Last December the government enacted Law 80, which deals with right of possession land ownership and sets forth the process for the titling of coastal and island properties. This new law is hailed as a victory for property development and years of development logjams are finally coming to an end. Those holding right of possession of these properties can now apply for full title.
The titling of these properties will be handled by the Organo Ejecutivo’s Catastro office. Owners must prove the physical, non-interrupted possession of these properties for a minimum of 5 years in order to become titled. Properties that cannot be titled include the shores of beaches, lakes and rivers, harbors, estuaries, coastal marine ecosystems, indigenous territories, and public domain.
Evidence of rights of possession ownership can be proven by the residential, commercial, agricultural, or touristic use of the land. Further proof includes permits and documents issued and/or stamped by government and local authorities, community witnesses, neighbors and documents issued by police authorities.
Island properties are only going to be able to be titled if the use of the land by the occupants is for specific purposes of development for the country’s benefit or if the area has been declared a special development area by the Organo Ejecutivo and if the area hasn’t been declared a strategic zone reserved for government programs.
The government can grant free title for lands up to 50,000 square meters (5 hectares) with Public Registry inscription exonerating all taxes and administrative fees to those having rights of possession. Future transfer of free titled properties will be subject to the Title Transfer Tax like all other properties.
Law 80 sets forth tables with the purchase price of all other qualifying properties based on quantity and location. For instance, land located from Punta Chame to Playa Gorgona between 5 to 30 hectares will pay $60,000 per hectare and $150,000 per hectare if more than 30 hectares. Yet, those titling property located inland on Isla del Rey will only pay $3,000 per hectare up to 30 hectares and $6,000 per hectare for over 30 hectares.
The Organo Ejecutivo can change the land values every 3 years based upon appraisals and market value.
Purchasers will have 15 years to complete payments and the government will have a lien on the land until it is paid in full. During this time, the property’s title cannot be transferred except to blood relatives or spouse.
All applications for titling will be made public and transparency of ownership will be required. That means anonymous ownership via corporation with bearer shares or nominee directors and officers will be required to reveal the true owner.
Catastro guarantees public access to shores, beaches and islands. Violation of free public access to these beaches will be considered an administrative infraction and fines will be incurred.
This is an article written by Jessyca Angulo, Attorney with Panama Offshore Legal Services, for www.panamabusinessandtravel.com, a site offering information on Panama in both business and tourism. Readers wishing to find further information regarding the country of Panama should visit www.panamabusinessandtravel.com or write the author at jessy@pos-inc.com.
