Cashing In On a Second Home in Central America: How to Buy, Rent and Profit in the World's Bargain Zone. Tom Hammond Kelly

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      Taxpayers can choose how the capital gains resulting from the sale of Panamanian real estate are taxed. There are two options, and both can be confusing:

      1.5 percent of the sum of the following:

      a.The property’s cadastral value (public-record value, similar to a county assessment)

      b.Improvement costs

      c.10 percent of the property’s cadastral value for each year of owning the property

      This method of taxation consolidates the transfer tax and the capital gains tax, meaning the taxpayer choosing this option is not liable for the 2 percent transfer tax. Taxpayers choosing this option also are not subject to any more tax on capital gains arising from the sale.

      2.2 percent of the higher value between:

      d.The sales price

      e.The sum of the property’s cadastral value at the time of acquisition, improvement costs effected at the time of ownership and 5 percent of the cadastral value of the property (including the improvement costs) for each year the property was held

      Taxpayers choosing the second option are subject to a further tax on the capital gain. The taxable gain is the selling or transfer price less the following: the acquisition cost or the cadastral value, transfer costs and 10 percent of the acquisition cost for each year the property was held. The gain is then divided by the number of years the property was owned by the seller. The resulting amount is then taxed at the standard income tax rates.

      In the second option, the 2 percent initial tax on the selling price can be credited as real estate transfer tax. In computing the capital gains tax liability for the same property, this tax can therefore be deducted from the selling price as a cost of transferring ownership.

Reasons Behind the Purchase Ron Acker is a fairly typical second-home buyer in Panama. He is a baby boomer within 10 years of retirement and is thinking of where he would like to spend his leisure time while diversifying real estate investments. Acker is also an Orlando, Florida-based Realtor who bought property in Panama primarily as an investment and secondly as a possible place to retire. This is a combination not typically found in other Central American markets. While someone moving to Honduras or Nicaragua probably is focused on an alternative lifestyle, Acker bought in Panama with an eye toward gaining equity via property appreciation while not discounting the possibility of living there. As an investor, salesperson and baby boomer, Acker provided helpful information about buying property in Panama.

Q: What made you decide to buy property in Panama? A: I have traveled to many areas on behalf of international real estate, including eastern and western Europe and some Latin American countries. What I saw in Panama was amazing. There aren’t many places within a few hours’ flight of south Florida where construction is priced as favorably as Panama. I was impressed at the quality of construction, too, and the first-world feel to this hot market.

Q: Are there any risks involved in buying in Panama? A: Risks are inherent in any international real estate investment, but I bought in Panama for a variety of reasons. Firstly, I like what I see there economically. A referendum on expanding the Canal is expected to pass, which will create jobs and economic activity. Americans are moving there in large numbers and the lifestyle appeals to them. I can make it from my home (in Orlando) by leaving in the morning and arriving to Panama at lunchtime. I will either keep my unit in Panama or resell. In any case, I’ll collect rental income while it appreciates in value. Several Realtors also bought real estate while I attended a conference there. We know good value and appreciation when we see it. Panama’s risks are low (at this point in time).

Q: Where did you buy and why? A: I bought a condominium in a new construction building called Green Bay Plaza, which is in a neighborhood called Costa del Este. Costa del Este lies halfway between the international airport and downtown Panama City on a key artery highway called the Corridor. The look and feel reminded me of Florida. Efficient zoning creates good aesthetics. It is close to employment centers, which translates into rental income. And it would also make a great second home. From my unit, I get an excellent skyline and ocean view. Low monthly maintenance fees include parking, pool and security. Prices were unbelievable and you can get in on the ground floor (literally) with new construction developments there.

Q: How is the buying process different than in the United States? A: I’ve learned that things operate on a different time frame. The developer reserved my unit with a minimal down payment—but completing the contract took months, which is different than in the United States. There is negotiation in everything but the buying process and contract process are remarkably similar to the United States. Documents are fully translated into English.

Q: There seems to be a lot of new construction developments in Panama City. Is it recommended to buy new construction or resales? A: New construction is where the action is right now, and those who buy early have the potential of good appreciation. New construction projects have a 20-year exemption on taxes. The building designs and construction quality improve dramatically year after year. But resales are also a viable option in Panama. What is challenging is the lack of a multiple listing system (MLS) like one would find in the United States; this makes it hard to determine the true market value. But this will change in the future. As is the case with any property purchase in Latin America, you need to make sure you are dealing with a reputable agent and/or developer with solid credentials and a good track record.

Q: Would you retire in Panama? A: I would absolutely consider retiring there. The low cost of living, lifestyle and proximity to the United States are primary reasons. Not only is real estate well priced, but you can go out to dinner at high-quality restaurants at a fraction of the cost. Everything from health care to entertainment is cheaper. But the lifestyle is also very comfortable, especially for Americans. The close proximity to the United States means that I could live there for a few months of the year—possibly during hurricane season in the U.S.— and rent it out at other times and/or lend it to family and friends. What I really like about buying (in Panama) is that I’ve got a variety of options. СКАЧАТЬ В начало < 5 6 7 8 9 10 11 12 > В конец