The government of Panama has removed a tax incentive for new home buyers, sparking concern in the construction sector. The 2% Real Estate Transfer Tax (ITBI) will now apply to all property transactions, including new construction. Previously, this tax had been exempt for new homes for 50 years and served as a key incentive for homeownership. According to the National Housing Council (Convivienda), 81% of home sales fall into the price range of up to $120,000. Experts warn that the new tax will make homeownership inaccessible to 72% of the population earning less than $1,000 per month. Representatives of the construction industry argue that for every dollar invested in construction, $2.34 is generated in the economy, but the new tax will reduce construction and sales, leading to a loss of state revenue. In 2025, sales of new homes fell by 34.38% compared to 2024, and the removal of incentives will worsen this trend, exacerbating the country's housing deficit of 180,000 units. "This tax will affect families with less purchasing power," insisted Elisa Suárez, director of Convivienda, calling for the law to be revised to restore the exemption for new homes.
