What Happened
A new 2% Impuesto de Transferencias de Bienes Inmuebles on newly built homes is already dividing Panama’s housing sector. Developers and promoters will be responsible for paying the tax on new properties, and the debate has quickly centered on whether the cost will be absorbed within the business model or passed on to buyers.
The Cámara Panameña de la Construcción says the impact can be managed without significantly affecting homebuyers. The Consejo Nacional de la Vivienda, however, warns that the measure will raise prices and slow investment in a market that is already under pressure.
According to Alejandro Ferrer Solís, former president of Capac, the tax is one more cost in a long list that already shapes the final price of a home, along with land, materials, labor, plans, infrastructure, inspection, company expenses and profit margins. In his view, the charge does not automatically become a separate bill for the buyer when a property is reserved.
How the Cost Could Filter Through
Ferrer said that if a home priced at $70,000 rose to $71,400 because of the tax, the 2% initial payment would increase from $1,400 to $1,428. That would mean an extra $28 for the customer. He added that, if the adjustment were added to a mortgage, the monthly payment could rise by about $10 to $15, depending on the loan terms.
He also pointed to the usual discounts and incentives offered by developers and banks during housing fairs, saying those promotions can help offset added costs. Capac’s position is that the market remains open and competitive, giving promoters room to decide whether to transfer the tax to the final price or absorb part of it themselves.
The discussion comes as Expo Vivienda Capac 2026 is set to open from April 16 to 19 at the Panama Convention Center, a key event for the housing industry that typically concentrates financing offers, promotional prices and buyer interest.
Why the Sector Is Worried
Convivienda takes the opposite view. Elisa Suárez, the group’s director, said the tax will end up increasing the final price of homes and reducing demand at a time when construction activity is already weak.
Suárez argued that higher costs will discourage new projects, shrink investment and eventually lead to fewer jobs and less economic activity. In the sector’s view, a tax that affects the first sale of new homes may hit a highly price-sensitive market, where even small increases can delay buying decisions or push families out of the market.
During a conversation that included Convivienda representatives, economist Eric Molino Ferrer and labor specialist René Quevedo, the issue was framed as one that goes beyond a tax collection decision. The concern is that a higher tax burden on new housing could reduce the pace of sales, slow project rotation and weaken an industry that feeds a wide chain of suppliers and workers.
Broader Economic Context
Ferrer acknowledged that construction is not performing at its strongest level. He said the total value of construction permits in December 2025 was 39% lower than in December 2024, reflecting a slowdown across residential, non-residential, public and private works. He also said the industry has lost jobs and that growth has been slow and modest.
The debate now centers on what helps Panama more: taxing the first sale of new homes more heavily, or preserving incentives that keep construction moving, generate employment and create other streams of tax revenue. For now, the 2% ITBI has become more than a fiscal measure — it is a test of how Panama balances housing affordability with public revenue and economic activity.