A proposed tax reform could reduce transaction-related costs for qualifying new-construction properties, but the measure has not yet become law.
Panama’s government has introduced Bill 661, a proposal that would modify the country’s Property Transfer Tax, known locally as the Impuesto de Transferencia de Bienes Inmuebles, or ITBI, for the first sale of certain newly built homes.
Under the proposal, the first B/.120,000 of the property’s taxable value would be exempt from ITBI. For qualifying homes valued above B/.120,000 and up to B/.200,000, a preferential tax rate would apply only to the amount exceeding B/.120,000. For properties valued above B/.200,000, the first B/.120,000 would remain exempt, while the remaining amount would be taxed under the standard system.
Why Is This Being Proposed?
The Ministry of Economy and Finance says the initiative is intended to make homeownership more accessible, encourage private investment, support new residential developments, and stimulate employment in Panama’s construction and related industries.
Although the ITBI is legally payable by the seller, the government acknowledges that this tax can affect project costs, development decisions, and the final price offered to buyers. Therefore, reducing the tax burden could potentially make qualifying new homes more competitive and accessible.
What Could This Mean for Property Buyers?
For buyers considering newly constructed properties, the proposed reform could help reduce some of the costs incorporated into the final sale price. It may be particularly relevant to buyers exploring homes in the B/.120,000 to B/.200,000 range.
However, any direct savings would depend on several factors, including the final wording of the law, the property’s eligibility, the developer’s pricing structure, and the terms of the individual transaction. Buyers should not assume that the proposed exemption will automatically result in a specific discount.
Is the Exemption Already Available?
No. Bill 661 is still under legislative review and is not currently in effect.
On August 19, 2026, the National Assembly’s Economy and Finance Committee temporarily suspended its discussion during the first-debate stage. Legislators indicated that the proposal would be analyzed alongside a separate bill that seeks to apply Panama’s 7% ITBMS to certain digital purchases and services.
The government has presented the two initiatives as financially connected, with the proposed digital-tax revenue intended to offset some of the public income that could be reduced by the ITBI exemption.
What Should Buyers Do Now?
Anyone considering the purchase of a new-construction property should continue calculating the transaction under the rules currently in force. Before signing a purchase agreement or relying on a possible exemption, buyers should confirm the legal status of the bill, the property’s eligibility, and the applicable closing costs with qualified legal and tax professionals.
- Current Legal Status: As of August 27, 2026, Bill 661 is not law; discussion was suspended during the first debate, with the proposal to be analyzed alongside a digital tax measure (ITBMS).
- Proposed ITBI Tax Changes (Bill 661): Bill 661 would exempt the first B/.120,000 of a new-construction property’s taxable value from ITBI, apply a preferential rate for the portion above B/.120,000 up to B/.200,000, and tax the amount above B/.200,000 under the standard system.
- Guidance for Buyers Now: Buyers should continue calculating transactions under current rules, verify the bill’s status and eligibility with professionals, and monitor updates as the proposal progresses.
- Rationale Behind the Proposal: The Ministry of Economy and Finance says the reform aims to make homeownership more accessible, stimulate private investment and new residential developments, and support employment in construction and related sectors.
- Potential Impact on Buyers: If enacted, the reform could reduce some costs folded into sale prices, especially for homes in the B/.120,000–B/.200,000 range, though actual savings depend on the final law, eligibility, and transaction terms.
One Diversity will continue monitoring the proposal as it moves through the legislative process and will share relevant updates with our community.
Information updated as of August 27, 2026. This article is provided for general informational purposes and does not constitute legal, financial, or tax advice.
Sources: Ministry of Economy and Finance of Panama, National Assembly of Panama, Presidency of Panama, and La Prensa.
