There Are Panama Casco Viejo tax incentives
In 1997, UNESCO named Panama’s Casco Viejo historic area, a World Heritage Site. From that moment, the restoration of its streets and colonial buildings -largely neglected since the seventeenth century- kicked off, and in the last ten years the processes have been intensified, as well as the investments in the area. Today both tourists and Panamanians are returning to Casco Viejo making it one of the most expensive residential and commercial districts of the country.
All this commercial activity and the boom in the rehabilitation of the Casco Viejo prompted the adoption of Law 136 in 2013, through which tax incentives are offered to landlords, tenants, owners and individuals or entities that invest in the rehabilitation and value of the historic area.
Recently, a draft law was presented to the National Assembly, which specifically seeks to amend Article 30 of Law 136, extending two years of fiscal benefits to investors developing projects in the Casco Viejo. This would give additional time to several investors currently processing loans or completing transactions.
Among the tax benefits granted by the law are: preferential mortgage loans, exemption from real estate tax (for 30 years), and exemption of the property tax that is transferred (for five years). At the time of its promulgation, the law established that, in order to obtain the incentives included in it, beneficiaries should carry out improvement and rehabilitation activities and investments in a period of up to two years from the date of entry into force Law.
However, the abovementioned period has not been sufficient and a profit gap has been created. This has adversely affected the approval of bank loans and financing, as well as the consequent loss of exemptions granted by law.
Once the amendment to Law 31 -proposed by the deputies Raúl Hernández and Adolfo Valderrama of the Commission for Economy Finance- is approved, the period in which the owners or investors will be able to access the incentives and benefits established will be two additional years. These will be extendable to equal term to consideration of the National Directorate of Historical Heritage of the National Institute of Culture.
With the extension of these fiscal incentives, the investment attraction in the Casco Viejo grows even more, thus increasing its commercial, residential and touristic value. As investment experts, in Almanza & Almanza we can advise you to take advantage of these tax incentives, thus streamlining legal procedures related to your investment in the coveted historic area of the country.
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