Remote Rental Management in Panama: 10% Tax Today, 15% Risk Ahead

Renting out an apartment in Panama City while living in Dubai, London or Singapore is logistically simple but legally demanding. A non-resident owner does not need to set foot in Panama, yet must still pay Panamese tax on Panamese income, hold a local bank account or work through a licensed manager who does, and operate through an apostilled power of attorney.

The variable that matters most in 2026 is tax. Short-term rental income is currently taxed at 10%¹. A bill before the National Assembly would raise that to 15% for residential properties, regardless of whether the booking runs through a platform or directly with the owner³. Licensed hotels would stay at 10%⁴.

The second variable is the building itself. Under draft bill 301, whether short-term rental is allowed in a given property is decided by the homeowners' association (PH) by simple majority, 50% plus one². A remote owner who skips PH meetings risks finding out about a ban after the fact.

Quick Answer

• Physical presence in Panama is not required. The purchase and ongoing management can run entirely through an apostilled power of attorney (poder) translated into Spanish.
• Today's tourist-rental tax rate is 10%¹; bill 713 proposes 15% for residential units, including direct bookings made without a platform³.
• A separate initiative to raise ITBMS to 15% (bill 31-26) was approved by the Cabinet on 25 August and sent to the Assembly on 14 September; it still needs three debates⁴.
• Bill 301 passed its first reading in January 2026, defines tourist rental as a stay of 1 to 90 days that does not create residency, and keeps the rate at 10%¹.
• Listing a property will require a digital ATP registration number, free of charge and without an on-site inspection under the current draft².
• A related proposal would apply a 7% ITBMS rate to foreign digital platforms' service fees, to level the field with licensed hotels⁵.

Scenarios and Options

Scenario 1. Long-term lease through a manager. A 12-month contract with an expat or local tenant. Income is stable, the tourist tax does not apply, and owner involvement is minimal. Downside: rental rates are lower than short-stay, and evicting a non-paying tenant runs through an administrative process that can take months.

Scenario 2. Short-term rental via an operator. Higher gross revenue in Punta Pacifica, Avenida Balboa and Casco Viejo, but you fall under the full regulatory package: ATP registration, a 10% tax with a 15% risk hanging over it³, and PH approval². Operator commissions in the market run 15 to 25% of revenue.

Scenario 3. Hybrid model. Short-stay during high season (December to April), long-term contract the rest of the year. Requires a reliable on-the-ground operator and clean bookkeeping, since a DGI audit will need to see exactly which rate applied to each month.

Scenario 4. Ownership through a Panamanian corporation. A legal entity simplifies changing beneficiaries and inheritance, but adds an annual government fee (tasa unica) and a mandatory resident agent. For a single unit, the benefit often does not cover the added cost.

Comparison Table

Main Risks and Mistakes

Power of attorney without an apostille. A document signed before a notary outside Panama will not be accepted without an apostille and a sworn Spanish translation. Arrange the poder early, listing specific powers: lease, sign, collect payments, pay taxes.

Modeling returns on today's 10% rate only. If bill 713 or 31-26 clears three debates, the 5-percentage-point swing will eat a meaningful share of your margin³⁴. Run the numbers under both scenarios before buying.

Ignoring the homeowners' association. Bill 301 hands the decision to the building². Before buying for short-term rental, request PH meeting minutes and the current reglamento de copropiedad.

Betting on 'direct bookings instead of a platform' as a workaround. The bill explicitly covers bookings made directly with the owner³. That loophole does not exist.

No local bank account. Without an account at a Panamanian bank or a licensed manager who has one, cash gets stuck and paying tax becomes a headache. Opening an account as a non-resident takes weeks and requires proof of the funds' origin.

Unfiled tax returns. Income from Panamanian real estate is Panamanian-source income, and the territorial tax principle does not exempt it. As of 2026, confirm current rates and filing deadlines with a local tax lawyer before closing.

FAQ

Do I need to travel to Panama to rent out an apartment?

No. An apostilled power of attorney for a manager or lawyer is enough. But the signatory must be real and accountable: granting power of attorney to a 'friendly agent' without a paid management contract is a common cause of losses.

What tax does a non-resident pay on rental income in Panama?

Tourist lodging is currently taxed at 10%¹. Long-term rental is subject to income tax on Panamanian-source earnings. Confirm rates and deductions with a Panamanian tax advisor before signing.

Is Airbnb actually getting banned in Panama?

No. This is regulation, not a ban. Bill 301 defines tourist rental as a stay of 1 to 90 days and introduces digital registration¹, while leaving the decision for each building to its owners' association².

When will the rate rise to 15%?

No date is set. Bill 31-26 was sent to the Assembly on 14 September and must pass three debates⁴. Until a vote, the 10% rate applies.

How much does a management company charge?

Market estimates run 15 to 25% of revenue for short-term rental and roughly 8 to 12% for long-term leases. Check the contract to see who pays for cleaning, utilities, and PH dues.

Can I rent an apartment in Casco Viejo short-term?

It depends on the building and its bylaws. The historic district carries extra heritage-protection restrictions, so check a property's status before buying, not after.

What is the ATP registration number?

It is an identifier in the tourist lodging registry. Under the current draft it is digital, free, and issued without an on-site inspection².

Is a direct booking without a platform still taxed?

Under bill 713, yes: the 15% rate would apply regardless of the booking channel³.

Source: Infobae

The practical takeaway: before buying for rental, request the PH meeting minutes and the building's reglamento, and run your financial model at the 15% rate from day one. A property that stays profitable under that scenario will survive whatever the Assembly decides.

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Sources (5)

This material was prepared with the help of artificial intelligence and checked by a person. Editorial responsibility: Housebook Investment LLC.