Here’s what you need to know about buying property in the historic neighborhood of Casco Viejo in Panama City, Panama. This guide and case study video covers buying tips and latest market updates for investing in real estate in Casco Viejo. For those looking to invest in Panama City, Panama real estate with both architectural character and investment quality, Casco Viejo offers the best selection of historical properties along with interesting investment incentives.
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Tax advantages of buying real estate in Casco Viejo
Casco Viejo is a designated UNESCO World Heritage Site. The historical Casco Law which expired in 2024 provided developments in the neighborhood with a 30-year property tax exemption. However, the law is being amended to continue providing this abatement, and individuals making real estate purchases in the neighborhood can save serious money. For the average person buying 500k of real estate, it could save them around $1200 a year.
Heritage laws can give you additional benefits. For example, if you invest at least $50,000 USD to build or renovate in Casco Viejo, you can qualify for exemption from the real estate transfer tax (2% of property value plus a 3% income tax advance).
Ongoing gentrification push
While refurbishment of the neighborhood has no doubt been accelerated by the influx of wealthy expatriates and developers from abroad, the government is equally eager to boost the restoration and gentrification of Casco Viejo. There are ongoing efforts in motion since the late 90s to incentivize current residents to relinquish property for restoration and be relocated. By some accounts, still around half of the buildings in the neighborhood require restoration.
The municipality is also investing in public facilities such as parks, swimming pools and football pitches to enhance the livability and atmosphere of the area.
The area most ripe for gentrification is the western part of the Casco Viejo, known locally as Santa Ana, while the eastern part of the peninsula known as San Felipe has already been substantially restored.
Occupancy rates in the Casco Viejo neighborhood are booming
Our sources on the ground have told us that luxury properties La Compañía and Sofitel are essentially fully booked through peak season, a testament to the neighborhood’s consistently high occupancy rates.
A new cruise ship terminal
The brand new Amador Cruise Ship Terminal was inaugurated in 2024 and is located a mere 10km (15-20 mins by car) from the Casco Viejo, at the entrance of the Panama Canal. Passengers arriving at Tocumen International Airport can spend a night in Casco Viejo on their way to the cruise terminal if their ship originates in Panama City, and in the opposite direction as well.
The terminal is one of the most modern in Central America and expects to welcome around 225 ship arrivals this season, representing around 450,000 passengers. Homeporting passengers at this terminal spend on average $350 in the city, and you can bet a healthy chunk of that ends up in Casco Viejo due to its proximity and appeal to short-term visitors.
Limited supply driving price growth
Unlike much of Panama City, where supply is relatively unconstrained, there are a limited number of properties available in Casco Viejo due to its size and its designation as a UNESCO World Heritage Site.
Each building has unique characteristics and provisions regarding how it can be modified or restored. There is also a restriction on the height of buildings in the neighborhood – you will not see dozens of high rise towers popping up here as they do in other parts of Panama City.
And while renovation costs here are substantially higher than other areas of Panama City, you can count on the limited inventory in Casco Viejo to preserve the value of your property with time. For some this may represent a safer investment than a luxury property elsewhere in the city that would be more vulnerable to depreciation.
Doing Airbnb in Casco Viejo
While technically not allowed, Airbnb properties still operate in the area to a degree. It is tolerated in some cases, but buildings are becoming increasingly restrictive, even writing the prohibition into their HOA bylaws. But the government has been lax about enforcing the law because they are understood to want as much visitor density in Casco Viejo as possible.
It is worth noting that some developers are building smaller units with Airbnb licenses around the city in general. In the Bella Vista area alone, there are 3 projects under construction with short term licenses already.
Rental calculations for Casco Viejo
Here is an example of recent performance of a rental property in the Casco View tower in the neighborhood.
Buying real estate in Casco Viejo with crypto
Some developers in Panama City are already accepting direct crypto payments for property purchases. Contact the team if you would like to learn more about how to purchase real estate with crypto in Panama City, Panama.
Case study of a real estate investment in Casco Viejo
Invest in Casco Viejo Panama City, Panama
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