Supply has never caught up with demand for affordable housing here in Panama and the government continues to come up with incentive plans and financial vehicles for developers and home buyers.  This is yet another creative way to give developers incentives to build.

Changes have been proposed to the tax code to stimulate the housing market through mutual funds.  From a report by the Cabinet of the Presidency of Panama:

The Cabinet has given the green light to a Bill amending Paragraph 2 of Article 706 of the Tax Code, which establishes a tax incentive for real estate investment companies and authorizes the Minister of Economy and Finance, through a Cabinet Resolution to submit the rule to the National Assembly, which aims to modify the special tax treatment of real estate investment companies, specified in the said Paragraph of the article in question, as added by section 18 of Act 8 2010.

The explanatory memorandum states that with this bill a proposal is being made to implement a tax regime similar to that of countries like the U.S., Spain, and Costa Rica, among others, where all investors are offered equally direct exposure to the housing market, with a high degree of liquidity and transparency, through a vehicle which investors can use to invest in property of scale which they would not normally have access to for themselves and in turn, stimulate the generation of alternatives for fundraising for real estate activities, which currently relies mainly on bank loans.