Cash in on a home away from home: promising property hotspots for 2008

My hot tip for 2008 is Panama, one of the best places in the world to retire with or without a canoe.

Panama City can be reached in the same day from Britain via Miami or New York. Property prices are rising fast, but given the local tender is the US dollar, Britons can get more for their money. A 7.4-acre farm in the scenic Chiriqui highlands of Boquete can be yours for $95,000; a 27-acre private island, with a teak plantation, in the Gulf of Panama for $550,000.

A four-bedroom resale house overlooking the Pacific, a 90-minute drive from Panama City, is available at $285,000. Or, you could buy a quarter-acre beachfront lot on the idyllic Bocas Del Toro archipelago for $159,000 and build your own shack.

A new luxury two-bedroom condo overlooking a marina at Portobello, on the Caribbean coast, an hour’s drive from Panama City, costs $370,000. Each has a jacuzzi on the terrace and a 9% rental return (Bridge Property).

The skyline of Panama City is more like Manhattan. You can still find high-rise flats in good residential areas with ocean views priced from $150,000 to $250,000. When complete in 2009, Los Faros de Panama will be the tallest residential building in Latin America (over l,000 ft); off-plan apartments start at £142,000 (Pure International).

A former US Navy base has been flattened on Perico Island – connected to the mainland by a causeway – and a residential complex is being built. Located at the tip of the Panama Canal, apartments at Las Brisas enjoy panoramic views over Panama City. A two bedroom flat costs $329,000 (Bridge Property).

Buying costs amount to around 3.5% of the purchase price. Properties are exempt from annual real estate tax for up to 15 years, depending upon value. Those valued over $250,000 are only exempt for five years, after which time a tax of between 0.5% and 2.5% is levied. Capital gains tax is payable at 10% on any profits made on resale.

Brazil

With the largest economy in South America, Brazil is expected to experience huge growth in the coming decades. It offers year-round sunshine, beautiful beaches and a low cost of living. The Brazilian tourist industry grew by 134% between 2002 and 2005; demand for short-term rentals is increasing and there is a shortage of good quality holiday accommodation.

Foreign investment is encouraged, and there are no restrictions on freehold property ownership. Figures from the Brazilian Central Bank reveal that foreigners invested $1.3bn in real estate in 2006. Property prices in some holiday developments along the north-east coast have gained 35% in the past year, according to the Association of Real Estate and Tourism Development.