Airbnb ROI in Panama: What Law 80 of 2012 Allows and the Real Return (2026)

Is it legal to run an Airbnb in Panama City?

In Panama City, renting an apartment for fewer than 45 days without authorization is, in principle, illegal. Law 80 of 2012 reserves short-stay lodging to establishments authorized by the ATP as public tourist accommodation; as a result, any rental of a residential unit below that 45-day threshold within the district of Panama counts as a lodging activity that requires a permit.

The competent authority is the Panama Tourism Authority (ATP), which grants the public tourist-lodging permit and sanctions anyone operating without it. According to Panamanian legal sources, non-compliance fines run from US$5,000 to US$50,000, though enforcement has historically been inconsistent. The fact that many listings stay active on the platforms does not make the practice legal: it is a standing risk for the owner.

The rationale is to protect the formal hotel sector and the safety of building residents. In practice, an investor who buys a city apartment purely for Airbnb starts from a flawed premise; it is worth reviewing our Panama investment guide and the framework for foreign investors before settling on a rental strategy.

Where short-term rentals are legal and where they are not

The legal map of short-term rentals in Panama depends on location and on the building's bylaws. This summary, valid as of the third quarter of 2026, is guidance, not a substitute for checking with an attorney.

Even where short-term rentals are legal, the condominium bylaws or the owners' association can prohibit them inside the building. Always confirm both layers: the applicable law and the internal rules.

The real ROI: long-term versus short-term rental

For most investors in Panama City, the strongest ROI with no regulatory risk comes from long-term rentals, not Airbnb. According to 2026 market sources, a well-located apartment in prime areas yields roughly 5% to 8% gross per year, before maintenance, management and taxes.

Short-term operation can show attractive nightly rates —in Punta Pacifica, for instance, market sources report reference prices of US$115 to US$170 per night in the first half of 2026— but that gross income erodes with variable occupancy, platform fees, cleaning, utilities and active management. On top of that, areas such as Punta Pacifica and Costa del Este are among the most saturated with listings, which pressures both rates and occupancy.

You must also add the legal risk inside the district of Panama and the carrying costs: in premium waterfront towers, annual maintenance fees can be several times higher than in lower-priced neighborhoods, compressing the net return. That is why many investors use the asset for long-term residential rental in areas like Costa del Este (/zonas/costa-del-este) or Punta Pacifica (/zonas/punta-pacifica), and reserve short-term letting for properties where it is fully legal.

Reference figures for the market and the law (Q3 2026)

Legal figures come from official and law-firm sources; market figures from 2026 real-estate sources. Verify amounts and rules with licensed advisors before investing.

Short-term rentals in Panama: advantages and risks

Taxes and compliance

Public tourist lodging is subject to ITBMS at 10%, above the general 7% that the Directorate General of Revenue applies to most goods and services; that special 10% rate comes from Law 8 of 2010. A legal short-stay operator must charge and remit that tax, unlike an ordinary long-term residential lease.

Regardless of the term, the net income from renting a property in Panama is subject to income tax and must be declared. The specific rate, deductions and exemptions depend on each taxpayer's situation, so it is worth relying on an authorized accountant in Panama before projecting the net ROI.

Bill 35 of 2025 is under discussion: a proposed national regulation of short-term rentals that would formalize the thousands of units operating today without legal backing and set tax and safety obligations; the hotel association (Apatel) has even proposed raising the ITBMS on short stays. As of the third quarter of 2026 it is only a draft under debate: it is not approved and does not yet change what Law 80 requires.

How to structure a legal rental investment

The starting point is to define the strategy before buying: if the goal is short-term, look for properties where it is legal —Casco Antiguo with ATP registration, aparthotels or buildings with authorized tourist use, or beach destinations outside the district of Panama— and confirm the building bylaws allow it. If the goal is stable, lower-risk cash flow, long-term residential rental in areas of sustained demand is the more predictable route.

Before closing, verify the title at the Public Registry, the status of liens, the condominium bylaws and the real maintenance fees, which hit the net return directly. A broker who knows the local inventory and a licensed attorney reduce the risk of buying an asset whose only rental thesis is, in fact, illegal in its location.

If you are also weighing residency by investment, review our guide to the Qualified Investor Visa via real estate and the ranking of high-yield zones, and check the figures against real Panavanti inventory in Costa del Este and Punta Pacifica before committing capital.

Sources

• www.atp.gob.pa — Texto oficial de la Ley 80 de 2012 publicado por la Autoridad de Turismo de Panamá (ATP), que regula el alojamiento público turístico y atribuye a la ATP la competencia de autorizar y sancionar. (accessed 2026-07-28)
• www.sucre.net — La Ley 80 de 2012 prohíbe en el distrito de Panamá los alquileres de menos de 45 días salvo que se cuente con un permiso de alojamiento público turístico de la ATP (análisis de la firma Sucre Arias Reyes). (accessed 2026-07-28)
• www.rglawfirmpa.com — Las multas por operar alquileres de corta estancia sin permiso oscilan entre US$5,000 y US$50,000 y las impone la ATP; existen rutas legales de alojamiento turístico (RG Business & Property Law Firm). (accessed 2026-07-28)
• estrategaadvisors.com — Alquilar una propiedad en Airbnb por menos de 45 días dentro de la Ciudad de Panamá puede ser ilegal bajo la Ley 80 de 2012; el ámbito de la prohibición es el distrito de Panamá (Estratega Advisors). (accessed 2026-07-28)
• abogadosinmobiliariospty.com — Fuera del distrito de Panamá los alquileres de corta estancia generalmente están permitidos, aunque reglamentos de propiedad horizontal, juntas y algunos municipios pueden restringirlos; el Casco Antiguo (San Felipe) es zona turística. (accessed 2026-07-28)
• dgi.mef.gob.pa — La Dirección General de Ingresos establece la tasa general del ITBMS en 7%, con tasas especiales para determinados servicios. (accessed 2026-07-28)
• www.pkf-central-america.com — El servicio de alojamiento u hospedaje público turístico causa ITBMS a la tasa del 10% (Ley 8 de 2010), superior a la tasa general del 7% (PKF Panamá). (accessed 2026-07-28)
• thelatinvestor.com — Datos de mercado 2026 sobre tarifas por noche, ocupación y saturación del alquiler de corto plazo en la Ciudad de Panamá (Punta Pacífica US$115-170/noche; saturación en zonas premium). (accessed 2026-07-28)
• thelatinvestor.com — Datos de mercado 2026 sobre rendimientos brutos del alquiler a largo plazo de apartamentos en la Ciudad de Panamá (rango aproximado de 5% a 8% en zonas prime). (accessed 2026-07-28)