Rights of Possession in Panama

This is going to be a multi-part blog post about the land survey we had to do before purchasing the farm. I’ll try to tell the story but as well will talk about the different issues one may encounter when buying land in Panama.

In general the more work you put into doing a proper land survey, the less trouble you will have later. Unlike Europe or the U.S. in Panama you have to look after yourself. I should add that I think this is not an issue specific to Panama. Europe and the U.S. have so many rules for almost everything and there is a lot of professionals who truly take care of their client that everyone somehow is checking on everybody else. Panama is part of the developing world where the few rules that exist can be bend easily and professionals mostly care about their own wellbeing - mainly out of necessity. Plus these societies have strong networks formed of people who know eachother and need eachother to survive. As an outsider you might easily get taken for a ride simply because it doesn’t hurt but provide an additional profit.

During all my travels I kept an open eye and learned about the importance of being street smart. Things may look good and perfectly fine on paper but that doesn’t mean they actually are.

I’ll tell more about all this step by step in between the pictures.

The land survey on the farm took three days in total. As I’ve told here before getting to the farm is not that easy. We have to cross two rivers and the only vehicle capable of reaching a point close to the farm over a dirt road, which has recently been carved out of the soil, is a lifted 4WD vehicle. I am more than satisfied with my Jeep and the differential lockers.

Our survey crew counted seven in total. We had the surveyer and his assistant, the former user of the land Raul, Luis, myself and two helpers. We managed to get everybody into and onto the Jeep. Two in the front, three on the backseat and two on the rear bumper. The two on the bumper got their feet wet a bit during the river crossings but it worked just fine. Who said a Jeep Wrangler were a two person vehicle :-)

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Above I was saying “the former user of the land” instead of previous owner. I should explain that a bit more. In Panama land can be owned as titled property or used by means of Rights of Possession. Most land in rural Panama is not titled property. The people working and living on it don’t own it. It is owned by the state. The people using it have been granted Rights of Possession by a government entity called “reforma agria”. I am not going into the history of this (you can find a lot using Google) but instead just outline the basics and explain what this all means to someone interested in aquiring land.

In order to get granted Rights of Possession one must work the land. One cannot claim a strip of virgin rainforest. Some agricultural or forestry activity has to happen there. In theory one may find a piece of land that nobody has claimed yet and get to work there. So if there are no signs of any activity, one asks “reforma agraria” for an inspection and confirmation that the land is indeed free. They send someone to document the current state of the land and grant Rights of Possession temporarely, if there are no conflicting claims. Then one starts working and after a few months one asks for another inspection so that they can document one is complying with all the requirements. Then one receives a certificate and is the owner of Rights of Possession on a strip of land described by landmarks and the borders of neighboring claims.

If one wishes, one can then do a land survey and buy the land from the government to turn it into titled property. Once land is titled property it is subject to property tax. As far as I know one has to pay property tax for land worth more than $30,000 or more than $150,000, if it is used for agriculture.

There are vast amounts of land “owned” by wealthy Panamanian families based on Rights of Possession. They are not interested in titled property because the government cannot tax land that is still owned by the government.

The next post will be about how to do a land survey.

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