| Squatters
often move onto government lands and acquire ownership after a number of
years.
Squatter
Property
Squatters
are poor families who inhabit an area that is unoccupied. Rights to the
property are granted after a number of years of occupancy. This kind of
property is very hard to purchase because it may not be titled.
Titled Property
Most
Preferred
This land
is titled in the owner's name. When you buy the property, the title is
transferred to your name and recorded in the National Registry. From that
point on the property is yours. Titled Property is the only kind of property
you should buy and sell. You will know a property is titled if an Escrituras
exists in the National Registry.
The first thing
one might ask oneself is, “how much property do I actually need,
how am I going to maintain it, and where do I want to locate. Prices vary
depending on the size and location of the property. When speaking of location,
there are three areas in Chiriqui that are attractive and have an abundance
of titled properties. These areas are, in order of tourist development
and resulting purchase price, Volcan, Bocas del Toro, and Boquete with
Boquete being the most highly developed. Bocas del Toro is just being
discovered, and Volcan is right on the edge of it.
These three
areas allow you to pick your climate, depending on elevation. Bocas del
Toro is right on the Caribbean, so the weather there will be warm and tropical,
with sea breezes and a light rainy season during August through January,
usually. When I say rainy season, I don't mean weeks and months of rain.
Nowhere in Panama does it rain endlessly on end. During the rainy season
in Panama, there will be a morning or an afternoon shower (or deluge) followed
by sunny weather. Although we sometimes, but rarely, get the the tail end
of a frontal zona originationg in the US and Canada that gets this far
south, or the traces of a distant tropical storm, Panama's rain is primarily
generated by heat convection. This is entirely true of Bocas del Toro.
Volcan is in
the area of highest elevation, so the weather will be very cool with a
pronounced rainy season. Rainfall in this area will also have orographic
origins. As air laidened with water vapor from the Caribbean gets pushed
up over the mountains by the Trade Winds. When this happens, the air is
cooled and the vapor is precipitated out as rainfall. In Volcan, on windward
mountain slopes, rainfall can be less sporadic in the rainy season bringing
a cool freshness to already great weather.
Boquete is
in Panama's highlands, too, and also has refreshing highland sweater weather.
Parts of Boquete, though, are much like California's High Chaparral. This
is especially so on the rainshadow side of the mountains. On most days,
the air in Boquete is dry and crisp. It can remind you of Aspen without
the snowy peaks and pines. Both Volcan and Boquete boast of the abundance
of colorful flora that grows year-round. There are even tall standing pine
tree forests surrounding coffee plantations. The smell of vitality fills
the air. Actually, wearing a sweater is a matter of choice. Viva
highland climates.
As we are located
in a “rural area” tax laws are lenient, do not exist or not collected.
If you decide to build, you can apply for a new home exemption of taxes
for the first 20 years. On top of that, not only are you tax exempt for
properties valued under $20,000 but any such taxes above that (if declared),
are frozen at that amount until you resell.
Okay, so I
have roused your interest, you came and made you exploratory trip, found
something you like and want to buy. What next?
First of all,
you do not need a lawyer to make the transaction if you have proper and
reliable guidance. If you feel safer with a lawyer, no problem but it is
an extra cost (about $500) for some thing you don’t need, but might feel
better with. There is no such thing as an Escrow. The government operated
public Notary is the acting agency, and they are the final authority. It
is their job to see that the transaction meets all legal criteria pertaining
to land transfers.
Here are the
steps to purchasing property. You'll see that much of the purchasing process
is identical in nature to in the US. The bottom line is Panamanians, just
like citizens of other nations including the US, have been buying, selling,
and transferring property for centuries. Safeguards against fraudulent
activities have been set in place to protect your purchase long before
your arrival. Before, during, and after the purchase of your property,
you can rest assured that your interests, and those of the seller, are
protected by legislated law.
Step 1:
Agreement and Research
You've found
your property and have agreed on a price with the owner. Next, you inspect
the title (Escrituras). This document states the owner and description
of the property. The seller has to also provide a map describing the size
and its location. You also request a recent “Certificado de Registracion”
which is similar to a title search in the US. This document will indicate
if there are any leans or other legal complications against the property.
All documents must be originals and have the signatures and stamps from
the registration office. At the end of this step, you've confirmed the
owner of the property and its location, and you've determined there are
no existing leans or other legal complications against the property.
Step 2:
Bill of sale & Taxes
The seller
and the purchaser, or representative agent, go to the nearest city and
obtain a form for a “bill of sale”. This document lists the seller and
buyer and is basically used for sales tax purposes. It is a common practice
to declare the sale price of the property at a lesser price than the amount
paid. This is for two purposes, first, keeping the sales tax low and second,
trying to keep it less than the $20,000 for tax exempt status (There are
never property taxes on property valued under this amount, Never!). You
will receive a receipt and a copy of the form. Then you're off to the nearest
Notary Public with your representative agent and the seller to transfer
the title of the property.
Step 3:
Title Transfer
First, a note
about Notary Publics in Panama and elsewhere in the region. A Notary Public
in Panama does a lot more, is granted far more responsibility than a Notary
Public in the US. A Notary Public in Panama, and also in other countries,
is a high ranking official. In Costa Rica, for example, only lawyers can
be Notary Publics. Government run Notary Publics have the final authority
in regards to any legal transactions. Whether it be buying property or
making a legal contract, they do it all.
The old title,
all previous land documents, and the new tax form are presented to the
Notary with a minimal fee. The Notary in turn takes all the appropriate
data, including that of the new owner, and types up the new title with
the new owner's name, the seller, a description of the property, the location
of the property, any special terms that may apply, etc. These documents
then go into the Chief Notary’s office for final approval.
Step 4:
Transfer of Funds for Purchase
Once the Chief
Notary has signed these documents, it is then and only then that funds
transfer hands. Payment is preferable by a certified check on a bank in
Panama, the one you've wire transferred money to. If a third party is involved
then any commission or service charge in the form of a certified check
are also to be made. Same as in the US.
I've also known
buyers to complete steps 1, 2, and 3 before wire transferring the funds
for purchase. That involves putting up a deposit, usually about 3% of the
sale price, and the buyer and seller signing a document stating that the
balance is due once steps 1, 2, and 3 have been completed. In many cases,
the buyer can authorize the bank that receives the wire transfer to disperse
the balance once these steps have been satisfactorily met. You can bet
the bank will help you double check all is in order before turning over
the balance in Step 4.
Step 5:
The National Registry
Nothing gets
done or completed in Panama until it is submitted to the National Registry
and duly recorded. This is true whether it be a birth, death, marriage,
divorce or buying property. This process normally takes several weeks but
can be speeded up by having the documents hand delivered and presented
to the main office of National Registry in Panama City. Once you have the
title in your hands with all the appropriate signatures and stamps,
it is yours!
Congratulations!
You now own a piece of paradise at an affordable price in a place where
it costs very little to live like a King. Don't sell it to the first gringo
who offers you twice what you paid. Keep it for at least a few years, until
prices go through the roof.
May I say in
closing, that Panama is an excellent place to retire. Panama's government
has not only passed special visa legislation but generous benefits as incentive
to potential retirees. The government realizes that the economic trickle
down effect of retirees from North America out weighs that of only the
potential tourism. All these great incentives are perhaps the best
in the 40 countries I have traveled. Please feel free to contact
me directly if you require more information and assistance.
Additional
Resources
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