International Real Estate – Investing in Panama
Updated: Aug 18
What is the difference between a titled property and Rights of Possession (ROP)?
Titled Properties are the safest type of real estate investment in Panama. The Constitution of Panama guarantees the Law of private properties. Titled properties duly registered and recorded in the Public Registry of Panama (“Registro Público”) verify the “property title” of the property owner. This verifiable, guaranteed title allows, among other things, banks to issue mortgage loans for titled properties by establishing liens in regard of rights to properties as liability insurance.
In the Public Registry (Land Registry), the property title of a real estate can be verified any time; simultaneous, mortgage debts, land encumbrances, or any other restrictions are also visible. The property plans are kept in the real estate cadastre (“Catastro”) with its location, exact geographical coordinates and the dimensions of the property.
Rights of Possession (ROP) - “Derechos Posesorios” are owned by the Government and “occupied” by a natural person. The right to rule as an owner of the property is issued by a governmental authority such as the municipal administration. There are no property taxes because the beneficiary does not legally own the property. However, any building structure constructed on the property may be subject to local and/or national taxes if it is duly registered. A right of possession may be converted into a property title by purchasing the property from the government. For this purpose, certain legal requirements must be fulfilled. Restrictions on the titling of rights of possession apply in certain areas such as islands, coastal regions, beaches, border areas, national parks and nature reserves, etc.
Based on our extensive professional experience and legal knowledge, we strongly recommend our clients to invest in titled real estate in Panama.