Fly to let investors in Panama will benefit from new tax exemption law, which coupled with many other existing tax benefits, make the country an increasingly popular real estate investment location.

Housing Minister, Balbina Herrera, announced recently that the country will be extending its 20 year property tax exemption for foreign investors. Those who purchase property developments with building permits issued prior to 31 December 2009 will be exempt from paying any taxes on property transactions carried out in Panama until 2030.

Jose Boyd, president of the Panamanian Real Estate Association, (Asociación de Corredores de Bienes Raíces - ACOBIR), said: “What this does for the industry is fantastic. This applies to new buildings and existing colonial style structures.

“This puts Panama in a privileged position in the Central American real estate community as our neighbours are having a hard time in the current economic climate and this is creative and shows the world that we are a happening and serious location for international property investment."

Propertyshowrooms.com analyst, Sara Romera, added: “Panama City centre property performs immaculately in the investment scale - property appreciates well as in other quality negatively geared investments yet cash flow income returns are apparent.”

“The country boasts increasing visitor numbers, 85 percent of which remain in the city centre during their visit. The strong influence of the Canal is apparent, accentuating the city's status as a commercial hub, offering a gateway between the Atlantic and Pacific Oceans.”

• Interest-free payment terms from as low as a £499 a month over two years will buy fly to let investors a freehold property in the five-star West Side Village in the Egyptian resort of Hurghada.

The studio apartments start at just under £20,000 and these are predicted to offer a profit of over £10,000 upon completion in 2010, and £40,000 after just five years. This does not include the rental potential.

West Side Village is a luxury gated community in the heart of vibrant Hurghada offering 24-hour security, on-site management, parking and is situated 250 metres from the sea. Amenities include restaurants, cafés, bars, a private health and beauty Spa, three communal swimming pools, a five-star hotel club and private beach access.

The village offers 686 properties with prices ranging from £19,964 for the studio apartments to £60,000 for a three-bedroom apartment or penthouse suite – these come with an extra roof terrace with panoramic views.

Each purchase comes with an easy payment plan with an initial 40 percent outlay (around £8,000 on a studio apartment). The remaining 60 percent is to be paid off in monthly, interest-free instalments over 24 months, at the end of which the property is owned freehold.

There is also the benefit of no capital gains or inheritance tax, the possibility of good rental returns and capital appreciation.

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