A New Life in Panama
Panama welcomes expatriate retirees with open arms. It offers the Pensionado Program, a neat package of the best incentives for retirees in the whole wide world. You don’t have to be sixty to qualify as you can be 19 years old and all you need to do is show that you have a monthly pension of $500 plus $100 per dependent to qualify for the program. You are also qualified to receive most of the benefits of the Pensionado Program if you are a female foreign resident who is at least 55 years old or a male foreign resident who is at least 60 years old. The benefits include but are not limited to the following:
- Tax free importation of household goods when you finally make the move to Panama and tax free importation of a new car every other year
- Discounts ranging from one to 50 percent on utility bills, airline tickets, loans, home mortgages, medicine, professional and technical services, dental and eye exams, and numerous other items.
Panama’s starts with the Pensionado Program but doesn’t end there. That is the reason why it is presently considered by many to be the world’s leading retirement destination. This together with the country straddling the Carribean Sea and the North Pacific Ocean, you can live the tranquil life in tropical paradise retreat.
Climate in Panama
The temperature is relatively constant in Panama. Panama City is warm and humid during the day but it is cooler at dawn and in the evenings. It is also cooler at areas in higher elevations. Air conditioning is used widely in Panama City. Temperatures range from 32 degrees C during daytime to 21 degrees C at night. The rainy season is fairly short, from October to November. From December to March the weather is generally cool and dry.
The country is located just nearly nine degrees north of the equator, with a rainy season colloquially known as invierno and the summer season called the orverano.
Government in Panama
The strategic value of the Panama Canal has brought both benefits and disadvantages to the people of Panama. The U.S. has made its presence felt in the country, especially in the 1989 U.S. invasion that brought down Panama’s president, General Manuel Noriega. In 2004, Martin Torrijos was elected president, with a program to enlarge the Panama Canal staring in 2008 and to strengthen the country’s economy through the Colon free trade zone. The U.S. remains Panama’s leading trading partner and user of the Canal. U.S. bases also contribute $250 M a year to Panama’s economy. In 2006 the U.S. and Panama inked a free trade agreement. A section of Panama’s population has long protested the strong U.S. influence and occasional intervention in the country’s internal affairs.
The current system of governance in the Isthmus is within a presidential representative republic with the President of Panama as head of state and head of government. The executive is the government, with the legislative power vested upon the National Assembly and an independent judiciary.
Medical Care in Panama
Panama offers expatriates high quality medical care delivered by U.S.-trained doctors and other health professionals at half what it would cost them in the U.S. A patient can avail of world-class hospitals, medical treatment, and medications in what is considered the safest city in the Americas. Even tap water in Panama is considered safe to drink. Finally health professionals in Panama are known for their empathy and tact in dealing with doctor-patient relations.
Tax System in Panama
Expatriates who are Panama residents do not have to pay taxes on income earned outside the country and do not have to pay property taxes for 20 years after you purchase or build your home. Personal income tax ranges from 4 to 30 percent. A five to ten percent VAT is imposed on most products and services. The seller pays transfer taxes on real estate. No inheritance or gift tax is collected by government on these transactions.
Real Estate in Panama
Foreigners and Panama’s citizens enjoy the same rights and protections in buying and owning property. There are no legal barriers to an expatriate who wants to buy a house or apartment for his residence or for investment purposes. The country has been attracting major attention from property investors in the past few years together with major changes in the economy. In addition, the country’s Public Registry is mandated to show proof of ownership and clear title to property.
In Panama City, there are well appointed apartments with an ocean setting and available in various prices to suit your budget and needs. The city is also undergoing a construction boom, featuring new office buildings, hotels and condominiums. Rental property in the cooler mountainous areas is highly prized and has real advantages as investments. Real estate can vary in price from less than one dollar per square meter in less accessible areas to areas closer to town costing $10 to $100 per square meter. Construction costs are less than in the U.S. The prices though have changed in the past few years as reflected in a post at the Rest of the World Expat Forum last April 4, 2008:
Now I’m in El Cangrejo, and I walk around in the evenings and feel fine. Taxis are cheap, which helps.
Panama has gotten much more expensive since my first visit here four years ago. For instance, rents are outrageous. I’ve been told that apartments that rented for only $550 about two years ago now are rented for $1400. I met a young woman doing a university internship here, and she was paying $550 for a room in a large ‘share house’. There is high rise construction everywhere.
The Boquete Mountains, the Pearl Islands beaches and Panama City itself are considered to be the prime areas for real estate. The Boquete Mountains are famed for their cool weather and unspoiled beauty while the Pearl Islands are noted for their clear water, white sand beaches, coral formations, and all the other ingredients of nature at its best.
Shopping in Panama
You can avail of duty free high-end goods in Panama and save at least a third of what they would ordinarily cost. Various malls have risen in the past years, offering great bargains in jewelry, clothes, handicrafts, perfume, art and antiques, and even custom made wooden doors. Jewelry includes copies of the pre-Columbian gold and silver ornaments as well as orchids, seashells and other objects of nature. You can also buy emeralds as loose stones or ready-made jewelry or you can have your own design executed by talented artisans. Panama is also known for quality leather goods, rugs, lamps, crystal, porcelain, woven baskets, and the like. Ibiza is a well-known chain that offers various lines of fragrances.
Cost of Living in Panama
You can live in Panama for a fraction of the cost in the U.S. and Europe. You pay 10-12 cents per kilowatt-hour of electricity. You pay only $18 A YEAR for water. Your trash will be collected for $7 a month. Fruits, meat, vegetables, eggs and other food items produced locally are much cheaper. You pay 30 cents for a can of local beer and the same amount for a cup of coffee. Housemaids and other help are paid less than a dollar an hour. You can build a home in Panama for about $40 per square foot. Once upon a time, you had to be rich to be able to retire in another country. Now retirees have to pursue their retirement plans abroad to be able to live comfortably on the pensions that they receive.
An expat shared an on the ground summary of the cost of living in Panama at the Rest of the World Expat Forum last September 5, 2009:
I don’t know what kind of price range you’re looking for, but a new 3 bedroom house with pool and landscaped property walking distance from the beach costs around $350,000 – pretty good deal. You can read more about why to retire in Panama at the Retirement detectives website as well.
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