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Lifestyle
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RE/MAX Paradise Team
This is the article most likely to save a buyer money, because the rule at its centre is widely unknown: in the District of Panama, rentals of under 45 consecutive days are restricted without a tourist lodging permit. The legal basis is Ley 80 de 2012, the permit is a permiso de alojamiento público turístico from the Autoridad de Turismo de Panamá, and reported fines run from B/.5,000 to B/.50,000 — with the law also covering electronic advertising of unauthorised stays.
Plenty of Panama City apartments are listed nightly on booking platforms. That a listing exists does not mean it is authorised.
What exactly does the rule say?
Ley 80 de 2012 regulates tourism accommodation and restricts rentals under 45 consecutive days within the District of Panama. Letting a standard residential apartment for stays shorter than that requires the tourist lodging permit from the ATP.
Two practical consequences:
A standard residential apartment in most of Panama City is intended for longer-term letting, not nightly stays.
Advertising unauthorised short stays is itself covered by the law, so the listing is not a safe harbour.
Where is short-term letting permitted?
There are genuine routes, and they matter for anyone building a short-stay strategy:
Casco Viejo and parts of Santa Ana. These historic districts are designated tourism zones where short-term rentals are permitted with proper licensing — the clearest route inside Panama City. See our Casco Viejo guide.
Properties with an ATP tourist lodging permit. The permit exists precisely to authorise this; the question is whether your specific property and building can obtain one.
Purpose-built mixed-use projects. In 2026, regulatory flexibility in areas of tourist interest and new mixed-use models have allowed specific projects to be structured for legitimate short-stay operation from the outset. If nightly letting is your plan, these projects are worth seeking out specifically.
Outside the District of Panama. Short-term renting is allowed in most of the rest of the country — the 45-day restriction is specific to the District of Panama. Beach and island areas operate differently.
The building can restrict it even where the law allows
Separate from national law, your PH (propiedad horizontal) regulations may prohibit or limit short-term letting regardless of permits. Many Panama City buildings restrict it for exactly the reasons residents dislike it — turnover, noise, security.
Before buying on a short-stay thesis, obtain and read the building’s regulations. This is a standard item on our due diligence checklist and it is not something to check after closing.
Do the returns justify it?
Short-stay letting produces higher gross revenue per night, but the cost structure is considerably heavier:
Long-term letting | Short-term letting | |
|---|---|---|
Management fee | 8–12% of gross rent | 15–25% of gross |
Turnover | Low | Constant |
Cleaning and linen | Tenant’s responsibility | Per stay, ongoing |
Furnishing | Often unfurnished | Full fit-out plus replacement |
Vacancy | Between tenancies | Seasonal and constant |
Legal complexity | Straightforward | Permit required under 45 days |
Wear | Moderate | Higher |
Management alone roughly doubles. Add cleaning, utilities you now pay, furnishing replacement and seasonal vacancy, and the gap between gross and net narrows sharply. Panama City’s long-term market is genuinely strong — rents up roughly 8–15% over the past year — which raises the bar that a short-stay strategy has to clear.
How to approach it properly
Decide the strategy before you buy, not after. It determines which districts and buildings are even viable.
Confirm the legal position for that specific property with a Panamanian attorney — district, zone designation, and permit feasibility.
Read the PH regulations for the building.
Model net, not gross. Use 15–25% management, realistic occupancy, and full operating costs.
Compare against long-term on the same property. Often the simpler option wins once costs are honest.
Frequently asked questions
Is Airbnb legal in Panama City?
Short-term renting is allowed in most of Panama, but within the District of Panama, stays under 45 consecutive days require a tourist lodging permit from the Autoridad de Turismo de Panamá under Ley 80 de 2012. Casco Viejo and parts of Santa Ana are designated tourism zones where short-term rentals are permitted with proper licensing.
What are the penalties for illegal short-term rentals in Panama?
Reported fines range from B/.5,000 to B/.50,000, and the law also covers electronic advertising of unauthorised stays.
What does short-term rental management cost in Panama?
Typically 15–25% of gross revenue, against 8–12% for long-term management, reflecting turnover, cleaning and guest communication.
Can I rent short-term outside Panama City?
The 45-day restriction applies within the District of Panama. Short-term renting is allowed in most of the rest of the country, though building regulations and local requirements still apply. Verify for your specific property.
Planning a rental strategy? Book a free consultation — we will tell you what is legally viable for a given building before you commit.
General information only, not legal advice. Short-term rental regulation is evolving and enforcement varies. Confirm the current position for your specific property with a Panamanian attorney before letting.