After much waiting, we finally have available the procedures for registering properties under Law 66 (2017) for the payment of real estate taxes. Many clients and concerned residents requested information over recent months, which we have been unable to respond. We finally have more details regarding the registration of the primary residence.

With the publication of these regulations, we are finally able to inform you of the ways you can register your property as a primary residence.  This allows you to take advantage of new tax rates adopted in 2017.  No mention has been made throughout the requirements of a lawyer or power of attorney to a lawyer.  Nevertheless, if you do not speak Spanish fluently you might be more comfortable having it done for you.  If this is the case, then please contact our office. This registration can either be done in person at the relevant tax office or through the online system (eTax-2).

The benefits

The benefit of this new system is that you will be able to take advantage of the new tax rates that come into effect January 1st.  You do, however, need to be completely up to date with your property taxes in order to apply.  If you pay before December 31, 2018, you should be able to take advantage of the Moratoria that is currently in effect, avoiding paying additional interest & penalties on property taxes owed.

Application for “Family Taxable Assets”:

To be requested to the Dirección General de Ingresos, together with a Sworn Affidavit (Declaración Jurada) – which confirms the following facts:

• Natural person:
  • One or both spouses (no kids)
  • Marriage certificate (Civil Registry of Panama or issued overseas – apostilled – and then registered at the Panamanian Civil Registry)
  • Copy of the cédula or passport of the applicant
  • Photocopy of the public deed of the property purchase OR Certificate issued by the Public Registry of Panama
    • very important that this already be updated in ANATI

• Spouses with minor children:
  • Marriage certificate (Civil Registry of Panama or issued overseas – apostilled – and then registered at the Panamanian Civil Registry)
  • Birth certificates of the children
  • Copy of the cédula or passport of the property owners
  • Photocopy of the public deed of the property purchase OR Certificate issued by the Public Registry of Panama
    • very important that this already be updated in ANATI
• Single parent (with minor children) – or just for minors :
  • Birth certificates of the children
  • Copy of the cédula or passport of the applicant
  • Photocopy of the public deed of the property purchase OR Certificate issued by the Public Registry of Panama
    • very important that this already be updated in ANATI
  • If guardianship of childrennn – then should be accompanied by the relevant Court Order
• (other possible cases for elderly parents, etc.)
• Legal Person (corporation)
  • copy of the cédula of the legal representative
  • Original certificate from the public registry of the legal entity
  • Photocopy of the public deed of the property purchase OR Certificate issued by the Public Registry of Panama
    • very important that this already be updated in ANATI
  • Certification by a CPA that the members of the family are 100% owners of the shares of the company
  • Declaration by the company shareholders that this is Family Taxable Assets

Application for “Primary residence”:

To be requested to the Dirección General de Ingresos, together with a Sworn Affidavit (Declaración Jurada) – which confirms the following facts:

• Natural person – lives alone or with other non-family members:
  • Copy of the cédula or passport of the applicant
  • Photocopy of the public deed of the property purchase OR Certificate issued by the Public Registry of Panama
    • very important that this already be updated in ANATI
• Widow or Widower – lives alone or with other non-family members:
  • Death certificate of decedent
  • Copy of the cédula or passport of the applicant
  • Photocopy of the public deed of the property purchase OR Certificate issued by the Public Registry of Panama
    • very important that this already be updated in ANATI
  • Copy of the Court Order settling the estate in their favour

Private Interest Foundation:

A Private Interest Foundation may apply either as a Primary Residence or Family Taxable Assets, respectively.  In this case, it should provide:

• copy of the cédula of the legal representative
• Original certificate from the public registry of the legal entity
• Photocopy of the public deed of the property purchase OR Certificate issued by the Public Registry of Panama
  • very important that this already be updated in ANATI
• Document which clearly appoints the beneficiares of the foundation

Trust

For a trust to be able to apply  – either as Primary Residence or Family Taxable Assets – it should provide:

• Authorisation by the settlor of the trust, duly notarised, in which they authorise the Trustee to request the tax status as Primary Residence or Family Taxable Assets
• Copy of the Deed of Trust
• Photocopy of the public deed of the property purchase OR Certificate issued by the Public Registry of Panama
  • very important that this already be updated in ANATI

Pensionado application

For a pensioner to apply – either as Primary Residence or Family Taxable Assets – they should provide:

•  Copy of the cédula of the applicant
  • for a foreigner with residency as a pensioner – the cédula issued by the Civil Registry
• Copy of the Pensioner card issued by CSS otherwise pay slip issued by CSS
• Copy of the retiree card issued by CSS
• Certification of retirement status issued by a foreign government, duly legalised and translated to Spanish, for foreigners.
• Photocopy of the public deed of the property purchase OR Certificate issued by the Public Registry of Panama
  • very important that this already be updated in ANATI

A pensioner MAY REQUEST that the benefits established by Law 6 (1987) – pensioner benefits – then apply to this property with these additional benefits.

First home purchase

The purchase of your first home – primary residence or family taxable assets – gives you a special tax exemption for the first 3 years.

Of course, this must be your FIRST home, and must be either your primary residence or your family taxable assets. The value may be between $120,000 to $300,000.00.  In this case the following documents must be presented:

• Copy of the cédula or passport of the applicant
• Photocopy of the public deed of the property purchase OR Certificate issued by the Public Registry of Panama
  • very important that this already be updated in ANATI
• The certificate of the public registry must indicate the properties which the person has previously had by virtue of sale & purchase.
• Occupation permit of the new building or copy of the public deed where the occupation was transcribed or certification issued by the respective City Council where the property is located

Where the property is newly built – the 3-year exemption begins from the earliest date:

1. the occupation permit was issued
2. the registration of the transfer of title

Where the property was pre-owned – the 3-year exemption begins from the date the transfer of title was registered.

Sworn Affidavit – Declaración Jurada

The DGI (Dirección General de Ingresos) may, by resolution, establish the form, time frames, specific details and conditions that the swon declaration must fulfill.  We do not yet have these details.

The application

The application may be made:

• online – through e-Tax 2.0
• at the head office of the Dirección General de Ingresos
• at Provincial offices (i.e. David, Bocas del Toro, Santiago, Chitre, Los Santos, Penonome, Chorrera & Colon)

We will provide a separate blog post regarding the cancellation & changes to the registration of family taxable assets (such as for divorce or other circumstances).