There are a number of procedures involved with building a home in Panama. Before you purchase the land you should carry out a preliminary study and check on access for mains services like water and electricity. In some areas you may require an environmental impact study before you are permitted to carry out any building work but many areas have no building restrictions. You will need to apply to the local authorities for a permit to build. If the land has trees on it which are to be removed the builder will need to apply to the Panama Environmental Protection Agency for a permit to do so.

It will be necessary to hire the services of an architect or civil engineer but you will need to get a number of quotes and ensure that you get references. Ask to pay a visit to at least one home that they have built. When agreeing a contract there are a number of things that should be included. The contract should include the start date and an agreed completion date for each section of the work. A list detailing all the materials that are needed and the cost should be part of the contract and a list of every task to be carried out.

The contract should include an agreement that all work that is to be carried out and paid for by you should be included in the contract. There should also be an agreement on how errors during the construction work are to be resolved and paid for. If there are any delays on the part of the builder the owner can be compensated and the contract should detail the rates for this per day.

The builder will apply for the construction permit but you will need to check it before work begins. The description on the permit will need to match the description on the property deeds that you have and the map of your boundaries that you can obtain from the Catastro office. Planning permission is unlikely to be refused as development is considered to be very important in Panama at the current time.

The cost of constructing a home varies and will rely on a number of factors such as the accessibility of the site, availability of materials and the type of home you want. Another factor is the area in which you are building. Some materials that are available in Panama City may not be readily available in more rural areas of the country. Your builder will be able to advise you on the cost of the different types of materials and help you to determine which ones will be best for your project.

When the work is being carried out you should be prepared to visit the building site everyday in order to ensure that the work is being carried out on schedule. At the end of the build you should be able to walk through the property and agree that all the work has been carried out to your specifications. You should check for the type of materials that have been used, for any cracks in the walls, floors and ceilings and check that the house meets all the details which were laid down in the contract. You can add changes to the contract for the work that is to be done as the work is going along, but the change will need to be detailed in the contract for legal reasons.

Once you have carried out your final walk through of the house and have agreed that there is no further work to be carried out you can obtain an occupation permit. This is issued by the local fire department and means that they have declared the house to be safe for habitation. If you move into your new home without the relevant permit you can be prosecuted and fined. Without the permit you can also be sued if there is a fire.

Once the work has been carried out you will not be liable for property taxes for the first 20 years after the house is built although you will be liable for any taxes if you choose to sell the house within that time.