National Assembly approves reform that reduces PROPERTY TAX PANAMA
PROPERTY TAX PANAMA
The National Assembly approved Monday in the third and final debate a controversial bill that reforms the Tax Code on Property Tax (IBI), considered by the Government as the “most important” reduction of this tax in 40 years.
The reform establishes that properties that register as main dwelling will benefit from a reduction of more than 60% of the tax and owners of a primary residence with a registered value of $120,000 or less, will be exempted from paying real estate taxes FOREVER! What a game changer for property owners in Panama!
The MEF said that this project “constitutes the most important comprehensive reform of the IBI in the last 40 years and establishes a greater fiscal balance, which benefits the majority of the owners.”
Any amount from $120,000 up to $700,000 will be taxed at only 0,5%. Leaving a home owner to only pay the bare minimum per year in real estate taxes once the tax exoneration period is over.
From a press release by the Assembly:
Money collected from the taxes will be given to municipalities to secure resources for decentralisation.
Having been established, the progressive rate combined with the tax benefit known as family property tax or the main dwelling will be:
1. 0.00% on the taxable base up to $120,000.00
2. 0.5% on the taxable base over $120,000.01 and up to $700,000.00
3. 0.7% on the taxable base over $700,000.00
The combined progressive rate on commercial real estate, industrial, other residences and others is as follows:
1. 0.00% on the taxable base up to $30,000.00
2. 0.6% on the taxable base over $30,000.01 and up to $250,000.00
0,8% on the taxable base over $250,000.00 and up to $500,000.00
3. 1% on the taxable base over $500,000.00 thousand.