The Cost of Living in Panama

The Cost of Living in Panama

The cost of living in Panama is a very subjective topic and will vary depending on where you live, how you live, spending habits, your lifestyle, entertainment, eating out, food shopping, are you single, married couple or married couple with children and above all your budget. The Cost of Living in Panama

The cost of living in Panama is just like anywhere else, you can live moderately to ultra lavishly. So regardless of your budget you can and will find a place for you in Panama.


There are two ways to approaching the cost of living in Panama. The largest expense will be rent or a mortgage. This will be entirely up to you to figure out because as mentioned before it is a very subjective topic,.. How much can you afford to pay monthly for a place to live?


Calculating how much you can afford for rent/mortgage is the same as where you are residing now. The only difference is that you might find something that gets you more bang for the buck for the same price you are paying for now but this statement is also subject to your lifestyle and what country you are migrating from.


The second way to approaching the cost of living in Panama is to own your home free and clear of debt. If you are fortunate enough to do this then you will be ahead of the game because real estate taxes are fairly cheap.


Here is why. On January 01, 2019, according to Article 764-A of Law 66, 2017, all properties that are registered as Tributary Family Patrimony or A.K.A. Primary Residence (this includes land and construction improvements) that does not exceed a total value USD$120,000.00, will be exempt from paying property taxes. Depending on your budget and lifestyle this could be a home run. Finding a place at this price is not out of the question in Panama.


If you spend more than USD$120,000.00 and are registered as Tributary Family Patrimony or A.K.A. Primary Residence then you will fall under a different guidelines because Panama has a graduated property tax system and here is how it works…


Lets say you purchase a USD$200,000 home and register it as your primary residence. Your property tax liability would only be for USD$80,000.


Here is why. USD$200,000 minus USD$120,000 exemption = USD$80,000 of taxable value. Now we apply the tax rate of 0.5% for homes between USD$120,001 – USD$700,000 and you would only pay USD$400 a year in property taxes.


Primary residences worth USD$700,001 or more will have a tax rate of 0.7%