Going totally tropical

Buy a house in Panama? Well, Richard Paris says, it's the new hotspot for US retirees - and the tax breaks ain't bad

If Panama does not spring immediately to mind as a fiscally sound, orderly and safe tropical paradise ideally suited for people seeking a radical change or as a place to buy a second home, that's probably only because you are reading in Britain and not in North America.

If Panama does not spring immediately to mind as a fiscally sound, orderly and safe tropical paradise ideally suited for people seeking a radical change or as a place to buy a second home, that's probably only because you are reading in Britain and not in North America.

Bocas del Toro has become Panama's most sought-after place to settle for US expats. Named by Christopher Columbus after a rock which reminded him of an open-mouthed bull, the modern boundaries of this lush jungle region start at the volcanic Talamanca mountains that form the spine of the country, and extend across a complex archipelago of verdant Caribbean islands and mainland peninsulas, which until 20 years ago were accessible only by boat and light aircraft.

The province's capital - also called Bocas del Toro - is a picturesque community of weathered wooden buildings perched on a tiny peninsula at the tip of the one of the largest islands in the archipelago, Colon. During the early 20th century, Bocas was the headquarters of the United Fruit Company - the multi-national which eventually dominated much of the Central American banana industry under the brand name, Chiquita. Well into the 1920s, its then 20,000 cosmopolitan inhabitants supported several consulates and three daily newspapers. But a banana blight brought economic collapse.

Its renaissance came in the late 1990s. Today one finds an eclectic mix of perhaps 200 or so settlers (out of a population of just 4,500) who love that their tropical wilderness is a beguiling open-air botanical garden, aviary and aquarium on a scale so vast that it has been the setting for half a dozen countries' reality "survivor" programmes.

Britons interested in the possibility of retiring to Bocas del Toro or starting a business there should spend at least a month on site exploring the options. If you are building a house, you will need to rent while the construction is taking place: there are few vacant plots left in the centre of the town and centrally located houses come up for sale only occasionally. More typically, new residents buy 500 to 1000 sq m on Isla Colon, or on the waterfront within 10 to 30 minutes of Bocas town.

Property prices have risen substantially in the past two years but thanks to the shrinking US dollar - also the currency of Panama - they are still relatively low for European wallets: typically $50,000 to $70,000 (£28,000 to £38,00) for 500 sq m. A three-bedroom house made of steel, concrete and wood and built to "gringo" standards can take up to a year to complete and cost, on average, between $75,000 and $100,000. Officially, there is a 2 per cent one-off sales tax, but owners who develop their land are exempt from property taxes for 20 years. New businesses are encouraged as long as no job that can be performed by a local worker is taken by a foreigner.

Those who prefer the isolation of the mainland jungle with its numerous bays and abundant wildlife might consider buying a finca (small farm). Farms of 8 to 12 hectares are available for $40,000 to $100,000 if you want the house too. As there are no roads, you will need a powerful all-weather boat, along with a crash course in navigation to make your way in and around the maze of shallow coral reefs and mangrove channels. In the fertile soil of the region, you can easily grow almost anything that will withstand a tropical climate.

However, finding a suitable property is no straightforward business. Estate agents are not regulated and negotiating directly with owners is possible but tricky for newcomers who have no contacts. But two highly respected local Bocatorenos have been helping expats move to the region.

Oriel Bethancourt was handling property transactions for the government before he became a freelance consultant. He is uniquely well placed, therefore, to assist not only with finding local properties, but also with the administrative work involving local lawyers and notaries. He also has access to some of the most reliable builders and architects. Bethancourt takes a 10 per cent commission on sales.

Virginia Vasquez owns Island Business Management, and helps foreign buyers with the finish of their property as well as its subsequent management and even letting. Vasquez not only acts as interpreter but can also help source furnishings and find reliable cleaners, gardeners and other workmen as required.

Former British Army officer and London art dealer Malcolm Henderson and his American artist wife, Pat Buckley Moss, were reaching their mid-sixties when they first visited Bocas del Toro in 1997. Within 48 hours, had bought a house on the island of Carenero and a rain forest alongside an idyllic beach on nearby Isla Bastimentos.

Now, Pat spends most days painting in her air-conditioned studio at the top of their elegant white townhouse. Malcolm divides his time between overseeing his wife's career and their foundation in the United States for children with learning disabilities as well as managing an organic chicken and pig farm half an hour away by boat. They own four other properties and have spearheaded fund-raising projects to improve the rudimentary schools for the local Indian community. Malcolm has also recently published a hilarious account of their life in Bocas, Don't Kill the Cow Too Quick, available locally, and required reading for any would-be settler.

Oriel Bethancourt: orielb13@yahoo.com; Virginia Vasquez: oficina2@cw.panama.net

PANAMA IN BRIEF

Getting there

Panama City can be reached the same day from Britain via the US or Caribbean islands; Bocas del Toro is an hour's flight away from the capital. Ferries and water taxis link Bocas town with the mainland banana ports of Changuinola and Almirante, which are, in turn, linked by all-weather roads to the Costa Rican frontier and the Pan-American highway.

Who rates it

The American magazine International Living rates Panama as one of the top three Latin American destinations for retirees on grounds of safety and cost of living.

Them's the tax breaks

Britons are not subject to double taxation on their property and UK-based income in Panama.

Speaking the lingo

English is widely spoken by the majority black population in Bocas, as well as Spanish, so communicating is rarely a problem.

Staying healthy

Private medicine is inexpensive (although medical conditions requiring treatment with the latest technology would necessitate a trip to the western provincial city of David, a 30-minute flight or six-hour ferry and road trip).