The ongoing debate over short-term rentals in Panama has taken a clarifying turn. Hotel leaders emphasized this week that the proposed law does not aim to ban Airbnb-style stays, but to regulate them with clear rules on safety, taxes, and building administration rights.
According to Yovana Segarra, president of the Panamanian Hotel Association (Apatel), “this is about ensuring fair conditions, tourist safety, and protecting those who purchased properties as permanent homes.”
What’s in the Proposal?
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Clear framework: More than 13,000 short-term rentals currently operate without legal backing. The bill seeks to formalize their status.
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Taxes and fairness: Apatel suggested raising the ITBMS (sales tax) on short-term stays from 10% to 15%, plus a 5% contribution to a tourism development fund. Platforms would be asked to withhold and report these taxes directly.
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Safety standards: Rentals may need certifications for gas and electricity, civil liability insurance, sanitation checks, and fire-prevention equipment.
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Condo rules: Building boards would gain stronger authority to regulate or restrict vacation rentals, aiming to balance harmony among residents.
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Transparency: A public registry of licensed short-term rentals would be managed by the Tourism Authority.
Why It Matters for Expats and Owners
For many expats who own property in places like Boquete or Casco Viejo, the clarification is important. This law is not about shutting down rentals, but about establishing ground rules that mirror what countries like Costa Rica and Colombia already have in place.
The upside is stability: property owners would gain legal certainty, while renters and neighbors would benefit from improved safety and fairness. Yes, higher taxes could affect profitability, but regulation could also protect long-term value by creating a more professional market.
Final Thought
For travelers, short-term rentals will likely remain part of Panama’s hospitality landscape. For owners, it’s worth preparing for clearer rules that may add costs but also legitimacy to your investment.
Casa Solution will continue monitoring updates so property buyers and investors stay well informed.
Looking to explore property opportunities in Panama? From mountain retreats to historic city apartments, our team at Casa Solution is here to help you find the right fit.
Written on August 17, 2025
