Cabinet proposes law to exempt ITBMI on sales of new homes

The Panamanian Cabinet has approved a draft legislative decree that would exempt the Impuesto a Transferencias de Bienes Inmuebles (ITBMI) on the sale of newly constructed residential properties. The initiative, presented by the Ministry of Economy and Finance, aims to stimulate the real estate market and to make home ownership more affordable for first‑time buyers. Under the proposed amendment to Law 106 of 1974, transactions involving newly built homes would no longer be subject to the current transfer tax, which typically amounts to 2 percent of the property value. Proponents argue that the exemption will lower acquisition costs, encourage construction activity, and generate broader economic benefits such as job creation in the building sector and increased demand for related services. Critics, however, caution that the measure could reduce public revenue and must be carefully monitored to ensure fiscal balance. The Ministry has indicated that the exemption will be limited to properties built after a certain date and that the lost tax revenue will be offset by expected growth in the housing market and associated economic activity. The draft legislation is expected to be reviewed by the National Assembly in the coming weeks, where it will undergo debate and possible revisions before adoption.