President Mulino sanctioned Law 546 on August 31, 2026. It's aimed squarely at the middle-income, first-home buyer — and it's a useful signal for anyone tracking where Panama's housing policy is pointed next.
On August 31, 2026, President José Raúl Mulino sanctioned Law 546 of 2026, exempting the purchase of new homes valued up to $120,000 from Panama's Property Transfer Tax (ITBI) — a 2% tax that has historically applied to the full value of a real estate sale. The bill was proposed by the Ministry of Economy and Finance (MEF), approved by the Cabinet Council on July 28, and passed the National Assembly on August 26 with 53 votes in favor. Minister Felipe Chapman framed it plainly: middle-income families shouldn't have to pay an upfront transfer tax just to close on their first home.
Law 546 modifies Article 4 of Law 106 of 1974. The first $120,000 of a new home's value is now 100% exempt from ITBI. For homes priced above that but at or below $200,000, the tax applies only to the portion exceeding $120,000, on a sliding scale:
| Value range (excess over $120,000) | ITBI rate on the excess |
|---|---|
| Up to $120,000.00 | 0.00% (fully exempt) |
| $120,000.01 – $130,000.00 | 0.50% |
| $130,000.01 – $150,000.00 | 1.00% |
| $150,000.01 – $170,000.00 | 1.40% |
| $170,000.01 – $190,000.00 | 1.60% |
| $190,000.01 – $200,000.00 | 1.80% |
Above $200,000, the standard 2% ITBI applies to the full value, unchanged. To qualify, the sale must be formalized within 24 months of the property's occupancy permit being issued — or within 30 months if that permit was issued before the law took effect. Sales formalized before Law 546's entry into force follow the prior tax regime; there are no retroactive refunds.
The law's stated purpose is to help young families and middle-income households afford closing costs on a first new home — a segment largely outside Brax Realty's curated $200,000+ inventory, but a meaningful share of Panama's overall residential market.
Removing or reducing the transfer tax at closing lowers the effective purchase price friction for buyers in this range, which should support absorption for developers with product priced there — a segment that's been a smaller share of Brax's own portfolio but a real driver of national construction volume.
MEF and CAPAC have both framed this explicitly as a demand-side lever to help sustain the construction rebound we cover separately — more transactions closing at the entry-level end of the market supports overall sector activity, employment, and developer confidence to keep building.
A tax exemption capped at $200,000 tells you exactly which buyer the government is trying to reach — and it isn't the one reading a dossier on branded residences.
This sits alongside our breakdown of how founders and pre-construction pricing actually works and our walkthrough of Panama's closing process for buyers at every price point. Tax policy shifts like this one are worth tracking even when they don't move your own numbers directly — they're a signal of where the market's center of gravity is heading.