Glossary · Taxes
Capital gains tax (10% / 3% advance)
Definition
In Panama, the gain on selling real estate is taxed at 10%. The buyer withholds and remits 3% of the total price as an advance; the seller can treat that withholding as the final tax or claim a refund if 10% of the actual gain turns out lower.
In practice
The 3% is computed on the full price (not the gain), so in low-appreciation sales it can exceed the true 10% — that's when the DGI refund process makes sense, with the acquisition-cost paperwork in order. Practical lesson: from day one, keep the purchase deed, improvement invoices, and closing-cost receipts; they're the cost basis that will reduce the tax when you sell. General information, not tax advice: confirm each case with an accountant.
Keep going
Panama property tax guide →General information, not legal or tax advice. Every transaction is confirmed with an attorney and accountant.
Term reviewed as of July 2026 · Vaca Group Real Estate, Lic. PN 5904