The much debated land law regarding coastal and islands right of possession (ROP) land has been approved by the national assembly and will most likely be signed off by the president. As the article in today's La Prensa points out, many farmers will not be able to afford the cost of buying and titling the land so they will most likely leave things as they are. even if they hold less than 5 hectares this may be best for them as once the property is titled at these much higher values, a property tax will be required on a yearly basis. Unless you have an intention to sell the land I see no advantage at all to title it
A provision in the law is that in order to title, the applicant must have held ROP for at least 5 years which makes me question what happens to any recent purchases and transfers of ROP. Must the land revert back to the original holder, or can the new holder wait out the needed time and then apply for title. In either case it is going to cost them a lot more than they bargained for and I would imagine many will just do nothing.
The price of coastal and island land will undoubtedly go up dramatically just at a time when the market is in the tank. If a farmer wants to sell this land in the future, he will first need pay for it according to the newly establish values to get title. This will greatly reduce the amount he would receive from a sale as the government is now his partner in any transaction. If he wants to make a profit he will have to add to the government established price. With these new higher prices most likely very little land will be titled at all. Only low value land where no property taxes will need to be paid each year will probably get title, bringing little or nothing to the government for all its efforts in making this law.
This is really coming at a bad time in the real estate business as sales of new projects is very slow and money for development is extremely hard if not impossible to come by. Although I am sure there will be many unhappy foreigners who bought land in good faith from ROP holders, I hope this brings a close to the controversy and questions surrounding rights of possession land in Panama. The lesson here is don't trust what people tell you about transferring land they do not own and if you cannot get a title don't buy.
La Prensa: JOSÉ GONZÁLEZ PINILLA
The Assembly passed last night, third debate, the bill to reform the law on certification of islands and coasts, recognizing, in particular circumstances-possessory rights.
The proposal, which requires the sanction of the executive to become law of the Republic, received 41 votes for and 21 against.
The Minister of Economy and Finance, Alberto Vallarino, said the document was opposed to "big money interests who wanted to monopolize the nation wasteland for a song, but this law has been put on a high."
The project owner may land on the nation's heritage assets, national waste lands, coasts and islands. Who has more, shall pay to the State, as a fee.
The proposal included a price chart divided into three zones-Pacific, Atlantic and Island-and, depending on the area, established a price range per hectare which is a thousand to 700 thousand dollars.
This price table is valid for three years and will be updated after public consultation.
Furthermore, if a person with a possessory right to the holder, must show that occupied the land for a continuous period of five years. Same is true for investors who have acquired land under that figure.
The bill provides that all applications for land purchases to be made publicly accessible state.
Opposition deputies criticized the proposal, after sustaining many farmers title to their lands shall not because of what they called "unaffordable prices. "People with humility over 5 acres with possessory rights holder can not," said Rep. Elijah Castillo.