How to sell your property in Panama without losing your residence - Guide for Italians

Yes, Italian citizens residing in Panama can sell their property without automatically losing their immigration status. However, this possibility depends on several factors, especially the type of residence permit you have and whether that home was originally linked to the process.

Panama has a current bilateral agreement with Italy that allows Italian citizens to access special migratory benefits. Many Italians reside in Panama under the category of permanent resident by agreement Italy-Panama, which does not require the mandatory purchase of a property to obtain residence. In these cases, the sale of the property has no direct impact on legal status.

However, there are particular situations in which the purchase of a home was part of the migration process. For example:

• If you originally entered under an investor visa tied to real estate
• If your current residence depends on a minimum real estate investment requirement linked to the permit

In those cases, selling the property may invalidate your immigration status or lead to a review of the status by the National Migration Service. In addition, if you are in the process of renovating or transforming your residence, having a property registered in your name can facilitate certain procedures.

So, what can you do if you're considering selling your house or apartment in Panama? Here are some useful considerations:

Evaluate the type of residence you have

Review your current immigration status. Is it permanent? Was it granted under the Panama-Italy agreement or under another category such as investor? This will determine if you need to keep the property or if you can sell without legal repercussions.

Consult with a lawyer before formalizing the sale

A prior analysis of your immigration file will help avoid errors that could result in loss of residence. Not all cases are the same and legal counsel can identify potential hidden risks.

Consider the date of your next renewal

If you have a temporary residence, selling your property just before it expires can complicate the renovation. If so, you may want to wait or restructure your investment before continuing with the sale.

In short: yes, you can sell your property in Panama as an Italian citizen and continue to reside legally in the country. But it is essential to do so with knowledge of the applicable immigration regime, your legal background and your permanence strategy to avoid unnecessary complications.

Panama maintains a strong historical relationship with Italy, materialized in the Friendship, Trade and Navigation Agreement signed in 1966. Thanks to this agreement, Italian citizens have preferential access to immigration procedures that allow them to establish themselves in a legal, stable and more agile way than other foreigners.

One of the main benefits is the permanent residence permit under the program Panama-Italy Agreement, which has fewer economic requirements than other migratory categories.

Basic requirements for applying for residency as an Italian citizen

To apply this way, the interested party must submit a series of documents to the National Migration Service. Among the most relevant requirements are:

• Current passport (minimum six months of remaining validity)
• Criminal Record Certificate from the Country of Origin
• Proof of address in Panama (rental contract or property registered in the Public Registry)
• Proof of economic solvency (for example, a bank account in Panama with a stipulated minimum balance)
• Legal representative in Panama to process the application

It is not mandatory to purchase a home to apply under this agreement, but some Italians choose to buy real estate as financial support or to facilitate initial residence procedures.

Permanent vs. temporary residence

The Panama-Italy agreement allows you to apply directly for permanent residence, which eliminates the intermediate stage of temporary permits. This means that, once approved, the Italian resident does not need to renew every year, but only update their immigration card every 10 years.

In cases where the Italian citizen has entered the country using another category - as an investor, foreign professional or a visa with their own economic solvency - the requirements will be different, including longer periods of stay before obtaining permanent residence.

What happens if I sell my property?

As explained in the previous section, if your residence does not depend on the ownership of real estate, selling your home does not directly affect your status. However, it is prudent to:

• Update your legal address in Migration if your previous residence was the property sold
• Keep evidence of financial solvency by other means (bank accounts, passive income, etc.)
• Keep your migration data up to date to avoid inconsistencies during inspections or renovations

With a view to 2025, some analyses point to a possible revision of the system of economic migratory categories. While these changes are still subject to discussion, Italian citizens are encouraged to review their immigration status before making important property decisions such as selling a property.

Being a Panamanian resident as an Italian offers many tax, banking and mobility advantages. Therefore, keeping it after a property sale is possible — as long as you act with planning, advice and knowledge of the specific requirements that Migration may require.

The sale of a housing in Panama on the part of a foreign citizen — including Italian citizens with residence — implies certain tax obligations that must be considered from the start. The fiscal outlook for the year 2025 anticipates regulatory adjustments that could impact both transaction costs and immigration status if proper planning is not carried out.

What taxes do I have to pay when selling my property in Panama?

When selling a property in Panama, the seller (whether resident or foreigner) must assume mainly two types of taxes:

• Capital Gain Tax: This is 10% of the net profit obtained between the declared purchase price and the sale price.
• Real estate transfer tax: It corresponds to 2% of the highest value between the sale price or the registered cadastral value.

Additionally, in practice, 3% of the total sales amount is usually withheld as an advance on capital gain tax. If this amount exceeds the actual tax applied, the seller can request a subsequent refund from the Directorate General of Revenue (DGI).

Do I have to pay the same if I am an Italian citizen with permanent residence?

In fiscal terms, Italian citizens That they have residence in Panama are subject to the same rules as any other landlord. However, being duly registered as a resident can facilitate certain procedures, including the validation of tax residency to avoid double taxation. Panama and Italy have a treaty to avoid such double taxation, which can be used to optimize the tax burden in both countries.

How does the form of ownership of the property influence?

The way in which the property is structured—whether in a personal capacity, in the name of a foundation or public limited company—also has tax implications. For example, selling a property registered in the name of a company may require the transfer of shares, which creates additional implications in terms of Real Estate Taxes and must be properly documented.

Key Tips for 2025

For Italians who plan to sell in 2025, it is advisable to:

• Update the cadastral value before the sale to avoid unnecessary tax differences.
• Check if your country of origin will consider this gain as taxable under its regulations.
• Prepare in advance a Panamanian tax certificate that demonstrates the payment of all taxes.

If the tax process is not properly managed, immigration authorities could question your financial status and, in extreme cases, your legal permanence, especially if you Residence permit depends on the economic or patrimonial balance in Panama.

Therefore, proper tax planning is an integral part of a Exit Strategy responsible and legal when selling property in Panama as a foreigner.

Selling a property may seem like a simple legal or financial process, but for those who have a Residence Permit in Panama, this operation has significant migratory implications. In particular, Italian citizens with permanent or temporary residence should be aware of what actions may jeopardize their legal status after selling their home.

1. Not informing Migration about the change of assets

One of the most common mistakes is not updating the information in the immigration file after a major sale. When the property sold forms part of the applicant's economic justification —for example, in permits such as that of Qualified Resident for Real Estate Investment— not informing the National Directorate of Migration about the sale may be interpreted as a breach of the permit conditions.

2. Sell before meeting the minimum amount of time required

Several residence permits require the applicant to keep the investment (for example, real estate) for a certain period, usually 5 years. Selling before that time can be considered as a tacit waiver of the initial commitment, leading to the loss of residence.

3. Not having a valid economic alternative

For permits based on economic sustenance, such as deposited funds, investments or real property, the Directorate of Migration expects that there will be an equivalent source when that investment ends. In other words, if the house that validated your permit is sold, you should have another property, an active investment or a sufficient bank account to support your economic continuity in the country.

4. Wrong assumptions about “automatic” residence

Many Europeans with Panamanian residence think that having spent some time in the country, their status no longer depends on their initial investment. This perception can be risky. Although some permits result in permanent residence, others depend directly on the validity of the economic criteria that originated them. This is why it is essential to review the specific type of residence that the Italian citizen maintains before making decisions.

5. Forget to renew on time after the sale

It is also common that after selling a property there is a disconnect with immigration procedures, since the owner “disappears” as a taxpayer or active resident. If documents such as a resident's card expire and there is no renewal backed by new economic means, immigration validity is automatically lost.

To avoid these errors, it is vital to connect estate planning with the immigration aspect. There are legal ways to structure the sale without giving up status in Panama. In the next section, we'll explore what legal strategies are most recommended by experts to preserve your residence in Panama even after you sell your property.

Once you decide to sell your property in Panama, the next logical step—if you want to remain in the country as a resident—is to apply a legal strategy that keeps your immigration status intact. This is especially important for Italian citizens with residence based on specific treaties, such as the Permanent Resident Permit under the Friendly Countries Agreement or the European Union Citizen's Permit.

It is not enough to execute the sale; it is essential to foresee how such a transaction may impact your immigration status, since in many cases, the property represents the economic or entrenched link that justified obtaining a residence permit.

Retain Residency Demonstrating an Economic Link

One of the surest ways to not lose your legal status after the sale is to establish a new economic link in Panama. Some recommended strategies in 2025 include:

• Create an active Panamanian company for commercial or investment purposes.
• Invest in a new property, even if it is of lower value, as long as the link lasts.
• Be part of a local company as a partner or shareholder.

Remember that if your residence was granted based on a real estate investment, selling without replacing that link can trigger an immigration review and, in extreme cases, the cancellation of the permit.

Legally restructure your investment

Another viable option is Transfer ownership to a company of which you continue to be the effective owner. In this way, the migratory institution may consider that you have an operational investment in Panama, even if you no longer appear as the direct owner of the property.

This is useful if you plan to make a partial sale, rent the property, or transform the real estate into an income-generating company. In recent years, this type of structure has been used by European citizens in asset restructuring.

Apply for a different immigration category

If the residence permit was originally granted under a very specific condition (such as “Resident Investor”), you might consider migrating to another, more flexible category. Some options available in Panama include:

• Residency based on professional activities, if you work in a registered Panamanian company.
• Change to a retiree or retiree visa, if your age and financial situation allow it.

This category change should be planned before the sale, as migration may interpret your new status less favorably if you don't anticipate the transition.

Documenting Continuity of Roots

A common mistake is to stop renewing documents or to lose documentary connection with Panama after the sale. To avoid this, be sure to keep:

• Active bank account
• Valid tax address
• Updated immigration status
• Renewal of your card within the legal deadlines

Foreigners who keep evidence of roots tend to have more options to prove that their stay in Panama is still valid, despite the sale of real estate.

Rely on specialized legal advice

The key to all of these strategies is to analyze your individual case. Depending on whether you plan to stay, move within the country or return to Italy, the applicable legal framework may vary. In 2025, stricter immigration checks are expected after the sale of properties, so appropriate legal guidance can save you from penalties or the total loss of resident status.

With a well-thought-out strategy, you can sell your house or apartment in Panama and continue to enjoy the immigration, tax and personal benefits that your residence permit offers.