Updated: August 31, 2026
Panama's new-housing market is entering a new legislative chapter. Bill 661, introduced by the Ministry of Economy and Finance (MEF), seeks to modify the treatment of the Real Estate Transfer Tax (ITBI) applicable to certain new homes.
The initiative was approved in third debate by the National Assembly on August 27, 2026, with 53 votes in favor, 5 against, and 1 abstention. As of the date of this publication, the bill is still pending the decision of the Executive Branch and its eventual enactment, so its provisions should not yet be considered an active benefit.
The Real Estate Transfer Tax, known as ITBI, is a tax associated with the transfer of real estate in Panama.
Bill 661 proposes to modify the treatment of this tax specifically for certain new-home transactions.
The proposal was introduced by the Minister of Economy and Finance, Felipe Chapman, and is part of a National Government initiative aimed at facilitating access to housing and stimulating construction-sector activity.
The MEF itself noted, when reporting on the bill's approval, that the initiative seeks to facilitate access to new housing and establishes an exemption from paying the 2% levy for homes of up to B/.120,000.
The core of the proposal is to establish an exemption on the first B/.120,000 of the value of certain new homes.
According to the official information published by the MEF on August 27, 2026, the bill establishes:
"the exemption from paying the 2% of this levy on the acquisition of homes with a cost of up to 120 thousand balboas."
In addition, for higher-value homes, the proposal maintains the exemption on the first B/.120,000 and sets rates on the remaining amount.
| Home value | Proposed treatment |
|---|---|
| Up to B/.120,000 | 0% on the first B/.120,000 |
| B/.120,001 – B/.130,000 | 0.50% on the excess |
| B/.130,001 – B/.150,000 | 1.00% on the excess |
| B/.150,001 – B/.170,000 | 1.40% on the excess |
| B/.170,001 – B/.190,000 | 1.60% on the excess |
| B/.190,001 – B/.200,000 | 1.80% on the excess |
These are the rates and ranges that the MEF published when explaining Bill 661.
If the bill becomes law under the approved terms, a new home valued at up to B/.120,000 would have an exemption on that amount.
It is important, however, to distinguish between a proposal approved by the National Assembly and a law in force.
As of August 31, 2026, Bill 661 has passed the three legislative debates, but the corresponding process must still be completed for it to become an enacted law and take effect.
For this reason, someone currently negotiating the purchase of a new home should not automatically assume that the new ITBI treatment can already be applied.
The proposal contemplates a different treatment for homes valued above B/.120,000.
The first B/.120,000 would fall within the proposed exemption, and the tax would be calculated on the excess, using the rate corresponding to the property's value range.
For example, for a home of B/.150,000, the amount exceeding B/.120,000 would be B/.30,000.
The rate indicated for that range is 1.00% on the excess, according to the structure published by the MEF.
This means it is not simply a matter of applying a given rate to the full price of the home: the proposed design establishes an exemption on the first B/.120,000 and a rate on the excess.
The bill was introduced by the Minister of Economy and Finance, Felipe Chapman.
The Cabinet Council had originally approved the proposal on July 29, 2026. On that occasion, the Presidency of the Republic explained that the initiative sought to have the first sale transaction of certain new homes exempt from the ITBI on the first B/.120,000.
The Minister of Economy and Finance explained at the time:
"This is focused, primarily, on making it easier for lower-income Panamanian families to fulfill their dream of acquiring a home."
The Presidency also reported in that same statement that the bill was related to the Government's goal of energizing the construction industry.
The Government has linked the initiative to two main objectives: facilitating access to housing and boosting construction activity.
The MEF noted that the bill seeks to make it easier for Panamanian families to acquire a home and, at the same time, to boost an industry that carries significant weight in the economy and in job creation.
The Presidency of the Republic also presented the initiative as part of a strategy to energize construction.
The Minister for Canal Affairs and Secretary of Goals, José Ramón Icaza, explained in July that the measure was part of a Government strategy to generate employment through construction activity.
This is where special care is warranted.
Bill 661 targets certain new homes, and it does not mean that any real estate transfer of up to B/.120,000 is automatically exempt.
The proposal refers to the first sale transaction of new homes under the conditions established in the bill.
Therefore, a used home, a second transfer, or a transaction that does not meet the established conditions should not be automatically interpreted as benefiting from the new regime.
The proposal also establishes a condition related to when the first sale of the home is formalized.
In the proposal originally introduced by the Executive, it was established that the first sale of the new homes had to be formalized within a specific period counted from the issuance of the occupancy permit.
This point is especially relevant for buyers and developers, because the benefit does not depend solely on a property's sale price.
It also matters that the transaction meets the conditions established in the norm ultimately enacted.
For that reason, before making a decision based on the new tax treatment, it is advisable to verify the final text of the law and its effective date.
The proposal introduced by the Executive established that the tax would be borne by the seller.
The Presidency reported in July that:
"The tax will be paid by the seller."
It also indicated that any agreement whereby the seller directly or indirectly transferred the obligation to pay this tax to the buyer would be null.
This point should be checked against the final text that is enacted, since the bill underwent modifications during its legislative discussion.
The process has gone through several stages during 2026.
The Cabinet Council approved the bill introduced by the Ministry of Economy and Finance and authorized its submission to the National Assembly.
During August, the bill was discussed in the National Assembly. The initiative was also analyzed within the context of the tax measures proposed by the Executive.
The MEF reported that the Plenary of the National Assembly approved Bill 661 in third debate.
The recorded vote was:
This is the most important point for understanding the current status of the measure.
It should not yet be treated as an exemption in force.
As of August 31, 2026, the correct way to refer to it is as Bill 661 approved in third debate, and not as a new exemption already in force.
The bill must complete the corresponding process before the Executive Branch and, subsequently, be enacted in order to take effect. The information published after the third-debate approval indicates that the initiative was left awaiting the Executive's decision.
For this reason, if you are currently buying or selling a property, it is advisable to check the legal status of the transaction and not assume that the new tax treatment can already be applied.
Although it is still necessary to wait for the norm to take effect, the potential scope of the measure goes beyond the individual buyer.
The Government has presented the bill as a tool to stimulate the purchase of new homes and energize construction.
For the real estate market, this could generate interest especially in properties within the ranges contemplated by the bill.
It may also influence the way buyers, developers, banks, and other market participants assess the total cost of a new-home transaction.
However, any real impact on prices, inventory, or sales pace will have to be assessed once the norm is in force and there is sufficient data to measure its effects.
If you are considering buying a new home in Panama, Bill 661 may be an important measure to follow, but it is advisable to review several elements before making a decision:
Bill 661 represents one of the most relevant recent changes related to the purchase of new housing in Panama.
Its approval in third debate marks an important advance in the legislative process, but the next step will be decisive for buyers and developers: learning the decision of the Executive Branch and, if sanctioned, the final text published in the Official Gazette and its effective date.
While that process continues, the recommendation for those evaluating a purchase is not to make decisions based solely on the possible exemption, and to verify the legal and tax conditions applicable to each transaction.
This article was updated on August 31, 2026.
InmoPanama will follow up on the decision of the Executive Branch and will update this publication when official information exists on the sanction, enactment, or entry into force of Bill 661.
Official sources:
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