ITBI 2026 in Panama: What It Is, How Much You Pay, and How It Affects New vs. Used Homes

If you’ve been hearing about the ITBI in recent weeks and still aren’t sure what it is or how it affects you, this article is for you. This tax has become one of the most discussed topics in Panama’s real estate sector—and for good reason: its direct impact on the buyer’s wallet is significant, especially for those looking to purchase their first home.

Here’s a simple explanation, with real examples, clearly showing the difference between buying a new home and a used one.

What is the ITBI?

The Real Estate Transfer Tax, known as ITBI, is a 2% tax applied every time a property changes ownership in Panama. It is calculated based on the higher value between the sale price and the cadastral value of the property, and it is paid by the seller to the General Directorate of Revenue (DGI) before registering the transfer with the Public Registry.

This tax is not new; it has existed since 1974. What changed in 2026 was the elimination of the exemption that protected the first sale of new homes, which had been in place for more than 50 years, through Law 468 of 2025.

“The tax already existed; what existed was an exemption from paying it.”
— Felipe Chapman, Minister of Economy and Finance, April 2026

How much does it represent in real money?

Let’s look at concrete examples:

• $75,000 home: ITBI equals $1,500. Combined with a typical 5% down payment ($3,750), the buyer needs $5,250 just to start the purchase. Without the ITBI, it would have been $3,750.
• $100,000 home: ITBI equals $2,000. The down payment is $5,000, bringing the total upfront cost to $7,000.
• $120,000 home (preferential interest cap): ITBI adds $2,400 to the upfront cost. For many families earning between $1,000 and $1,500, that amount can delay the purchase by up to 10 additional months.

The impact is clear: ITBI doesn’t directly raise the sale price, but it does increase the amount of cash a family must have saved before they can buy. In a country where more than 40% of household income is already committed to debt, that margin is very tight.

How does it affect new vs. used homes?

This is the key question for anyone considering a purchase in 2026:

• New home: The ITBI is formally paid by the developer or seller, but in practice, that cost is passed on to the buyer through the final price or initial payment. In addition, new homes already have higher prices due to materials, labor, and developer margins, making the overall impact greater.
• Used home: The ITBI also applies, but the second-hand market offers more flexibility in price negotiation. In many cases, buyer and seller can agree on who absorbs that cost within the total price. Additionally, used homes in Panama’s interior start at more accessible price points, so the 2% represents a smaller amount in absolute terms.

For a family looking for their first home on a tight budget, a used home in the interior may currently be the smartest option in the market.

What you need to know before closing any purchase in 2026

• Verify the cadastral value before negotiating: if it exceeds the sale price, the 2% is calculated on the cadastral value, not the agreed price.
• The ITBI and the capital gains advance tax (3%) are paid at the same time: budget between 5% and 6% of the sale price to cover all closing costs.
• Without full payment, the Public Registry will not record the transfer: do not sign any deed without knowing the total amount required on closing day.
• The Ministry of Economy and Finance (MEF) is evaluating possible adjustments: in April 2026, Minister Felipe Chapman indicated openness to reviewing proposals regarding the ITBI’s impact. The regulation may change, but for now it applies in full.

Why working with a local advisor makes a difference

The process of buying property in Panama involves multiple variables that can change depending on the area, property type, and buyer profile. A local advisor with experience in the interior not only helps you find the right property—they also anticipate real costs, guide you through negotiations, and ensure the legal process is in order from day one.

At Top Investments Panama, we support our clients every step of the way, from the first consultation to the delivery of keys. We understand the interior market, have experience with both local and international buyers, and are familiar with the tax implications of each transaction.

Thinking about buying?

Before making a decision, talk to us. We’ll explain how ITBI applies to the specific property you’re interested in, what real costs you need to have ready on closing day, and the best strategy based on your budget and goals.

A well-informed decision today can save you months of delays and thousands of dollars in unexpected costs.