It is not a secret that Panama has been experiencing a real estate boom. Some others disagree with this “boom” qualification, because that phenomenon is distinguished by an abnormal growth of the real estate market, producing an increase in values which upon ending of the cycle property prices should fall down. This situation has not occurred in Panama.
That is why the prices of the properties increased almost 5 times, since the beginning of the “boom”. This increase has not been yet registered, in most the cases, in the Panama official record of real estate entity, named Cadastral and Heritage Assets Directorate. This cause that a group of senators promoted a bill that modify the appraisal of the properties in the official record of real estate by assigning new values to each zone in which the properties are built.
This bill caused some unease of many sectors of our society, and this is because the many repercussions that this law would entail on so many aspects of the market.
That is why organizations such as the “Chamber of Commerce, Industries and Agriculture”, join forces to file motions to the Panama Senate`s Commission of Economy and Finance in order to present their arguments, attempting to demonstrate that the bill would represent an extreme change on the tax benefits of so many people, companies and foreign investors, if it becomes a law.
Due to these pressures the Senate`s Commission of Economy and Finance, decided to create a sub-commission in charge of this matter that will discuss the rate presented on the bill that assign new values to the different zones in Panama, and will review the motions presented by the institutions and organizations against the bill.
Last month, along the pressure of the civil society, the Senator Z. Rodriguez, presented a draft bill that modifies the previous one, and lower the tax of the real estate property. That is why the sub-commission requested the Department of Economics and Finance, a study of the values of each zone.
It is indeed important to modify the previous regulation since there were some situations in which the properties were sold by amounts not according to the reality granting an unfair profit to those people, and on top of that tax benefits that are intended to the lower classes.
Having said that, it is more important to make these modifications with the proper time, study, consulting and expertise possible, so the true beneficiaries are the people that need it.
Lic. Juan Raúl Sevillano
Our Panama attorneys law firm offers a Guide to Doing Business in Panama completely FREE! Download here!Get it now