What Law 80 of 2012 allows and the real ROI of an Airbnb in Panama (2026)
Updated: 2026-07-28
This guide is for anyone thinking of buying an apartment in Panama to rent it on Airbnb and wondering what it really returns. The answer starts with the law. Inside the district of Panama, Law 80 of 2012 prohibits renting a residential apartment for fewer than 45 days without a public tourist-lodging permit from the Panama Tourism Authority (ATP). Skipping that rule is the costliest mistake we see foreign investors make when they come chasing short-term cash flow.
We updated it for the third quarter of 2026. It covers what Law 80 says and where short-term rentals are legal. Then it compares long-term rental ROI with short-term and walks through the taxes. It's general information. Before you sign a purchase agreement, go over your case with a licensed attorney and an authorized accountant in Panama.
As of the third quarter of 2026, Law 80 of 2012 prohibits rentals of fewer than 45 days in the district of Panama without an ATP public tourist-lodging permit, with fines from US$5,000 to US$50,000.
In five points
- In the district of Panama, Law 80 of 2012 prohibits rentals of fewer than 45 days in residential property without a public tourist-lodging permit from the ATP.
- The ATP imposes the fines for running an Airbnb without a permit in Panama City. RG Business & Property Law Firm puts them at US$5,000 to US$50,000.
- Outside the district of Panama, in Coronado and other beach areas, short-term rentals are usually allowed. The building's bylaws and some municipalities, Boquete among them, can still restrict them.
- An apartment on a long-term lease in a prime Panama City area yields roughly 5% to 8% gross a year, per 2026 market data, without the regulatory risk of short-term operation.
- Tourist lodging pays ITBMS at 10% instead of the general 7%. Net rental income, short stay or long lease, is subject to income tax in Panama.
Is it legal to run an Airbnb in Panama City?
Not without an ATP permit. Renting an apartment in Panama City for fewer than 45 days without that authorization is, in principle, illegal. Law 80 of 2012 reserves short-stay lodging to establishments the ATP has authorized as public tourist accommodation. Any rental of a residential unit below that 45-day threshold inside the district of Panama counts as lodging and needs the permit.
The Panama Tourism Authority (ATP) grants that permit and sanctions anyone operating without one. RG Business & Property Law Firm puts the fines at US$5,000 to US$50,000. Enforcement has been inconsistent. The fact that many listings stay live on the platforms doesn't make the practice legal, and the owner is the one carrying the risk.
The rule exists to protect the formal hotel sector and the safety of the people living in the buildings. If you buy a city apartment counting only on Airbnb, you start from a flawed premise. Read our Panama investment guide and the framework for foreign investors first, then settle on a rental strategy.
Where short-term rentals are legal and where they are not
Outside the district of Panama it usually is. Inside, only in Casco Antiguo with ATP registration or in a building with authorized tourist use. This table, valid as of the third quarter of 2026, covers the legal layer. The building's bylaws are a second layer, and you check them separately.
| Location | Rentals under 45 days | Basis / condition |
|---|---|---|
| Residential apartment in the district of Panama | Restricted | Law 80 of 2012 requires an ATP public tourist-lodging permit |
| Casco Antiguo (San Felipe) | Allowed with registration | Designated tourist zone, with registration at the ATP |
| Aparthotel / building with authorized tourist use | Allowed | The property is registered as public tourist accommodation |
| Beach areas outside the district of Panama (e.g. Coronado) | Generally allowed | Law 80 applies to the district of Panama. Check the condo bylaws |
| Boquete and other municipalities with their own rules | Depends on the municipality | Local ordinances may impose similar restrictions |
Even where the law allows it, the condominium bylaws or the owners' association can ban short-term rentals inside the building. Confirm both layers before you sign, the law where the property sits and the building's own rules.
Does Airbnb beat a long-term lease on ROI?
For most investors in Panama City, no. The strongest ROI, with no regulatory risk, comes from a long-term lease. A well-located apartment in a prime area yields roughly 5% to 8% gross a year according to 2026 market data, before maintenance, management and taxes.
Short-term looks better per night. In Punta Pacifica, for instance, the reference rate ran US$115 to US$170 a night in the first half of 2026, according to TheLatinvestor. Platform fees, cleaning, utilities and management come off that gross income, and occupancy isn't fixed. Punta Pacifica and Costa del Este are also among the areas with the most listings, and that saturation pushes rates and occupancy down.
Add the legal risk inside the district of Panama and the cost of holding the unit. In a waterfront tower the annual maintenance fee can be several times what you'd pay in a cheaper neighborhood, and that eats the net return. That's why many investors put the apartment on a long-term residential lease in Costa del Este (/zonas/costa-del-este) or Punta Pacifica (/zonas/punta-pacifica) and keep short-term letting for properties where it's fully legal.
Reference figures for the market and the law (Q3 2026)
The legal figures come from official sources, such as the text of the law on the ATP's site, and from Panamanian law firms. The market figures come from real-estate portals with 2026 data. The sources are listed at the end of this guide.
| Minimum stay without a tourist permit (district of Panama) | 45 days (Law 80 of 2012) |
|---|---|
| Fine for an illegal short-term rental | US$5,000 to US$50,000 (legal sources, Q3 2026) |
| Gross long-term rental yield, prime areas | ~5% to 8% (market sources, 2026) |
| Reference nightly rate, Punta Pacifica | US$115 to US$170 (market sources, H1 2026) |
| ITBMS on tourist lodging | 10% (Law 8 of 2010) |
| General ITBMS rate | 7% |
Advantages and risks of short-term rentals in Panama
- ✓ Where operating is legal, the nightly rate can beat what a monthly lease brings in.
- ✓ You can block dates and use the apartment yourself in season.
- ✓ Casco Antiguo and the beach destinations have real tourist demand.
- ✓ A well-located unit with a view and amenities stands out from the rest of the supply.
- ✗ If you operate without an ATP permit in the district of Panama, you're exposed to fines of US$5,000 to US$50,000.
- ✗ Income rises and falls with occupancy, the season and how many listings compete with yours.
- ✗ Operating costs are high. Platform fees, cleaning, utilities and management take a share of the income, and in a luxury tower the maintenance fee climbs further.
- ✗ Building bylaws or the owners' association can ban short-term letting even where the law allows it.
What taxes an Airbnb pays
A legal Airbnb pays ITBMS at 10%, the public tourist-lodging rate set by Law 8 of 2010. The Directorate General of Revenue applies 7% to most goods and services, and the 10% on lodging is a special rate. An operator with a short-stay permit charges and remits that tax, unlike someone letting on an ordinary long-term residential lease.
Short stay or long lease, the net income you earn by renting a property in Panama is subject to income tax and has to be declared. The rate, deductions and exemptions that apply depend on your situation as a taxpayer. Have an authorized accountant in Panama run the net ROI on your case before you buy.
Bill 35 of 2025 is under discussion. It proposes a 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's still a draft under debate. It isn't approved and doesn't change what Law 80 requires.
How to buy for rental income and stay legal
Decide the strategy before you buy. If you want short-term, look where it's legal (Casco Antiguo with ATP registration, an aparthotel or building with authorized tourist use, or a beach destination outside the district of Panama) and confirm the building's bylaws allow it. If you want steady cash flow with less risk, a long-term residential lease in an area of sustained demand is the more predictable route.
Before closing, pull the title at the Public Registry and check for liens. Read the condominium bylaws and ask for the real maintenance fee, because it hits the net return directly. A broker who works the local inventory and a licensed attorney lower the risk of buying an asset whose rental thesis is illegal where it sits.
If you're also after residency by investment, read our guide to the Qualified Investor Visa via real estate and the ranking of high-yield zones. Then check the figures against Panavanti's inventory in Costa del Este and Punta Pacifica before you commit capital.
This content is informational and does not constitute legal, tax or immigration advice. Verify current requirements with a licensed attorney in Panama before making decisions.
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)
Related guides: Panama Qualified Investor Visa via real estate (2026) · inversion panama 2025 · zonas alto rendimiento 2025 · inversionistas extranjeros panama
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