt based on the formula above, however new properties will be subject to a sliding scale of from anywhere from 5-15 years of exoneration. If you are on the fence about picking up something in Panama, now is a good time to start seriously mobilizing to lock something in before the property tax window closes.
A few other key points regarding ownership costs and taxes in Panama
-If you are a current property owner and are even SLIGHTLY considering selling, make sure your property already has an existing tax exoneration filed. This can cause an unnecessary delay, so jump on it now.
-You will still have to pay a land tax on your property regardless of how old it is. I have not seen any type of calculation on this because the law is relatively new, but we haven’t seen tax amounts any more than $1,000/year for condos in the city or the beaches.
-Once the taxes do kick in on your property, you have two different fee structures you can follow when determining the tax amount. Boring stuff for a newsletter, but if you are interested, send us an email and we’ll get you all of the updated tax information that we have.
Traffic Woes in Clayton and Albrook
…will all be a thing of the past!
Residents and visitors to Panama quickly find out that there are certain parts of Panama that should be avoided at all costs. Why? Traffic! For the last few years, the intersection that was the junction for travel between Albrook and El Dorado from 12-1pm and then again from 5-6 pm could be a quagmire of horns and slowly moving traffic.
HOWEVER, as of January of next year, all of those problems will be a memory with the completion of the new overpass that will remind residents living in these two beautiful neighborhoods of why they picked them in the first place.
Ironically, the Clayton and Albrook neighborhoods are some of the most tranquil, green, upscale and, believe it or not, quiet neighborhoods of Panama City. Home to the US Embassy and a number of very high profile families and international establishments, both Clayton and Albrook are known for their beautiful and sprawling gated communities, including the Embassy Club Panama.
Residents in Clayton’s Embassy Club love the fact that they are less than five minutes from Balboa Academy, the City of Knowledge, and the onramp to the interstate that takes them directly to the beach. Now they will also love the fact that the end is near for traffic in their neighborhood, thanks to President Martinelli’s new road initiative.
Local Business Spotlight
Overseas opportunities for medical pioneers
In the last two years, we have noticed an undeniable trend. Because we work with a lot of entrepreneurial clients who are looking to bring their proven business models to Panama, we end up hearing some very interesting new business ideas. Now more than ever we are seeing the seeds that were planted some years ago start to sprout, and The Stem Cell Institute is no exception.
Stem Cell therapy is a controversial medical procedure because of the way that stem cells are generated and harvested. The whole idea behind stem cell therapy is that stem cells are capable of turning into a variety of other cells, and thus can be used for treatment of a number of diseases including diabetes, heart disease, and Parkinson’s.
Despite the controversy, stem cell therapy is one of many cutting edge medical treatments that are available in Panama, and one that is bringing clients down to Panama for medical treatment. Our world class private health care network, championed by the John’s Hopkins medical facility in Punta Pacifica, is among the top five reasons retirees continue to flock down here in droves. I can personally attest to the quality of Johns Hopkins, as both my wife and I have undergone surgery and medical testing there, all at a fraction of the cost of what we would have paid in the states.
That’s all folks! Remember, we’re still the hardest working real estate agency in Panama. If you like what you see, forward this email to a friend using the buttons on the bottom. Thanks for your business! We believe that real estate is 24/7 and if you have a question, you know how to find us.