Closing costs when buying property in Panama: who pays what in 2026

What are closing costs, and why are they confused?

Closing costs are the charges settled when the transfer is formalized, on top of the property price, and they are split between buyer and seller. They get confused because the figures that circulate most —the 2% transfer tax and the 3% advance— are seller costs, not buyer costs, and it is easy to pin them on the person buying.

As a buyer, your own expenses are your attorney's fees, the notary, and recording the deed at the Public Registry. These are what you pay to make the property yours and get it registered in your name, which is why it helps to separate them clearly from the transfer taxes, which fall on the seller's side of the deal.

The other source of confusion is that the split is not rigid: Díaz, Shacalo & Asociados states that the buyer pays the applicable transfer tax (ITBI) while the seller pays the capital-gains advance, whereas Panamanian market custom tends to put both the 2% and the 3% on the seller. So the right move is not to assume, but to write into the promise-of-sale agreement who pays each line.

Who pays what at closing

The usual split in a Panama purchase. It is a budgeting reference, not a fixed rule: everything is negotiated in the promise-of-sale agreement. Figures as of November 2026.

Tax rates per PwC (Panama, accessed November 3, 2026); split and fee ranges per Díaz, Shacalo & Asociados (accessed November 3, 2026). Confirm every item with your attorney and accountant.

Legal fees, notary, and registry: the buyer's costs

The buyer's biggest expense is their own attorney's fee, which per Díaz, Shacalo & Asociados runs about 1% to 2% of the transaction value and is negotiable. That fee covers due diligence —reviewing the title at the Public Registry, confirming the property is lien-free, checking the tax clearances (paz y salvos)— and drafting and reviewing the promise-of-sale agreement and the deed. It is the best-spent money in the whole purchase, because it is the diligence that keeps you from overpaying or inheriting a title problem.

The notary turns the agreement into a public deed: signing before a notary is what gives the transfer legal force. Notary fees are set by an official schedule and, as Díaz, Shacalo & Asociados notes, are usually modest next to the property price.

Recording at the Public Registry is the step that makes your ownership enforceable against third parties: until the deed is recorded, the transfer is not complete. The recording fee is calculated on the registered value under the official schedule and is paid at the time of registration. Before recording, the Registry requires the transfer taxes to be paid, which is why closing and tax settlement go hand in hand. If you want to see how to check a property yourself before committing, we cover it in our guide on how to check property prices in Panama before you buy.

Example of buyer costs on a mid-priced apartment (November 2026)

Illustrative example on the median asking price of city apartments for sale (Panavanti active inventory, n=23, October 29, 2026, verifiable at /precios). Fee percentages are from Díaz, Shacalo & Asociados; notary and registry are set by official schedule. Not a quote: ask your attorney for an estimate.

The deposit, escrow, and how your money is protected

The buyer's money is protected mainly by escrow. Per Kraemer & Kraemer, the deposit is usually 10% of the price and is held in escrow by the attorney supervising the transaction; the title is transferred after the sales taxes have been paid. That way your deposit does not go straight to the seller, but is held until the agreed conditions are met.

In Panama the escrow service is regulated by Law 1 of 1984 and Law 21 of 2017 (Kraemer & Kraemer), so it is not an informal favor between the parties but a figure with a legal framework. Its cost is quoted per transaction and is modest next to the price; ask the attorney or trust company about it before signing, along with the exact conditions for releasing the funds.

Before you put down the deposit, check that the promise-of-sale agreement clearly sets the payment schedule, what triggers the release of escrow, and what happens if the deal falls through. It is the same principle as in a pre-construction purchase, where the money is safeguarded while the building goes up; we develop it in our guide to pre-construction vs resale in Panama.

The transfer taxes: 2% and 3% (on the seller's side)

Even though they are not your cost, it helps to understand the transfer taxes because they shape the closing. Per PwC, the transfer triggers a 2% transfer tax plus a 3% income tax advance, both calculated on the greater of the gross transaction amount or the cadastral value. That 3% may stand as final, or otherwise the tax is assessed at 10% of the gain, crediting the 3% already paid, and any excess may be rebated.

There is one case where the 2% does not apply: on new housing, per PwC, the 2% transfer tax does not apply if the transfer occurs within the two years following the issuance of the occupancy permit. If you buy new construction straight from the developer, ask how the project handles this rule, because it affects the closing.

By custom the seller bears both taxes, but —as noted— the split is negotiable and some firms list the ITBI as a buyer cost. Whatever the agreement, the Registry will not record the deed without the tax clearances that prove payment, so tax settlement is part of the closing. The full detail of real-estate taxation, including the annual immovable-property tax, is in our Panama property tax guide.

Buying cash or with a mortgage: effect on closing costs

How to budget your closing without surprises

Budget your buyer costs separately from the seller's taxes. A useful rule of thumb: set aside roughly 1% to 2% of the price for your legal fees, plus a modest amount for notary and registry, and make clear in the promise-of-sale agreement who pays the 2% and the 3%. If you finance, ask the bank for the breakdown of appraisal, fees, and FECI before you accept.

Ask your attorney for a written estimate that separates fees, government costs (notary and registry), and escrow, and that flags which items are estimated. You can cross-check the asking price against market data by type and zone at /precios, and estimate the seller's side with our seller cost calculator at /calculadora-venta.

At Panavanti we walk the purchase from start to finish and help you read every line of the closing budget, so you know exactly what you pay and what the seller pays, without promising a result that depends on third parties. When you want to see inventory, the city's apartments for sale are at /properties/apartamentos-en-venta.

Sources

• taxsummaries.pwc.com — El traspaso de un inmueble en Panamá paga 2% de impuesto de transferencia más un adelanto de 3% del impuesto sobre la renta, calculados sobre el mayor valor entre el monto bruto de la operación y el valor catastral; el 3% puede ser definitivo o, de lo contrario, el impuesto se liquida al 10% de la ganancia acreditando el 3% (el exceso puede reembolsarse). En vivienda nueva, el 2% de transferencia no aplica si el traspaso ocurre dentro de los dos años siguientes a la emisión del permiso de ocupación. (accessed 2026-11-03)
• diazyasociados.legal — Díaz, Shacalo & Asociados lista, entre los costos del comprador, los honorarios del abogado del comprador (típicamente 1%–2% del valor de la transacción, negociables), la inscripción en el Registro Público (calculada sobre el valor registrado según el arancel oficial, pagada al momento de inscribir) y la notaría (fijada por arancel oficial, normalmente modesta); describe el adelanto de 3% como costo del vendedor (adelanto de la ganancia de capital) y la comisión de corretaje en 4%–5% del precio cuando aplica; indica que el comprador paga el impuesto de transferencia (ITBI) aplicable y el vendedor paga el adelanto de la ganancia de capital, y que honorarios legales y de notaría se liquidan en el cierre. (accessed 2026-11-03)
• kraemerlaw.com — Kraemer & Kraemer indica que el abono inicial (down payment) suele ser el 10% del precio de compra y que el abogado que supervisa la transacción normalmente mantiene esos fondos en depósito en garantía (escrow), y que el título se traspasa después de pagados los impuestos de la venta. (accessed 2026-11-03)
• kraemerlaw.com — Kraemer & Kraemer indica que en Panamá los servicios de depósito en garantía (escrow) están regulados por la Ley 1 de 1984 y la Ley 21 de 2017. (accessed 2026-11-03)
• inmobiliariapanavanti.com — Inventario activo de Panavanti al 29 de octubre de 2026: 23 apartamentos en venta en la ciudad de Panamá, con una mediana de lista de US$570,000 y de US$2,376 por m². (accessed 2026-11-03)