The Panama ITBI exemption for new homes is now law. Law 546 of August 31, 2026 exempts the first B/.120,000 of the taxable base from the 2% Real Estate Transfer Tax (ITBI) on the first sale of a new home, and applies reduced tiered rates to the portion between B/.120,000 and B/.200,000.
Law 546 of August 31, 2026, modifies the rules governing the Real Estate Transfer Tax (ITBI) and establishes an exemption for the first B/.120,000 of the taxable base on the first sale of new homes.
Table of Contents
Key Facts: Panama ITBI Exemption under Law 546
- Law: Law 546 of August 31, 2026, sanctioned by President José Raúl Mulino
- Amends: Article 4 of Law 106 of 1974, which regulates the ITBI
- Tax affected: ITBI – Impuesto de Transferencia de Bienes Inmuebles (Real Estate Transfer Tax), general rate of 2%
- Exempt amount: the first B/.120,000 of the taxable base
- Tiered rates: from 0.50% to 1.80% on the excess, up to a taxable base of B/.200,000
- Applies to: the first sale of new homes, formalized within the legal deadlines tied to the occupancy permit
- Transitional provision: covers certain first sales formalized after the law takes effect, even if the occupancy permit was issued earlier
- Responsible authority: Ministry of Economy and Finance (MEF)
- Currency: the Balboa (B/.) is at par with the US dollar (B/.1 = US$1)
What Does Law 546 Establish for the Panama ITBI Exemption?
The President of the Republic enacted Law 546 of August 31, 2026, which modifies Article 4 of Law 106 of 1974, the law that created Panama’s Real Estate Transfer Tax, and establishes new tax treatment for the ITBI on the first sale of new homes.
The law establishes that the first B/.120,000 of the taxable base is exempt from ITBI, provided that the conditions established by law are met.
The measure is intended to facilitate access to new housing and, according to the Ministry of Economy and Finance, also seeks to stimulate the construction industry and contribute to job creation.
This Does Not Mean All New Homes Are Exempt
An important point is that the benefit does not eliminate ITBI for every home or every real estate transaction.
The exemption applies to the first B/.120,000 of the taxable base on the first sale of a new home. When the taxable base exceeds this amount but does not exceed B/.200,000, the tax is calculated only on the excess amount, using tiered rates.
The applicable rates on the excess are:
| Portion of the taxable base (excess over B/.120,000) | ITBI rate on the excess |
|---|---|
| More than B/.120,000 up to B/.130,000 | 0.50% |
| More than B/.130,000 up to B/.150,000 | 1.00% |
| More than B/.150,000 up to B/.170,000 | 1.40% |
| More than B/.170,000 up to B/.190,000 | 1.60% |
| More than B/.190,000 up to B/.200,000 | 1.80% |
For amounts above B/.200,000, the application of the tax must be analyzed according to the regime established by law.
A Change That Could Influence New Home Purchases
For those considering purchasing a new home, the amendment reduces one of the costs associated with the buying and selling process in transactions that meet the requirements.
This may be particularly relevant for buyers who need to calculate not only the property price but also the costs associated with formalizing the transaction.
From a market perspective, lower upfront costs may facilitate certain purchasing decisions and contribute to increased activity in new housing projects.
Impact on Construction and the Residential Market
The measure’s impact also extends beyond the buyer.
The MEF itself states that one of the objectives of Law 546 is to stimulate the construction industry, a sector that impacts employment, materials, professional services, financing, and other related activities.
If the measure helps accelerate the sale of new homes, it could also support residential projects that are under construction or in the sales process.
For developers and companies connected to the sector, it will be important to observe how the market responds to the new conditions and which housing segments may benefit from this change, building on the outlook in our CAPAC 2026 real estate market analysis.
What Should Buyers and Sellers Keep in Mind?
The application of the benefit is subject to specific conditions.
The home must be new and involved in the first sale transaction, and the purchase and sale must be formalized within the deadlines established by legislation in relation to the occupancy permit.
In addition, the Law includes a transitional provision for certain first sales formalized after it enters into force, even when the occupancy permit was issued previously, provided that the established conditions and deadlines are met.
Because this is a tax regulation with specific requirements, each transaction should be reviewed individually before determining whether it qualifies for the benefit. If you are evaluating a new home purchase, you can book a consultation with Liseika González to review your options.
A New Variable for Panama’s Real Estate Market
Law 546 introduces a new variable into Panama’s new housing market.
Its impact will depend on how buyers, developers, banks, and other industry participants respond to the new conditions. However, the change is significant because it modifies one of the costs associated with the first transfer of certain new homes.
For those following Panama real estate market trends, the question now is how this tax amendment may influence demand, project sales, and new housing development in the coming months. 🇵🇦
Frequently Asked Questions about the Panama ITBI Exemption
What is the ITBI in Panama?
The ITBI (Impuesto de Transferencia de Bienes Inmuebles) is Panama’s Real Estate Transfer Tax. It is regulated by Law 106 of 1974 and has a general rate of 2%, applied when a property is transferred.
How much of a new home is exempt from ITBI under Law 546?
Law 546 of August 31, 2026 exempts the first B/.120,000 of the taxable base on the first sale of a new home. If the taxable base is above B/.120,000 but not above B/.200,000, the tax applies only to the excess, at tiered rates from 0.50% to 1.80%.
Does the Panama ITBI exemption apply to every home purchase?
No. It applies to the first sale of new homes that meet the legal conditions, formalized within the deadlines tied to the occupancy permit. Resale homes do not qualify, and each transaction should be reviewed individually.
What does “impuesto de transferencia de bienes inmuebles” mean?
It is the Spanish name of the ITBI, the Real Estate Transfer Tax. It is how the tax appears in Panamanian legal documents, closing statements, and local searches, usually shortened to ITBI.
How could Law 546 affect Panama real estate?
By lowering the upfront cost of buying a new home, Law 546 may encourage purchases in new housing projects. The MEF also expects it to stimulate construction and job creation, which could support projects under construction or in sales.
