A new Law that widens the preferential interest range for mortgage loans is published in Panama
September 24, 2019
On September 23, 2019, Law 94 of September 20, 2019 was published in the Official Gazette of Panama, amending Law 3 of 1985, which establishes a preferential interest regime in certain mortgage loans and dictates other provisions.
Among the main modifications that are made with this law we can find the following:
– It includes as “Preferential Mortgage Loans” the purchase or construction of houses that do not exceed the amount of one hundred and eighty thousand dollars (US$180,000.00).
– New preferential sections are established for housing loans, which range from 1.5% to 4% for periods of five to ten years, depending on the value of the property, which may not exceed the amount of one hundred and eighty thousand dollars (US$180,000.00).
– It is established that, in the first sale of new homes, the obligation to pay the real estate transfer tax (2%) will fall on the seller and the transfer of such tax by private agreement to the buyer will be invalid.
It´s excluded from the scope of application of said law the properties with a registered value greater than one hundred and eighty thousand dollars (US$180,000.00), the fractional financing by one or several buyers of the same property that exceed this amount in its entirety and the financing for the purchase of new homes for those who are already beneficiaries of the preferential interest regime.
Likewise, it is established that mortgage loans with preferential interest can only be granted until August 1, 2024.
Additionally, it is established that the first sale operation of a new home will be exempt from the payment of the real estate transfer tax (2%), provided that it is the first sale transaction, which must occur within five years after the issuance of its occupancy permit and which refers to:
– New houses whose construction permit has been issued within the period from July 01, 2016 to July 01, 2019.
– New houses for which the occupancy permit was issued before 1 July 2020.