Who pays what at a Panama closing: what is set by law and what is only custom
Short answer: Panama’s tax authority (DGI) has the seller file the transfer-tax (ITBI, 2%) and capital-gains forms, and a law firm summarising Law 546 of 2026 says the ITBI legally falls on the seller. The buyer’s costs (lawyer, notary, registry, bank) follow custom and negotiation, and the published estimates for them run from 2% to 5% of the price, none from an official source. On a $300,000 purchase that spread is about $9,000 (Brax calculation).
“Who pays the closing costs?” is one of the most common questions from foreign buyers, and the answers online disagree. This note separates what the tax authority and the law fix from what is only custom, shows the range of published estimates, and lists what to ask for in writing. It is general information, not legal or tax advice.
Step 1: what the tax authority says
The DGI’s page on declarations for the sale of a property says that at the moment of sale it is the seller who files Form 106 (property transfer) and Form 107 (capital gain). Its Form 106 page describes the transfer tax as 2% on the land or cadastral value. So the two taxes triggered by the sale are filed by the seller.
Brokers’ guides add the rates: the AvenidaBalboa.com guide (updated July 2026) says the ITBI is 2% of the higher of the sale price and the cadastral value, and that the capital-gains advance is 3%, or 10% of the actual gain. We could not find those capital-gains rates stated on the DGI pages we could read, so treat them as reported and confirm them with the DGI or a lawyer.
Step 2: the cost table
The table separates what the sources tie to the seller from what is custom on the buyer’s side. It is a map of who is named in which source, not a quote.
| Cost | Who the sources say bears it | How solid the source is |
|---|---|---|
| Transfer tax, ITBI (2%) | Seller | Tax authority (DGI) and a law firm (Dentons) |
| Capital-gains advance (3%, or 10% of the actual gain) | Seller | DGI confirms the seller files Form 107; the rates come from a broker guide, so confirm them |
| Lawyer, notary, registry, condo certificates | Buyer, by custom; negotiable | No official figure found; estimates only |
| Bank costs (appraisal, mortgage fees) | Buyer, if financing | Set by each bank; ask for the schedule |
Step 3: new homes and Law 546
The Ministry of Economy and Finance reports that Law 546 of 31 August 2026 exempts the first sale of new homes from the ITBI up to $120,000, with a sliding rate on the excess up to $200,000. A Dentons note adds that the ITBI legally corresponds to the seller and that, as it summarises the law, any clause that makes the buyer pay, reimburse or assume it is null and void. Above $200,000 the standard 2% applies as before.
That matters because many buyers of new units assume the tax is passed on to them. We have not read the Gaceta text, so we do not know how widely that clause applies beyond the exempt first sales. Ask your lawyer whether your purchase contract says anything about the ITBI, and whether the price already includes it.
Step 4: what the buyer’s side costs
Estimates vary. Our own closing guide says buyers should budget 3% to 5% of the price. The AvenidaBalboa.com guide says about 2% to 4%. A lakilé buying guide we read in September put it at roughly 2.5% to 3.5%. None of them is an official figure, and they do not list the same items. On a $300,000 purchase, 2% is $6,000 and 5% is $15,000: a gap of about $9,000 (Brax calculation).
We could not find a current official fee schedule for registry or notary services (the registry tariff we found is from 2013, so we do not quote it). The practical answer is a written, itemised quote. We will align our own closing guide with this range. A disclosure: Brax is paid a commission by developers on new-build units; the ITBI and any price effects of Law 546 are worth comparing between a developer’s price and a resale.
Step 5: what to ask for in writing
From your own independent lawyer, before you pay a reservation: (1) an itemised estimate of legal fee, notary, registry, condo-association (PH) certificates and any bank costs; (2) who pays the ITBI and the capital-gains advance, and whether the price includes them; (3) the cadastral value the DGI will use; (4) the date each payment is due. Compare two quotes if you can. Related: how a Panama closing works and the ITBI exemption for new homes.
Related: How a Panama closing works, Law 546 and the ITBI, How to verify a property title.
Questions about a specific unit? Jacky, from the Brax team, answers on WhatsApp: +507 6776-4203. Brax is paid a commission by developers on new-build units.
Common questions
Who pays the transfer tax (ITBI) in Panama?
The DGI has the seller file the transfer form, and a law firm summarising Law 546 of 2026 says the ITBI legally corresponds to the seller. The rate is 2% according to the DGI and the guides we read.
How much should a foreign buyer budget for closing costs in Panama?
Published estimates range from about 2% to 5% of the price, with no official source. On a $300,000 purchase that is roughly $6,000 to $15,000 (Brax calculation). Ask your lawyer for an itemised quote.
Can a developer make the buyer pay the ITBI?
Per a Dentons summary of Law 546, a clause that makes the buyer pay, reimburse or assume the ITBI is null and void when the tax legally corresponds to the seller. We have not read the Gaceta, so confirm how it applies to your contract.
Is there a capital-gains tax when a property is sold in Panama?
The DGI has the seller file Form 107. A broker guide reports a 3% advance, or 10% of the actual gain. Confirm the current rate with the DGI or a lawyer.
Get the Brax Chart of the Week
One chart, one finding, every Thursday. Registry numbers, not brochure numbers.