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Panama Capital Gains Tax Guide 2026

Panama imposes capital gains tax (CGT) at varying rates depending on the asset: 10% on real estate gains, 3% on stock exchange transactions, and 5% on other asset sales. Primary residence is exempt from CGT.

Capital Gains Tax Rates 2026

Panama's territorial system means CGT applies only to gains from the sale of assets located in Panama or from Panama-source transactions. The rates vary by asset type:

  • Real estate: 10% of the capital gain (difference between sale price and acquisition cost, adjusted for improvements). Primary residence is exempt.
  • Stock exchange: 3% of the sale value (withholding on Panama Stock Exchange transactions)
  • Other assets (vehicles, businesses, etc.): 5% of the sale value or gain (varies by asset type)

Primary Residence Exemption

The sale of an individual's primary residence is exempt from CGT in Panama. To qualify, the property must have been the seller's main home for at least 2 years prior to sale. The exemption applies to the first sale only (per property). There is also an exemption for properties sold below PAB 120,000 (approximately USD 120,000).

Calculation Method

For real estate, CGT is calculated on the net gain (sale price minus acquisition cost minus documented improvements). The seller must file a CGT return with the DGI within 30 days of the sale. A 3% withholding is typically applied at the notary stage as an advance payment against the final CGT liability.

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