What Happened
People buying a new home in Panama for the first time now have to budget for a 2% tax under the Real Estate Transfer Tax, or ITBI, a charge that was exempt for more than 50 years on newly built properties. The tax was previously applied only to used homes in the secondary market.
The new cost comes at the moment buyers complete the purchase through the developer. On a $75,000 property, for example, a buyer would need about $3,000 for the down payment and another $1,000 for the tax, bringing the upfront total to roughly $4,000.
Impact on Buyers
Housing industry representatives say the measure will put homeownership further out of reach for many families. Convivienda has warned that 72% of the population earns less than $800 a month, leaving many households without the income needed to cover both the down payment and the tax.
Economist Eric Molino Ferrer said Panamanians earning more than $1,000 a month may be able to save for the required amount, but that it would take around 10 months for many of them to gather the money because part of their income is already committed to other expenses.
The new tax was introduced through a reform to the Preferential Interest Law, which removed the deduction and exemption that had applied to new housing. For the sector, that change marks a major shift in how first-time buyers will enter the market.
Warnings From the Housing Sector
Convivienda says the tax could discourage both buyers and developers. Elisa Suárez, the group’s director, said the levy could reduce demand for new homes and also slow construction activity, affecting the broader housing market.
Norberto Delgado, president of the association, said construction has a broad economic impact, noting that every $1 invested in the sector generates $2.34 in the economy and $0.24 in tax collection. He argued that taxing new homes could end up reducing overall revenue if fewer projects are built and fewer units are sold.
Industry estimates suggest the ITBI could generate $37 million over 10 months. But the same calculations indicate the country could lose $13.5 million in consumption tax and income tax revenue if construction activity slows and fewer homes are completed.
Housing Market Under Pressure
The tax comes after a difficult year for the housing market. In 2025, sales of new homes fell as banks delayed financing tied to the preferential interest program and uncertainty built around the law. Convivienda said only 4,020 units were delivered last year, a 34.38% drop from 6,126 in 2024.
For 2026, the group projects sales of $634.75 million and about 5,530 housing units. Even so, the sector warns that the tax could weaken those expectations at a time when Panama faces a housing deficit of 180,000 homes.
Labor market analyst René Quevedo also pointed to weak formal employment, saying 105,000 jobs were lost in the interior of the country. That, he said, leaves many families without the stable income needed to qualify for a mortgage or take on the added cost of a new home.