It set back and removed from the main road. Yet it is still close to neighbors.
And best of all, it is only 70 feet from the beach.
Check it out.
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To find out more about this property for sale click here.
You could build whatever you like here. It is level and fully accessible. As the video suggests, you could build 2-3 homes or a hotel. You could also keep the whole thing to yourself.
The property is in the Corazon de Jesus neighborhood of Puerto Armuelles. It is a friendly community right on the beach.
It is an area popular with expats. All the beachfront in the neighborhood has already been bought up by expats.
You can browse more property for sale in Puerto Armuelles here.
Puerto Armuelles is an increasing popular place for both expat retirees and investors. This is due, in part, to the near completion of the new 4 lane highway linking Puerto Armuelles to the Panama's InterAmericana main highway. The improved access has allowed many more people to discover the many charms of this wonderful beach town.
You will be more successful, if you know your goals before you begin
Once you are clear about your investment goals, not only does the whole process get easier, but you are much more likely to achieve your goals.
Which of these goals is yours?
1. Buying for Capital Gain
In the world of emerging markets, intrepid investors seek out not-yet-discovered locations. The idea is to buy in a location BEFORE it is discovered by too many other foreigners.
These investors buy in those emerging locations and wait. They simply wait until the market arrives and prices start rising due to increased demand. Of course, finding these locations is the key. The purchase may be in a remote area. But that is only a good idea if there are clear indications that infrastructure improvements will follow. If such investors are buying within a development, they tend to purchase early in the roll-out of the master-plan, and look to secure ‘founder’ or ‘charter membership’ deals as a result.
These capital growth investors will sell the property when their target resale price is easily achieved. Of course, the next buyer can also still make significant capital gains, but typically less than the pioneers in these not-yet-discovered areas can achieve.
2. Buying for Personal Use
This is usually someone looking for a vacation home. This investor wants a place to recuperate from their daily life. Usually they are looking to buy property in places that enjoy a good climate, access to amenities and where the lifestyle is very different from their life at 'home'.
Sometimes this investor also wants to rent out the property when they aren't using it. However, while they like the idea of a rental covering some of the costs, rental income is not their top priority. This investor type tends to be affluent and own more than one home, often in a different part of the world. Their overseas property(s) may be part of their larger investment plan.
However, if the location is still affordable, people without this kind of wealth can also enjoy 'a second home in the tropics lifestyle'.
3. Buying for Rental Income
These investors are looking to create a cash flow stream through rental income. Vacation rentals usually provide a much greater rental income than other types of rentals.
This investor seeks out locations that attract a sufficient number of potential renters, such as foreign vacationers, travelers, and retirees. Of course, this investor needs to buy property where the return on investment (ROI) pencils out.
Sometimes, people who are retiring overseas, will also invest in a rental property in order to supplement their retirement income. Or they will rent out their property until they are able to retire there full-time.
4. Buying for Retirement Overseas
Investors in this category are typically 5-6 years from retirement. They are looking for property that will provide them their ideal retirement lifestyle - and one they can afford. This means these retirees must be clear on both their retirement budget and their retirement lifestyle goals. Then they can be sure that the property purchase will meet both.
Oversea retirees usually also look for locations that have easy access to health facilities and shopping centers as well as areas that are safe and have low crime.
And like everyone, they also want to buy a property that will appreciate in value.
5. Buying to Transform Your Life Abroad
These are lifestyle investors. They want to start a new life abroad and enjoy a different lifestyle. Some may be downshifting, while others will be embarking on new adventure abroad. Some of these investors need to keep earning money. Some can retire early, especially if they retire some place with a much lower cost of living.
This investor type is a pretty diverse group. A segment of this type of investor might also like to purchase income generating properties such as a B&B, hotels or rentals.
Without a clear understanding of the kind of property that best meets your investment goals, you are in danger of buying the wrong property, but thinking it is the right one.
It could be that you fit into more than one investor type. That is fine. But then you must be clear why you are buying a specific piece of real estate. Which investor hat are you wearing for that particular property?Only then can you adequately evaluate where the purchase will achieve your goal.
Which type of property investor are you?
There is real estate in Puerto Armuelles to meet each of these investors types.
You can start browsing some of the property for sale in Puerto Armuelles.
Before investing in property anywhere, you should read Reyn's article
Know Thy Self - What To Do Before Buying Property In Panama.
There are 3 property tax exemptions available for titled property in Panama.
FYI: Property taxes are only levied on titled land in Panama. Right of possession (ROP) property is not taxed.
Under the new tax law, as of January 1, 2019, Panama offers full property tax exemption as follows:
Therefore, if the total value of your primary property (land and improvements) is under $120,000, it is fully exempt from property taxes.
Here is an example of how Panama's graduated property tax system works.
Scroll down to find out how property value is determined in Panama.
Find out more about Panama's 2019 property tax reform.
This exemption applies to farmland that meets both of the criteria below.
This means that if you live at your farm, you may want to subdivide so that your home is on a separate lot from the farm. That way, your farm would be used exclusively for farming and may qualify for the exemption. Also, you may have to reapply for the agricultural exemption every 5 years.
This exemption applies only to new construction, not to the land.
If the building permit was issued after July 2009, the following new construction property tax exemptions apply.
Remember, to get the exemption, you must register the property with the Exonerations Department at the Ministry of Economy.
From 1990 - 2009, Panama had a very popular 20-year property tax exemption for new construction of houses and condos. Actually, you can still benefit from it if you buy a home that is still within its 20-year tax exemption time frame.
However, you will have to pay property taxes on its increase in value. For instance, if the home was valued at $200,000 when it was registered for the exemption, that is the value that the property tax exemption covers.
If you then buy that property for $250,000, you will need to pay taxes on the difference, its increase in value of $50,000. Although, you can re-register the property in order to get the exemption to cover the new, higher value. Keep in mind the re-registering process takes at least 6 months and you will need to hire a lawyer to do the process for you.
The new construction tax exemption belongs to the property, not the owner. That means the exemption transfers to all subsequent buyers during the exemption time frame.
This property tax exemption is on new construction only. The land itself is not exempted. You must pay property tax on the land if its value is more than the exemption threshold.
See the "property tax rate" section below for more information.
Keep in mind, to receive the exemption, you must register your property with the Exonerations Department at the Ministry of Economy.
Ideally, you should do that immediately after you notify the public registry that you are the new owner of the property.
No one is going to come out and assess the value of your property for tax purposes. The Panamanian government does not employ assessors. It is assumed that the sales price is the same as the property's value.
In Panama, a property's sales price also determines how much tax you will pay. Which is one reason that sometimes the sales price that appears in the purchase contract is less than the actual sales price of the land. That way, both the new and old owner's tax bill is lower for Panama's various real estate taxes: property, capital gains, transfer, and more.
There is no need to look for a property tax exemption for Rights of Possession (ROP) property. You don't need one. ROP Property is excluded from property taxes. It is simply never levied.
In fact, ROP property is excluded from all land transaction taxes (capital gains, transfer fee, as well as property taxes). Learn more about ROP property in Panama.
The property tax you pay depends upon the value of the property as follows:
Primary Residence
$0 – $120,000 = Exempt
$120,001 – $700,000 = 0.5% tax
$700,000+ = 0.7% tax
Secondary Residence, Commercial Properties, Industrial properties
$0 – $30,000 = Exempt
$30,001 – $250,000 = 0.6% tax
$250,001 – $500,000 = 0.8% tax
$500,000+ = 1.0% tax
Prior to 2019, the property tax exemptions were as follows: 1st $30K of value - exempt, $30 - $50K - 1.75%, $50 - $75K - 1.95%, $75K+ - 2.1%. Condos were taxes at slightly different rates: 1st $30K of value - exempt, $30 - $100K - 0.75%, $100K + - 1.0%>
Panama's property tax is a graduated tax. That means that the property tax on your $250,000 house is NOT $1200 (i.e., 0.5% of $250,000). The correct yearly property tax bill would be $650.
Using the rates above, here are the tax calculations for a primary residence purchased for $250,000:
This adds up to a yearly tax bill of $650 for a $250K house.
Of course, if you have a new construction tax exemption, you would subtract that first before you started calculating your tax.
You will never get a property tax bill - ever.
If you forget to pay your bill, your 1st, last, and only reminder will be when you sell the property. Then you will get a big bill that includes all your past taxes due, plus a hefty fine.
Actually, it's more of a lien than a bill. You will not be able to transfer the title to the new owner until you pay that bill.
Find out more about taxes required when a Panama property is bought and sold on this page of our site.
Looking to buy Panama real estate, check out our property for sale in Puerto Armuelles.
Disclaimer: I am not a tax expert. Please consult with a Panama real estate lawyer for more information.
"When are going to put your Corazon de Oro properties on the market?"
The answer is very soon. In a matter of a few months.
Currently we are building an entry way to the property.
To give you a preview, I put together a short video on one of the beachfront lots.
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Walking out there, I am reminded just how beautiful a spot it is in.
I'll let you know when you can actually buy one. It will be fairly soon.
We are currently building an entry gate.
Find out more about these 19 lots, 9 of which are beach front, here.
One of the things that makes this property so special is that it's on a ravine so it has an abundance of trees and tropical birds.
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Also, it is only 90 feet from our favorite beach.
The house is in the popular Corazon de Jesus neighborhood of Puerto Armuelles. A neighborhood that is only a 10 minute drive from downtown Puerto Armuelles.
The other day I took these photos (below) of and by this house for sale.
This link has more photos and details about this beach house for sale in Puerto Armuelles Panama
Updated: 2/7/17
And it includes more than properties for sale.
Also, keep in mind, that not all of our properties are listed on-line or in this ebook of our properties.
We save some in reserve for those that make the journey to Puerto Armuelles to see our properties.
Download the listing book here.
Click to explore properties online.
1) Property for Sale in Puerto Armuelles area
2) Info About Puerto Armuelles
3) Places to eat dinner in Puerto Armuelles
4) Link to answers to many FAQs about Panama
5) Information about us at Living in Panama
Updated - August 2017
God forbid you forget to include a document, that can bring the whole process to a crawl.
The exception is if you are buying a property from a developer that already has a relationship with a bank.
These are usually the large developments, especially those who sell property in the pre-construction phase.
Then your loan can be granted in a matter of days.
But most property in Panama is not is those kind of developments.
UPDATE: It is now somewhat easier for foreigners to get a mortgage in Panama.
You still need alot of paperwork done. And they will check your credit report back home. But expats have had good luck going through Scotiabank for a mortgage loan. Scotiabank has loans for Panama resident and non-residents. Check out this link for more.
Some expats have had good experiences going through bestmortages to find a good mortgage loan.
But you do need to be under 75 years of age (see below for more).
In North America, qualifying for a loan is all about your credit history.
However in Panama, the banks focus on your ability to pay and the the property’s loan to value ratio.
What this means is that Panamanian banks require massive amounts of documentation.
Documents that:
Generally, Panama banks will only give loans on land that is
Note, All non- residents qualify for the same interest rate if approved, rates are not credit score driven.
If you think you will be applying for a loan, you should bring these documents with you to Panama.
Some banks require that you have a Panama bank account for at least 6 months before you can be given a mortgage.
Of course, every bank has slightly different requirements.
Once all the required documentation is in the bank's hands, it goes to the bank's credit committee.
They have 14 days to analyze your loan application. Once approved, the buyer gets to review the terms.
If the buyer agrees to the loan, he signs it and returns it to the bank.
In return the bank issues an irrevocable promissory letter for the approved loan amount.
If this seems daunting to you, you should read my "18 Ways To Finance Real Estate In Panama" post.
Also, if you are interested in one of our properties, we offer financing.
Find out more about our financing offer here.
When I was a poor college student, I wanted to go traveling. I was sad that I would never be able to afford it.
One of my professors, who had spent years sailing around the world, told me I was wrong.
He insisted you didn't need much money to do it, just the will to do it.
My reaction was anger. He just didn't understand my situation, etc.
Then a year later, without much money, I traveled for one year all around the world.
It was one of the greatest experiences of my life.
While I was angry with my professor at the time, he did plant the idea that maybe I could afford it.
I have traveled extensively since as well as bought and sold overseas property.
Two things, that at one time, I thought I would never be able to do.
One that will lead you to become an international real estate investor.
You never know.
This means that you refinance an existing house loan for a larger amount than the existing mortgage loan. Then you (the borrower) will get the difference between the original amount of the loan and the higher refinanced amount in cash.
You can do anything you like with that cash.
For instance, you could refinance your house in Houston, Texas. Take out the extra cash and use it to buy some property in Panama.
Investing that cash in something with a higher return than the new and higher refinanced amount of the loan is your smartest option.
We did used this type of refinancing to buy a rental property in the US. It turned out to be an excellent investment for us.
I don't know who else can do this, but Canadians can borrow up to an amazing 80% of the value of any Canadian real estate to take out ‘cash’ to purchase your overseas property. And it is at a very low interest rate.
For this loan a maximum amount of money is lent for an agreed upon period (term). The collateral is the borrower’s equity in their house.
It is smart to set up an Home Equity Line of Credit, even if you don't think you will ever use it. You won't be charged any interest unless you use it.
We always have an equity line of credit. It gives you the flexibility to quickly get cash.
Something you sometimes need to do to quickly capitalize on an amazing property bargain.
This is a loan in which the borrower uses the equity of his home as collateral.
A reverse mortgage is another way to use the equity you have built up in your home.
It is available to homeowners who have equity in their home and who are 62 years or older . It allows them to convert part of their equity in their home to cash.
The great thing about reverse mortgages is that there are no monthly payments. The loan is paid off when you sell the house.
If you qualify, you can tap into your home's equity to buy your dream property in Panama.
This is a specific type of asset-based loan financing. THe borrower receives funds that are secured by the value of a parcel of real estate that he or she is purchasing. These "hard money" loans are typically issued by private investors or companies.
Generally speaking, this type of loan is easier to qualify for, but the loan also comes with higher fees and interest rates.
This can be either an unsecured or secured loan.
This is one of our favorite types of loans. We have been both lenders and borrowers of personal loans.
Especially if you are self-employed, as we are, it can be next to impossible to get a loan from a bank these days.
Of course, you have to know people who not only have "extra" money, but with whom you feel comfortable asking to borrow it. Depending upon the type of property you are investing the money in, you will have to figure out if you will make payments with interest over time, give them a portion of the deal, or some other renumeration.
We have had great success with this method. Of course, you must have a clean financial track record with the person who you ask to borrow money from. In general, it is a win-win situation.
Self directed or self managed IRAs give you complete control over selecting and directing where to invest your IRA - including real estate.
If you have an IRA at a traditional brokerage, you can roll it into a self directed IRA. Then you can use your IRA to invest in overseas real estate.
However, this option is not for everyone. You need to be actively involved in managing your IRA and to learn the rules of the self-directed IRA. Also, depending upon how it is used, it may generate taxable income.
For a summary of the issues, visit fox business news here.
Explore Our Puerto Armuelles Property Listings.
Our properties are both affordable & beautiful.
Most credit cards allow you to withdraw cash either from an ATM or over the counter at a bank or other financial institution.
This allows you access to quick cash if you stumble upon a great real estate bargain.
You take your credit card, head on over to an ATM, and withdraw cash. Or you might be able to do a balance transfer straight into your checking account.
This is especially appealing if you have a card that offers 0% interest for cash advances for say 6 to 12 months.
That way you can buy that great piece of property and then pay back the original amounts before you ever get charged interest. Nothing better than an interest-free loan for a good investment.
This is like the Cash Out Refinance on your home. It is a refinancing of an existing auto loan, where the new auto loan is for a larger amount than the existing auto loan, and you get the difference between the two loans in cash.
You can do this if you have a paid off car. You can then secure a new auto loan, and use that cash. If the interest on the car loan is less than you will think you will make on the investment, especially if its a short-term investment, it is a sound option.
You have money invested in the stock market that you instead use for overseas real estate
Cash out some of your stocks or bonds and invest the proceeds in real estate.
Make sure you factor in the capital gains tax you will have to pay on the sale of those stocks and bonds
This is another option for getting around the more traditional loan route.
Some sellers offer to finance your purchase of their property. This way you can avoid dealing with a bank or mortgage company.
Seller financing is a good option for buyers who want to buy a home in Panama, but need to sell their current home to pay for it.
You will need to negotiate the financing terms directly with a property owner for all or part of the purchase price.
You can also get a loan directly with the developer of a property rather than the bank or mortgage company.
This is very common with pre-construction and during-construction developments.
It usually consists of small down payments, small monthly payments, and then a balloon payment once your property is complete.
This is when you apply for a mortgage loan from a local bank.
Two banks, of many, that offer mortgages in Panama are MultiBank and Global Bank.
Most banks in Panama will give you a mortgage on a property in Panama.
The banks are mostly interested in your ability to pay back the loan given your assets and income.
Your credit record is of secondary importance to getting a mortgage in Panama.
Click here to read my post on how to get a mortgage loan in Panama
In Central America there are international banks that will provide mortgage financing in 2 or more central american countries.
Toward the bottom of this banks of Panama link, the international banks of Panama are listed.
If you are planning on investing in Panama and another Central American country, you may want to develop a relationship with one of those types of banks.
International banks such as Lloyds TSB International will often finance overseas properties in a range of countries. These larger banks will sometimes finance up to 70% of the value of the property.
Sometimes when you cannot get financing for a specific type of property from one sector of the banking community, another will find it more attractive.
When you have an investor provide the capital, but who is not involved in the day to day decision making of the investment property.
This works well when you have time and know-how, but no money. And you know someone who has money, wants a good investment, but has no time.
In a nutshell, you provide that on-the-ground labor of finding the property and making it look good for resale. Your silent partner provides the money.
This arrangement is unique to each partnership. You will have to hammer out the details, it might be investment specific, or you might have an open line of funds to access.
If you make your first investment a cash-flow property, you can use the proceeds to buy or finance future properties.
The CAP rate can be excellent. We know some people in Puerto Armuelles who paid rent of $500/month to an expat who had just bought the rental house for $50,000. You do the math.
Even without looking at the CAP rate, the investor is making 12% a year plus appreciation. Right now in Puerto Armuelles, property is appreciating at 10% or more a year.
Crowdfunding is increasingly popular for a wide range of projects, including real estate.
Typically crowdfunding is done via the Internet. It allows you to get a large number of people to pool their funds together.
There are more and more online resources where you can invest a little bit of money, with other investors, to buy real estate.
Here is a link citing the Top 10 sites for real estate crowdfunding.
Taylor White's post on the "17 Ways To Finance International Real Estate" both inspired and greatly contributed this post. Thank you Taylor.
This impacts Panama property within 10K of both Costa Rica and Columbia.
(FYI - 10 kilometers is the same as 6.2 miles.)
The same restriction used to apply to all island property, but in 2006 that restriction was eliminated. So unless the island is less than 10K from Costa Rica or Columbia, a foreigner can buy land on an island, or the whole island, in Panama.
It seems like a very clear cut rule, but it isn't.
The rule says that a foreigner cannot own property within 10 kilometers of a border Panama shares with another country. The 10 kilometers is measured from a proposed property to the closest point on the border from that property.
However, many foreigners have purchased land within 10 kilometers of Panama's borders, especially the Costa Rica border.
Technically, the buyer of rights of possession (ROP) property is not the true property owner. The true owner is the Panama government because the government holds the title. (This also means that ROP land is also exempt from property taxes. Find out more about Panama property taxes and exemptions here. ) Therefore, it is perfectly legal for foreigners to buy ROP property in Panama less than 10 kilometers from Costa Rica or Columbia.
Such corporations designed to keep the owners of the property hidden. A Panamanian, often a lawyer, is the face of the corporation. The true owner(s) are kept anonymous.
Technically, even corporations cannot buy property inside the 10 kilometer line if a foreigner is part of the corporation, or if foreign money is used to buy the property. But given the nature of anonymous corporations in Panama, it is very hard to verify whether a foreigner is part of it or not.
At one time, it seemed that the existence of anonymous corporations in Panama were numbered. But each time the proposal was raised, it was also ultimately squashed. There are too many people in power who benefit from the opaque nature of these corporations. These days, it seems unlikely that anonymous corporations will be banned in the foreseeable future.
(Read how Panama proposed banning corporate anonymity and then a subsequent post on Panama suspends the proposal to ban anonymous corporations.
While we are on the subject, you may want to read about the dangers of buying property from an anonymous corporation in Panama.)
For instance, we own titled land, in our own names, in Panama within 10 kilometers of Costa Rica. Our property is recorded in the public registry of property. No one batted an eye. We know many people who have done the same. It is technically risky. However, it seems extremely unlikely that the government would claim the property from us.
However, everyone's risk tolerance is different. To be as safe as possible, you should buy at least 10 kilometers away from the border.
The 10 kilometer property rule is the only restriction on foreign ownership of property in Panama.
Panamanian law is very friendly to foreign investment in real estate.
If you want to buy land outside the 10K line in Puerto Armuelles, you need to buy land north of the San Bartolo bridge. This bridge is on the main road into Puerto Armuelles and goes over the San Barolo river.
This means Puerto Armuelles is situated such that it has some of it lands are more than 10K from the border with Costa Rica, and some are less than 10 kilometers from the border.
There is a surveyor's map below which gives distance from the border of various points in Puerto Armuelles. A good rule of thumb, as I say above, is whether a point is north of the San Bartolo bridge or not. If a property is north of the San Bartolo bridge than you are almost always more than 10 kilometers from the border of Costa Rica, per the 10k rule.
For instance, these Puerto Armuelles neighborhoods are more than 10 kilometers from the border with Costa Rica. There are more neighborhood outside the 10k line, but the ones below are the primary ones.
Here is the map of the Puerto Armuelles area with distances from border as done by a certified surveyor.
