The question on a lot of people’s minds at the moment is whether Panama is the new Costa Rica? With the exponential boom in housing and land prices in Panama it is very much resembling what happened in Costa Rica. However it would appear that in the Tourism sense, Panama is lagging behind in Tourism. At the recent ANCHAM conference at the Intercontinental Playa Bonita in Panama it was highlighted by one the guest speakers that one of the main reasons that Panama has seen a tourism growth stump is due to the lack of training given to Panama.
Speaking to an investor that has shown their interest in Panama’s property market said “I must admit that every time I go to Panama I hope that the service has become better, however every time it seems to be the same, everything is always done on their own time and this is one of the reasons that Panama may not become the tourism destination it wants to be. You kind of feel like you are imposing on them, even after paying $250 a night for your hotel room.”
This coupled with the exponential price increase of land at the beach is strangling the opportunity for investors to build new hotels. Who in the right mind would want to pay $500/squared meter? In order to build a decent sized hotel hoteliers would be looking at a start up cost of anywhere from $1-5 million just for the land. Prices of beach property within 3 hours from Panama City have gone crazy and it has made developers build tower condo units. Costa Rica has zoning rules with regards to these towers, if you can believe it. You cannot build above 14m (3 stories) within 300m from high tide and there is also the maritime law of no buildings within 50m of high tide. Panama also has the maritime law but it is only 25m. Panama needs to take control over its construction limitations otherwise there will be a new Cancun or Miami on the map!!
Costa Rica has over the past couple of years started to close its doors to retiring residents here as it increases the monthly income amount to be eligible to apply and the benifits that go with this. However Panama is wide open and the benefits to retirees is fantastic; in fact why not retire early just to make the savings.
- No tax on the import imported cars or household goods.
- No income tax on income from outside Panama.
- No property taxes for 5,10 or 15 years depending on the property.
- Discounts on prescriptions, utility bills, cars, restaurants, lodging and much more.
One of the most apparent differences between the 2 countries is the infrastructure. Panama having been occupied by the US in the 1980’s has well built smooth roads that are fabulous and also the buildings are not all tin. Costa Rica is well known for having terrible roads however it is a pleasure to drive in Panama. The City of Panama offers a metropolitan way of living with state of the art medical facilities, shopping, hotels, etc. However the people of Panama are not as friendly as the “Pura Vida” Costa Rican’s. Also you would think that have been occupied by the US Panamanians would speak English more than the Costa Rican’s, however this is not the case. Due to the tourism industry being a big part of the GDP in Costa Rica there is a necessity to speak English.
What can be concluded is that Panama is definitely the most attractive country to retire in, however as a tourist destination Costa Rica is more advanced, however this means that Panama is more natural. Why not visit both countries with us and then tell us what you think