New tax law to boost Panama

Panama may be best known for its famous canal, but it has also received a boost on the investment front from the property tax exemption laws for new buildings.

There had been concerns that the government was dragging its heels over the law for new construction which expired last August. Now it has been renewed which means that all projects that begin construction before July 2009 will be exempt from paying property taxes for 20 years.

This will undoubtedly boost the country's attraction for property investors. Although it is a small Central American country it has a thriving capital - Panama City - at its hub, an abundance of natural attractions including snorkelling, deep-sea fishing, unspoilt national parks, and a strong sense of its Spanish heritage.

The country has a tropical climate and a stunning Pacific coastline known as the Costa Blanca. Although it shares a certain Latin vibrancy with its namesake in Spain, it is comparatively untouched and more tranquil. This area is the most popular spot for tourists and property investors alike.

The country also has a very low cost of living which attracts visitors and expats form both Europe and North America. Panama may be a little further than Spain for European investors, but it is only a couple of hours from Miami and Orlando. Panama has all the attractions of a quintessential retirement destination attracting many visitors and expats from around the world.

The blend of tropical, Latin flavours and the feeling of a newly discovered resort paradise give the impression that the Costa Blanca may just be as good an investment as Spain's Costa Blanca was 15 years ago.

The weak dollar is also increasing interest from Europe in Panama property. The new direct flights from Amsterdam which started last month and it means northern Europeans can now avoid USA immigration and connections.

'We have noticed a massive increase in the demand for condo hotel property in the last six months; it's understandable when you look at the hotel rates and occupancy. It's a great solution for people looking for a hassle free property investment,' said Alan Morrison from Knightsbridge investment group.

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