A great reason to invest in Panama property is the fact that earlier this year Balbin Herrera, the Panama Minister for Housing announced that Panama will be expanding its property tax exemptions for international investors. Any overseas buyers that invests in a new housing development that has its building permits issues prior to the end of December 2009 will be exempt from paying taxes on property transactions through until 2030. 

Panama has been of huge interest for a decade or so now, firstly with Americans and Canadians looking for a tax friendly place to retire. In recent years Panama has opened the doors to international property investors from much further afield by introducing more tax incentives for individual investors and well as commercial ones. 

Off plan developments were initially prevalent in and around Panama City and still continue today. However the coastal areas of both the Pacific and Atlantic Oceans are also becoming popular, but these new off plan developments are being driven by European buyers and long term residents who want to buy quality off plan resorts, rich with onsite facilities and management companies, as against the more traditional condo investments that are common in Panama City. 

For property investors from across the Atlantic there is obviously a distance issue and these investors are used to having management companies with offices either onsite or nearby to deal with their rentals and any maintenance issues that may arise, plus providing a certain security for their real estate.    The recent introduction of new laws aimed at creating favourable tax breaks are sure to push demand of quality off plan developments even higher.

With the trend for long haul holidays, longer stays and overseas retirement on the increase, countries like Panama are striving to be the number one choice for both the international investment but also for the tourism driven revenue that will follow quickly as the off plan developments become signed off and ready for use.    Increasing regular flights from Europe will encourage families to try something different in this tropical location, as will the continued weakness of the US dollar, which is making these properties extremely attractive from a price perspective.

Panama City has been boasting rental revenues of between 7 and 11% for the last year or so and these numbers are based on long term/annual rental yields in Panama City, which tend to be poorer than short term holiday rental yields of properties in quality resorts and beach side locations. There are close to 300 off plan condo/apartment projects either in construction or on the drawing board in Panama City, which, if all are completed, will provide more than 40,000 new units in the city. This could have an effect on rental yields, but given the recent rental revenues, there is a lot of room in the market before they become "standard rental yields."

Off plan resort developments near the coasts provide a new market and a potential for higher returns as they are aimed at wealthier residential tourists AND short term holiday rental markets. The introduction of Pensionada Visas a number of years ago, provided easy access to retirees who wanted to buy a cheap property and enjoy an inexpensive lifestyle. Even today the criteria for receiving a pensionista in Panama is very straightforward and open to a multitude of people from around the world and you do not even have to be retirement age - anyone from 18 years old who can meet the criteria can become a retiree in Panama.