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FREQUENTLY ASKED QUESTIONS: BRITISH BUYERS IN PANAMA
 

We are a licensed Panamanian brokerage, not a law firm or tax practice. Anything touching HMRC, residence status or immigration belongs with a qualified professional, and we will introduce you to ones we trust.
 

OWNERSHIP AND THE BUYING PROCESS
 

Can a British citizen legally own property in Panama?
Yes, outright and in your own name. Foreigners hold titled property on the same legal footing as Panamanian citizens, registered in the Public Registry. No foreign buyer surcharge, no second-home levy, no residency requirement. The main restriction is land within ten kilometres of an international border.
 

Is Panamanian ownership freehold or leasehold?
Titled property is closest to British freehold — full registered ownership without a lease or ground rent. Flats are held under propiedad horizontal, the local condominium system, which carries service charges much as a British block would. There is no leasehold-and-ground-rent structure of the kind that causes such trouble at home.
 

Do I need residency or a visa to buy?
No. Ownership and immigration status are entirely separate. Many British clients own here for years while entering on a tourist stamp.
 

Should I buy in my own name or through a Panamanian company?
Both are common. Corporate ownership carries annual franchise tax and registered agent fees of several hundred dollars, and adds complexity to your UK reporting. Some visa routes require personal ownership. Decide this with your Panamanian lawyer and a UK adviser before signing, not after.
 

What is the difference between titled property and rights of possession?
Titled property is registered in the Public Registry with a clear chain of ownership. Rights of possession, or derecho posesorio, is an occupancy claim over untitled land — common in rural and coastal areas, cheaper, and carrying real risk. Conversion to title is possible but slow and not guaranteed. If an agent does not volunteer that distinction, find another agent.
 

Is there title insurance?
Yes, through international underwriters, and for a significant purchase it is usually worth the cost. A thorough title search by your own lawyer is the non-negotiable part.
 

How does the conveyancing process compare to England?
Faster and less fraught. There is no chain, no gazumping culture, and no exchange-then-complete gap of the British kind. A promise-to-purchase agreement with a deposit is followed by due diligence and then the public deed. Funds are typically held in a law firm's escrow account rather than by a conveyancer as you would expect at home — make sure that arrangement is properly documented.
 

What are typical purchase costs?
Budget roughly three to five percent of the price for legal fees, notary, registration and incidentals. Transfer tax and advance capital gains fall on the seller in a standard transaction, though everything is negotiable. Note there is no stamp duty equivalent payable by the buyer.
 

How long does a purchase take?
Typically four to eight weeks for a straightforward titled resale, longer with title complications, financing, or a developer contract.
 

Do I have to be in Panama to complete?
Not necessarily — a properly drafted power of attorney lets your lawyer sign on your behalf, which is how many British buyers manage the distance. We still strongly prefer you have seen the property in person.
 

Is there a reliable property portal?
There is an MLS, but coverage is incomplete and data quality varies. A meaningful share of good stock never appears online. This is the real argument for an agency physically present in the market you are searching.
 

What should make me walk away?
Unclear title, a seller who cannot produce a current paz y salvo tax clearance, pressure to transfer funds before due diligence is complete, guaranteed yields in writing, and any request to under-declare the price on the deed.
 

MONEY AND CURRENCY
 

Do I have currency risk?
Yes, and it is the most underestimated factor for British buyers. Panama uses the US dollar, so your purchase price, property tax, service charges and eventual sale proceeds are all in dollars while your income and life may be in sterling. A move in GBP/USD changes your effective cost materially. Anyone telling you dollarisation removes currency risk for a British buyer has it backwards.
 

How should I move the money?
By international transfer, but do not accept your high street bank's retail rate without comparing. On a £300,000 purchase the spread between a retail bank and a specialist currency broker can run to several thousand pounds. Treat the conversion as its own decision, and ask your broker about forward contracts to fix a rate between agreement and completion.
 

Can I get a mortgage in Panama?
Panamanian banks do lend to non-residents, at higher rates and lower loan-to-value ratios than you are used to, with a document-heavy process that can run months. Most British buyers pay cash or release equity against UK property. We will help you think through both.
 

Can I open a Panamanian bank account?
Yes, though it takes work. Panamanian banks apply thorough know-your-customer requirements — bank references, professional references, proof of income, an in-person interview. Residency makes it considerably easier. Budget several weeks and expect to provide more paperwork than you would at home.
 

Are there foreign buyer taxes or restrictions?
No. Panama has no equivalent to the surcharges and restrictions that have proliferated across Europe and Britain. You are treated the same as a citizen for titled property.
 

PANAMANIAN TAXES
 

What is property tax in Panama?
It is charged on registered cadastral value rather than market value. A property registered as your primary residence or family patrimony is fully exempt on its first $120,000 of value, with modest progressive rates above. Second homes and investment property are taxed from a much lower exemption floor, with rates capped at one percent. Many new-build units carry additional exoneration periods — verify what remains before buying.
 

Is there anything like council tax?
No. Municipal charges are minimal, and the property tax above is the main annual liability. Service charges on a flat range from roughly $120 a month for a modest unit to $800 or more in a full-amenity tower.
 

Do I pay Panamanian tax on rental income?
Yes. Panama-sourced rental income is taxed on a progressive individual scale with a nil band on the first tranche. Legitimate expenses are deductible with proper invoices, and you will need to be registered with the tax authority. Panamanian tax paid can generally be relieved against UK tax under the treaty.
 

What happens tax-wise when I sell?
Sellers face a transfer tax and an advance capital gains payment, with a refund mechanism if the actual gain was lower. Foreign sellers who have never been resident may need a non-resident taxpayer number.
 

Does owning property make me a Panamanian tax resident?
No. Ownership alone does not create tax residency, and Panama does not tax foreign-source income regardless.

UK TAXES AND HMRC
 

Is there a double taxation treaty between the UK and Panama?
Yes. The UK-Panama Double Taxation Convention was signed on 29 July 2013, entered into force on 12 December 2013, and has applied in the UK to income tax and capital gains tax since 6 April 2014. It has since been modified by the Multilateral Instrument. This is a genuine advantage over several competing destinations and over what American and Canadian buyers get.
 

Do I have to report my Panamanian property to HMRC?
There is no UK equivalent of the American FBAR or the Canadian T1135 requiring you to declare the asset itself. While UK resident, you report foreign income and gains on the foreign pages of your Self Assessment return, with treaty and foreign tax credit relief available. The obligation applies even to small amounts.
 

Will I pay UK capital gains tax when I sell?
If you are UK resident at the time of disposal, yes, on the gain, with relief for Panamanian tax paid under the treaty. If you have genuinely broken UK residence the position differs, but the temporary non-residence rules can pull gains back into charge if you return to the UK within five years. Take advice before disposing, and before returning.
 

Does buying in Panama make me non-UK-resident?
No. The Statutory Residence Test turns on day counts and UK ties, not on where you own property. Owning here and remaining UK resident is entirely normal.
 

What happened to the non-dom rules?
The remittance basis was abolished on 6 April 2025 and replaced with a residence-based system, including a four-year foreign income and gains regime available only to those who have been non-UK-resident for the previous ten years. If your planning was built around the old rules, it needs revisiting.
 

How does inheritance tax work now?
Since 6 April 2025 it follows residence rather than domicile. If you have been UK tax resident for at least ten of the previous twenty tax years, you are a long-term resident and your worldwide estate — Panamanian property included — falls within UK inheritance tax at 40 percent above the nil-rate band. A tail of up to ten years applies after leaving the UK, depending on how long you were resident.
 

What happens to my Panamanian property when I die?
Panamanian assets are generally governed by Panamanian succession rules, and an English or Scottish will may not deal with them efficiently. Many owners execute a separate Panamanian will covering Panamanian assets only. Sort this out while you are healthy, and make sure the two wills do not inadvertently revoke one another.
 

Can I keep my ISAs?
You can keep existing ISAs, but you cannot make new contributions once you are no longer UK resident. The tax-free wrapper is a UK concept and may not be recognised by another jurisdiction — though as Panama does not tax foreign income, this is less of an issue here than in some countries.
 

What about transferring my pension?
Overseas pension transfers involve a potential 25 percent overseas transfer charge and a narrow set of qualifying schemes, and Panama is not a jurisdiction with an established QROPS market. Be sceptical of anyone marketing pension transfers alongside property. Take independent, UK-regulated advice.
 

PENSIONS AND HEALTHCARE
 

Will my state pension increase if I live in Panama?
No. The UK uprates the state pension annually only in the EEA, Switzerland, Gibraltar and a limited set of countries with qualifying reciprocal agreements. Panama is not one of them. Once you are permanently resident here, your state pension is frozen at the rate you were receiving, with no further annual increases. Over a long retirement the erosion is substantial. Model it properly before you commit.
 

Can I still receive my UK pension in Panama?
Yes. Both state and private pensions can be paid into an overseas account. Notify the International Pension Centre and HMRC when you move. How the pension is taxed depends on your residence status and the treaty.
 

Does the NHS cover me abroad?
No. Free NHS treatment depends on being ordinarily resident in the UK, and that entitlement ends when you move permanently. There is no reciprocal healthcare agreement with Panama and a GHIC does not apply here.
 

Is healthcare in Panama any good?
In Panama City, genuinely good. Several private hospitals hold international accreditation, with English-speaking, often US-trained specialists and short waiting times, at costs well below British private rates. Outside the capital quality varies — David serves Boquete and the west, while smaller towns have local clinics and refer serious cases onward. Factor hospital distance into your location choice.
 

Can I get private health insurance here?
Yes, and it is inexpensive by British standards. Age and pre-existing conditions matter, and some insurers decline new applicants past a certain age, so explore it before you move rather than after. Many Britons carry an international policy rather than a local one.
 

What about my prescriptions?
Many medicines are available over the counter or at substantially lower prices than UK private rates, with a further discount under pensionado status. Specific brands may not be available — check your particular medications before committing.

RESIDENCY AND IMMIGRATION
 

How long can a British citizen stay without a visa?
Typically 90 days, not the 180 that American and Canadian visitors receive. A great deal of online advice gets this wrong because it was written for the US market. Check your stamp — it governs — and note that overstaying brings fines and a record.
 

Which residency route suits me?
With a verifiable lifetime pension of at least $1,000 monthly, Pensionado is usually the most cost-effective, dropping to $750 with Panamanian property above $100,000. Buying anyway and want residency alongside? Friendly Nations through a $200,000+ property. Want immediate permanent residency with no provisional stage? The Qualified Investor route, at a higher threshold.
 

Does a UK pension count for the Pensionado visa?
Generally yes, provided the documentation shows the income is for life. Both state and occupational pensions are commonly used. Your immigration solicitor will tell you what evidence the authorities want.
 

Do I have to live here to keep residency?
Requirements are light. Pensionado generally requires a visit roughly once every couple of years. Panama does not demand that you actually live here.
 

Can I work in Panama?
Generally not as an employee of a Panamanian company without a separate work permit — certain professions are reserved for citizens. Working remotely for UK employers or clients, and owning a Panamanian business and taking dividends, are different matters.
 

Can I become a Panamanian citizen?
After five years of permanent residency you may become eligible to apply. Panama recognises dual citizenship in practice and the UK permits it, so you would not surrender your British passport. Naturalisation is a real process with language and integration components.
 

LIVING IN PANAMA
 

Do I need Spanish?
In Panama City, Coronado and Boquete you can function in English. In Pedasí, Bocas and most of the interior you will manage day to day but miss a great deal. Learning even basic Spanish changes your experience from tolerated foreigner to participating neighbour.
 

Is Panama safe?
Panama City and the areas where foreigners typically live and buy are broadly safe with normal urban precautions. Rural Azuero and Boquete are quiet. The Darién region near the Colombian border is genuinely dangerous and not somewhere to buy property.
 

What is the weather actually like?
Coastal Panama is hot and humid year-round, roughly 26 to 32 degrees, with a dry season from about December to April and afternoon downpours the rest of the year — not all-day rain. Boquete and the highlands sit in the mid-teens to low twenties. Humidity is the adjustment most Britons underestimate; it is not Mediterranean heat.
 

Do hurricanes hit Panama?
Panama sits south of the main Atlantic hurricane belt and direct strikes are extremely rare. Heavy seasonal rain, flooding and landslides are the real risks, and they are location-specific. Ask about drainage and rainy-season access anywhere rural.
 

Can I drive on my UK licence?
Visitors can generally drive on a valid UK licence for an initial period, commonly cited as ninety days, after which a Panamanian licence is expected. Residents convert through a straightforward process. And they drive on the right.
 

Can I bring my car?
Pensionado residents have a duty exemption for importing one vehicle every two years, plus a one-off household goods exemption up to $10,000. For a British buyer this is rarely worth it — right-hand-drive vehicles are impractical here and parts availability is poor. Sell at home and buy locally.
 

Can I bring my dog or cat?
Yes, and Panama allows home quarantine rather than kennels. You will need a veterinary health certificate with the appropriate UK endorsement, authentication by the Panamanian consulate in London, current rabies vaccination with the required waiting period, and a home quarantine request emailed to the health ministry several days before arrival, with a modest fee on arrival. Requirements change — confirm with the consulate before your vet appointment.
 

What about shipping household goods?
Container shipping from UK ports is available, and residents can use the household goods exemption. Realistically most people bring far too much. British furniture and soft furnishings deteriorate quickly in tropical humidity, and your electricals will need transformers. Bring what you cannot replace.
 

Are there schools for my children?
Panama City has established international schools offering IB and British or American curricula, at real annual cost. Outside the capital, options narrow sharply. If you are relocating with school-age children, school availability should drive your location choice rather than follow it.
 

How is the internet?
Fibre is widely available in Panama City and the established expat areas, and remote work is entirely practical. Rural and coastal coverage is more variable, with Starlink filling many gaps. Test the connection at the specific property, not the town.
 

Is there a British community?
Smaller than the American and Canadian contingents, but present — particularly in Boquete and Panama City. The British Embassy is in Panama City. If a large British expat community is important to you, be realistic that Panama is not Spain in that respect.
 

LETTING AND INVESTMENT RETURNS
 

Can I let the property when I am not using it?
Usually, but short-term letting rules vary by municipality and by building. Some residential buildings in Panama City restrict short lets, and individual condominium regulations may prohibit them regardless of local law. If rental income is part of the plan, verify the specific building's rules before you buy.
 

What yields should I expect?
It depends entirely on location, property type and management, and outcomes range from solid to negative. Anyone quoting a guaranteed double-digit yield is selling something. We will show you real comparables and achieved rents, and sometimes our advice is that the numbers do not work.
 

What does management cost?
Typically a percentage of rental income for long lets, higher for short lets with turnover and guest management. For a property you are not living in, competent local management is the difference between an asset and a liability.
 

How liquid is the resale market?
Less liquid than the UK. The foreign buyer pool is thinner, marketing periods run longer, and pricing takes patience. This is the genuine trade-off in Panamanian property — price it in at purchase rather than discovering it at sale.
 

How does Panama compare to Spain or Portugal for a British buyer?
Panama is cheaper to buy and to own, has no foreign buyer restrictions, and taxes property far more lightly. Spain and Portugal are three hours away rather than fifteen, uprate your state pension, and have deeper British communities. Neither answer is right for everyone. We are happy to talk through the comparison honestly, including where Panama loses.