Summary.
The bill aims to facilitate the purchase of used or secondhand homes through economic incentives linked to mortgage loans. It defines these homes as properties that have been occupied at least once and are intended to serve as the buyer’s residence. It also proposes changes to the property tax and establishes a tax on certain transfers of used homes. These provisions concern the purchase, mortgage financing, and value of the property acquired.
To qualify for the incentives and the preferential mortgage loan, the loan must finance the purchase of a property previously used as a home, and it must be the first property acquired by the borrower. The security must be a mortgage lien on the purchased property, duly registered with the Public Registry. A beneficiary may receive the subsidy only once and is ineligible if they have already benefited from the preferential interest rate program for new homes. The beneficiary must be Panamanian or a foreign national with permanent residency.
Regarding financing, the bill provides that the difference between the Reference Rate and the lower rate that the lender, at its discretion, actually charges on each preferential mortgage loan will be 2%. The loan must not exceed 300,000 balboas (B/.300,000.00) and will have a maximum term of 10 years. The provision thus links the preferential rate to the rate actually charged by the lender and limits the amount and duration of loans covered by the incentive.
The bill amends paragraphs 1 and 2 of Article 766 of the Tax Code, concerning the combined progressive property tax rates for property qualifying as tax-designated family property or a primary residence. It proposes a rate of 0.00% on the taxable base from zero to 300,000 balboas (B/.300,000.00), and 0.50% on the taxable base from 300,000 balboas (B/.300,000.00) to 700,000 balboas (B/.700,000.00). It also adds Article 4-A to Law 106 of December 30, 1974, establishing a 3% tax on transfers for consideration of used or secondhand homes valued at no more than 300,000 balboas, whether made through sale, exchange, transfer in lieu of payment, or another agreement that transfers ownership. Article 7 reiterates both legislative amendments, and Article 8 provides for the law to take effect on January 1, 2026.
Given its content, the bill concerns the Public Registry, lenders that would grant mortgage loans, buyers of used homes, and those who transfer such properties. It may also be of interest to the mortgage financing and real estate sales sectors because of the preferential loan conditions and the taxes associated with property ownership and transfer.
What it proposes.
- Economic incentives for purchasing used homes.
- Conditions governing preferential mortgage loans.
- Property tax rates and taxes on transfers for consideration.
Who it would affect.
- First-time buyers of a used home who are Panamanian or foreign nationals with permanent residency.
- Lenders of preferential mortgage loans.
- Persons who transfer used homes covered by the bill for consideration.
Key points.
- Defines a used home as a property previously occupied at least once and intended as the buyer’s residence.Art. 2
- Requires the loan to finance the borrower’s first property and the mortgage on the purchased property to be registered with the Public Registry (Registro Público).Art. 3
- Limits the subsidy to one occasion and excludes those who received preferential interest rates for new homes.Art. 3
- Sets a 2% difference for calculating the preferential interest rate, a loan limit of 300,000 balboas (B/.300,000.00), and a maximum term of 10 years.Art. 4
- Proposes rates of 0.00% and 0.50% for the specified property tax brackets applicable to tax-designated family property or a primary residence.Art. 5
- Establishes a 3% tax on transfers for consideration of used or secondhand homes valued at no more than 300,000 balboas.Art. 6
- Provides that the proposed law would take effect on January 1, 2026.Art. 8