Mulino Signs Law Exempting First-Time Buyers from 2% Property Transfer Tax on New Homes

Panama has removed the initial property transfer tax burden on qualifying new homes after President José Raúl Mulino signed Law 546 of 2026 on Aug. 31. The law exempts the first $120,000 of the taxable base when a buyer purchases a new first home.

The measure applies when the sale is formalized within two years of the occupancy permit issued by the competent authority. If a home costs more than $120,000 but no more than $200,000, the tax will apply only to the portion above $120,000, under the rates established in the legislation.

A special arrangement covers the first sales of new homes formalized after the law enters into force. Those transactions may qualify even if the occupancy permit predates the law, provided the sale takes place within 30 months of the permit’s issuance and meets the other conditions.

The legislation was proposed by the executive branch, approved by the Cabinet on July 28 and later passed by Panama’s National Assembly with 53 votes on Aug. 26. Economy and Finance Minister Felipe Chapman, who promoted the proposal, said it was aimed especially at middle-income families by removing the upfront payment of the tax when they buy a new home.

The government also expects the measure to support construction, which it considers a strategic sector because of its contribution to economic activity and jobs. Sales completed before the law takes effect will remain governed by the rules in place when those transactions were formalized.