Are you one of those who bought property under the impression that for 20 years you would pay no property tax? Guess again, because since you bought that expensive apartment and paid that real estate agent thousands of dollars in commissions, a lot of holes have been punched through that exemption.
Up to $30,000 in property value are still exempt, which is enough to buy a small parcel miles away from any supermarket.
This is why the current administration has embarked into an ambitious program to "update" assessed values in high-income neighborhoods - where coincidentally not many voters are residing to alter the political balance - and push them way beyond current resale value in order to levy property tax on them.
The Directorate of State Property Assets of the Ministry of Economy and Finance is publishing Edicts in the PanamaAmerica newspaper which serve taxpayers as notice of the assessment made in accordance with the Executive Decree No. 34 of May 3, 1985, as amended.
The Edicts contain the following information:
- Assessment File Number
- Number of farm
- Name of Owner
- Land value
- Improvement value
- Resolution number
With the publication of each Edict, the institution complies with the notification stage of these resolutions, ie no personal notice is required. This means that an absentee landlord may learn about the assessment when he or she asks for a tax clearance certificate and still has taxes due.
As for the effects of these decisions, it is important to note that in some cases these assessments are increased substantially, the values of the land and improvements of the real property of some taxpayers, implying an increase in the tax rate from the second quarter of 2013 , with the exception of cases where the properties by affected these appraisals are within the five (5) years during which the State can not vary the assessed value, as provided by Article 766-A of the Tax Code. As an example, in the upscale neighborhood of Punta Pacifica:
- Finca PH 335782 2BR 2703, measuring 153.07M2. in PH TOC (Trump Tower) increased from $171,223.56 ($1118.60/m2) to $430,480.95 (2812.31/m2), owned by Newland International Properties Corp.
- Finca PH 362086 U.I.- 801, measuring 203.94M2 in P.H. OCEANAIRE increased from $186,565.37 ($914.80/m2) to $451,087.09 ($2211.86/m2), owned by Corporacion Marbella, S.A.
Fortunately appeals for reconsideration against these resolutions can be brought within 15 working days from the day following the notification, when the term to bring appropriate legal remedies begins and, as applicable, to assert their rights as taxpayers. The appeals must be filed through a lawyer when the property is owned by a corporation or entity.
Owners of properties where Edicts for assessments have not been issued, a tax planner can propose freezing of property tax under certain circumstances allowed by several laws.