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27/04/2024
Alternative Dispute Resolution Methods in Panama
28/05/2024Regstering improvements on property in Panama is easier than you think.
By: Carlos Coto – Associate
Many Panamanian property owners wonder: What are improvements, and how do I register them?
An improvement is any modification, construction, or addition that increases your property’s value. This can include:
- Walls and fences
- Floors and pools
- Parking areas and landscaping
- Renovations and extensions
Why Register Improvements?
The value of a property is determined by the sum of the land value and the value of any improvements. Additionally, Panamanian law recognizes the right of “accession,” which states that anything built, constructed, planted, or sown on a property becomes the property of the landowner, thereby increasing its value. Therefore, it is important to register these improvements in the Public Registry of Panama via a public deed that fulfills the necessary requirements.
What Information is Required for a Public Deed of Improvement Declaration?
To register improvements, you’ll need a public deed that includes the following details:
- General Deed Norms: The document must comply with standard public deed requirements.
- Property Owner Information: Your personal details, including full name and identification number.
- Clear Property Identification: This includes the folio number, location code, and any other relevant registration data.
- Detailed Improvement Description: A clear description of the improvements made, including materials used (e.g., concrete walls, ceramic floors, fences parking spaces, pools, among others).
- Adjoining Properties and Improvement Measurements: Specify the properties bordering yours and the precise surface area and dimensions (in meters and decimeters) of the improvements.
- Property and Improvement Valuation: Provide the separate values of the land and the improvements to determine the property’s total value.
What Happens After Registering Improvements?
Once the improvements are registered, a copy of the public deed must be submitted to the National Land Authority (ANATI), who will update the property’s value. The new value of the property will determine the property tax to be paid annually, in accordance with the combined progressive rate included in the Fiscal Code.
Get Help with Property Improvement Registration
The legal team at ICAZA, GONZALEZ-RUIZ & ALEMAN can assist you with registering improvements on your Panamanian property and advise you on your property tax obligations. Contact us at bd@icazalaw.com to schedule a consultation.
