Pedasi Market Update 2018 - Panama Equity

What’s New In Pedasi?

Building on the momentum that was already underway last year, Pedasí is having a great start to 2018 in terms of both government infrastructure spending and community support and organization.  The Panamanian property tax law reforms also take effect this January 1st, 2019. The new law has important implications for current as well as future property owners.

 

Panama Equity has spent the last ten years right here in Pedasi developing local market knowledge and helping both buyers and sellers do business safely and effectively.  Our wide variety of listings runs the gamut from $18k home lots to $20MM development parcels; from $89k homes to multi-million dollar estates. Simply put, we have our finger on the pulse of the market and we know the inventory inside and out.  We welcome the chance to help you join our great community.

 

Impressions

On The Path of Progress

Pedasí just got a little bit closer.  Well, not really, but the 30-mile (50km) stretch of national highway between Las Tablas and Pedasi has been re-surfaced and expanded over the past several months.  Ministry of Public Works (MOP) road crews are busy finishing the final few sections leading into Pedasí and by mid-2018 we should have roughly 80 miles (130km) of brand-new roads stretching from Divisa to Pedasi.  While the new Pedasí portion may help to shave only a few minutes from the total drive, faster is NOT the goal here. Rather safety and comfort are what these improvements bring. Driving to Pedasi from the rest of the country has never been safer, easier or more comfortable (…OK, or faster).  Expect the drive from Divisa (1st turnoff south from the Inter or Pan-American Highway) to Pedasí to take roughly 2hrs of total drive time. There are very few turns to make; however downloading Waze onto your telephone prior to your trip should help you to more easily navigate the distance.

 

While driving to Pedasí is now a breeze, the 15 miles (25km) of roadway from Pedasí to Playa Venao is still in need of resurfacing.  The heavy rains of 2017 and the steady passage of heavy farm equipment and cattle all contributed to the deterioration of the paved road surface.  Ministry of Public Works (MOP) crews have since managed to patch the entire stretch and the ride is again pleasant, still resurfacing is sorely needed and will hopefully be among MOP’s 2018 project list.  As always, please keep in mind that speed traps are very common throughout Panama, so if you plan on driving make sure to obey all posted speed limits.

 

Pedasi Market Update 2018 - Panama Equity 

 

Turning to other news, you may remember from our last report that the new MINSA-CAPSI hospital is now open.  The hospital has improved both the quality of and access to our local short-term, step down level of health care services.  Bear in mind that Pedasí is still very much rural Panama and advanced care for more complex medical conditions is still found in the larger urban centers of Las Tablas (30 mins), Chitre (1hr) and Panama City.  That said, an unsung hero of the Pedasí community is the vast amount of knowledge and experience its residents possess and their willingness to come to the aid of those in need. While anyone can easily find solitude in Pedasí, nobody is EVER alone in this great community.  Friends, neighbors and complete strangers form an absolutely priceless support network that can (and will) spring quickly into action when needed. In Pedasí you are never very far from a friend who cares.

 

The recent upgrades to our power and water systems also helped to drastically reduce the frequency and duration of outages this dry season.  Both of these upgrades were sorely needed and are helping to meet the daily demands of our growing community. As Rome wasn’t built in a day, upgrades to the power distribution system are not instantaneous.  Overall the incidence of outages, dips and spikes has been reduced, but certain neighborhoods in town still experience more frequent outages than do others. In fairness though, the march towards progress is stepwise and hopefully soon the entire system will be upgraded.  Still, many clever folks do have backup generators a/o reserve water tanks and so never feel the effects of the short-term inconvenience as their neighbors might.

 

Pedasi Market Update 2018 - Panama Equity

 

The municipal government did an amazing job last year of renovating and beautifying our town square.  The effort has brought the center of town to life in the evenings and is putting our small town square on the cultural map in Central America.  Several new restaurants and businesses have also opened recently, including new real estate and property management services, legal and accounting services and also retail shops like Pedasi Love, which offers an assortment of locally-made handicrafts, souvenir items and farm-fresh market goods such as artisanal breads and produce.  Some of our favorite restaurants both new and old are Smiley’s for grilled and local fare, Bohemia for pizzas, Segreto for pastas (and homemade tiramisu), Tortuga’s for Mexican, Chichemito’s for grilled and local flavors, Moana for a tasty variety of burgers and other grilled fare…. the list goes on and on and on…

 

Several volunteer groups are also pitching in to make Pedasi a better place for everyone.  Animal Advocates of Pedasi organizes spay and neuter clinics and has succeeded in sterilizing thousands of dogs and cats over the years.  This is a huge boon to our community and helps to reduce the population of strays. Pedasí Paws is also a new and very popular doggie hotel where your pooch can get pampered as much or more than they would at home!  The Waved Foundation is a growing non-profit organization that collects donations through surfing and administers the money to local schools around the region. Our new Neighborhood Watch program is also up and running and allows us to work together with local law enforcement to make Pedasi an even safer place to live.  All of these groups and many more like them are making a real impact.

 Latest Pedasi Properties

Real Estate Panorama 2018

The 2017 buyer’s market continues into Q2 2018.  Sales of finished homes have been slow while sales of pre-construction offerings and home lots have been steady and, in the case of Playa Venao, have increased over this time last year. The continued development of Playa Venao as a tourism and residential area offers buyers even more options when making their purchase decision. This increased inventory is great for buyers, but sellers facing greater competition are feeling the squeeze. Due to this fact a few sellers have lowered their prices while our buyers are taking note and getting some fantastic deals.

 

Pedasí’s flagship oceanfront gated communities continue to make strides as well.  Costa Pedasí has turned an important corner by ratifying the Homeowner’s Association (HOA) and has successfully negotiated ownership of the project’s common spaces and a number of the developer’s ocean view lots.  The HOA has also become a member of the Pedasi Neighborhood Watch program and active volunteers of the local animal advocacy as well as the sea turtle conservation program. Andromeda Ocean Estates is also moving towards establishing a formal community association.  The management of the common areas and the beach clubhouse is now under the administration of a newly established homeowner’s group that is making important investments in project amenities and infrastructure. Self-governance and determination is the new standard in both projects and means that home and lot owners are now able to chart their own course.  Panama Equity has both developer and resale properties available in both projects and would love to help you join either of these two communities.

 

The Panamanian property tax law reforms will also take effect this January 1st, 2019.  Homeowners who voluntarily register their house at the Tax Office (DGI) as a primary residence or homestead are eligible for 0%, provided that the property value is below $120,000.  In the event the property value exceeds $120,000.00 the following tax rate is applicable:

  • 0.50% to the tax basis between $120,000.00 and $700,000.00
  • 0.70% to the tax basis that exceeds $700,000.00

Any other property (non-primary residences, commercial property, etc.) is taxable as per the below rate:

  • 0% to the tax basis between $0.00 and $30,000.00
  • 0.60% to the tax basis between $30,001.00 and $250,000.00
  • 0.80% to the tax basis between $250,000.00 and $500,000.00
  • 1% to the tax basis that exceeds $500,000.00

 

While long-term property tax exonerations (20yr, 10yr, 5yr) will no longer be granted from 2019 onwards, the new property tax regime is a long-awaited and highly anticipated reform to the tax code.  It is important to note that existing exonerations will be grandfathered in with the new tax rules and allowed to expire naturally. In fact, for those of who are about to finish construction of a new home in Panama or who have not yet declared their improvements, we recommend that you speak with an attorney about what you can do right now to try and qualify for a long-term tax exoneration before the new tax laws take effect.

 

Likewise, before making your investment decision, we recommend that you to speak with a tax professional regarding how the new Panamanian tax laws might affect your Panamanian tax situation as well as your reporting obligations in your home country.  Our agents can refer you to the most trusted and experienced tax specialists and attorneys no matter where in Panama you decide to invest.

Panama Equity is here to help you dig in and focus on the pros and cons of owning real estate in Panama.  That means covering the basics like “Is Panama right for me?”, “what part of Panama will suit me?”, “should I rent or own?” and that old chestnut; “which type of property makes the most sense for me to own?”.  Get in touch with us today and let’s start digging in. We look forward to hearing from you.

Pedasi Market Update 2018 - Panama Equity

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