As Panama continues to attract tourists, digital nomads, and relocating expats, the country’s thriving short-term rental market – bolstered by platforms like Airbnb, Vrbo, and Booking.com – is now under review. A newly proposed law seeks to create a more formal regulatory framework for these rentals, particularly in urban areas and condo developments. While the changes raise questions for property owners and investors, they also signal Panama’s intention to adapt its tourism infrastructure for long-term growth.
A Blossoming Market Driven by Everyday Owners
Short-term vacation rentals have become an increasingly popular way for everyday Panamanians and expats to earn income from real estate. Whether it’s a cozy beach home in Pedasí or a city-view apartment in Panama City’s San Francisco or Casco Viejo neighborhoods, these listings have helped distribute tourism benefits across a wider range of communities.
For many, short-term stays offer flexibility, higher returns compared to traditional long-term leases, and the ability to personally manage properties without large intermediaries. Guests, in turn, enjoy more authentic and cost-effective lodging options throughout the country – from tropical getaways in Bocas del Toro to charming countryside retreats.
New Legislation Seeks to Establish Clearer Guidelines
A bill recently introduced by Deputy Neftalí Zamora proposes new regulations that could impact the short-term rental landscape. The initiative includes measures such as:
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Allowing condominium boards (PHs) to vote on whether to permit short-term rentals in their buildings
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Introducing a 10% to 20% tax on short-stay accommodations
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Placing oversight of customer complaints under the jurisdiction of the national consumer protection agency, Acodeco
Supporters argue that the bill offers a legal framework to better organize this growing sector, provide consumer protection, and ensure fair contribution to the tax system. The Ministry of Tourism has also expressed its interest in crafting more comprehensive laws that reflect the evolving nature of hospitality in Panama.
What This Means for Real Estate Investors and Hosts
For homeowners and investors, especially those with listings in condominiums or urban zones, the proposal may lead to some added operational requirements. However, it’s important to note that this is not a ban – it’s a call for structure.
Properties that are stand-alone or located in areas without strict PH rules may not be affected in the same way, making them particularly attractive for those looking to operate rentals without community restrictions. Likewise, buyers might increasingly gravitate toward markets where municipalities are actively supportive of tourism-driven rental income.
Tourism zones like Pedasí, Bocas del Toro, and coastal parts of Veraguas already welcome short-term guests, and continued interest in these areas is likely. For new buyers, understanding the community’s stance and any local regulations will become more essential, just like in other global real estate markets.
Still a Bright Future for Panama’s Tourism Economy
Despite the regulatory conversation, Panama remains an attractive and welcoming destination for travelers and foreign residents alike. Its combination of modern infrastructure, natural beauty, and relative affordability continues to draw interest from across the globe.
If anything, this move may help bring greater transparency to the short-term rental space, paving the way for new developments that are specifically built and zoned for short-term use. This could unlock new investment opportunities, especially in emerging projects tailored to vacation rental demand.
Takeaway for Buyers and Sellers
As with any dynamic market, being informed is key. While proposed changes might reshape some aspects of short-term rentals, they also encourage responsible growth and offer clarity to future investors. It’s a natural progression for a maturing market, and one that, with the right guidance, can still offer excellent real estate opportunities for those seeking income-producing properties in Panama.
If you’re considering buying property in Panama – whether for personal use, full-time relocation, or short-term rental income – Casa Solution is here to help. Our team provides expert insight on where to buy, local rules, and how to maximize your investment. Reach out today for guidance tailored to your goals.
