Real Estate in Colombia
Invest in Medellín, the second most visited destination in Colombia. The City of Eternal Spring offers opportunities with affordable prices and a rising economy.
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No Restrictions for Foreigners
In Colombia, foreigners can purchase property with the same rights as citizens and permanent residents. There is no visa or residency requirement for purchasing, and the process is straightforward. Furthermore, it is possible to complete the purchase remotely using a notarized power of attorney, without the need for physical presence in the country.
Residency by Investment
Investing in real estate in Colombia can pave the way for residency in the country. The Real Estate Investment Visa (Type M-10) requires a minimum investment of approximately $107,000 USD in Colombian properties. This visa is valid for three years and can be renewed. After five years, you may apply for permanent residency, and after ten years, Colombian citizenship.
Growing Real Estate Market
Colombia has shown economic growth and political stability in recent years, which has positively impacted the real estate market. Property values have been rising, making the country an attractive option for investors.
Attractive Prices and Good Profitability
The cost of living in Colombia is significantly lower. Furthermore, the growth of tourism in the country increases the demand for rentals, especially in cities like Medellín, offering investors rental yields of 4% to 8%.
Quality of Life
Medellín provides an excellent standard of living, with quality infrastructure and a rich culture. Following a remarkable transformation in terms of safety over the last few decades, the city is now among the safest in the country.
Proximity to Brazil
For Brazilians, Colombia offers the advantage of geographic proximity. With short, direct flights between the two countries, it is easy to travel to Brazil whenever necessary, making it simple to maintain family and professional ties.
Important information before buying your property
Taxes and Fees Involved
Property Transfer Tax
Description
Real estate transfer tax.
Value
1% to 2% of the sale price.
Who pays
Buyer.
Public notary
Description
Tax on property registration in the Public Registry.
Amount
1% to 2% of the sale price.
Who pays
Buyer.
Real estate advisory
Description
Applicable to our partners' services.
Amount
3% to 6% of the sale price.
Who pays
Buyer.
Property tax
Description
Annual tax on the value of owned assets.
Amount
Between 0.4% and 1.6% of the property's taxable value.
Who pays
Owner.
Rental income tax
Description
Tax on income generated from property rentals.
Amount
0% to 39% on rental income.
Who pays
Owner.
Wealth tax
Description
Charged on corporate taxpayers, but also on the net worth of individuals.
Amount
Between 0.5% and 1.5%.
Who pays
Owner.
Capital gains tax
Description
Capital gains tax on property sales.
Value
15% of the sale value.
Who pays
Seller.
The time has come to invest in your property in Colombia!
Required Documents
- Identity document or passport: To verify the buyer's identity. Foreigners must present a valid passport.
- Public deed of sale: A document that formalizes the purchase and sale transaction, registered before a public notary.
- Property certificate: Document proving that the property is registered in the seller's name and is free of legal encumbrances.
- Property appraisal: Required to ensure the property is being sold at market value; it is also important for calculating transfer taxes and capital gains.
- Tax records and certificate of occupancy: To ensure the property is up to date with taxes and that there are no pending occupancy or usage issues.
- Tax Identification Number (NIT): For Colombian citizens or foreigners, it is necessary to register with a tax identification number for fiscal and accounting purposes.
- Proof of tax payment: Documentation required to confirm that property taxes and other fees related to the property have been paid.
- Purchase and sale agreement (pre-contract): Initial document that defines the terms agreed upon by the parties before the final deed is registered.
These are the general documents required. However, depending on the situation and the type of property, the process may vary slightly. We recommend seeking advice from a specialized lawyer or local real estate consultant to ensure the entire process complies with Colombian law.
Step-by-step guide to buying your property in Colombia
- Selection and Due Diligence: After choosing the desired property, it is essential to conduct a detailed legal check to ensure the property is free of debts, litigation, or other legal restrictions. Verify that the property has a legitimate title and that all documents are in order.
- Offer and Purchase Agreement: Once you have found the ideal property, a formal offer is made to the seller. If the offer is accepted, a purchase agreement is drafted. This contract details the agreed-upon terms, the purchase price, and other transaction clauses.
- Property Registration: Once the contract is signed and funds have been transferred, the property must be recorded in the Public Property Registry. This formalizes the transaction and secures the title in the buyer's name.
- Tax Payments: In Colombia, property transfer taxes range from 1% to 1.5% of the sale price. There is also an annual property tax, which ranges from 0.4% to 1.6% of the property's taxable value. Additionally, the capital gains tax on the sale of property is 10% of the profit earned.
By following these steps, you ensure a secure purchase that complies with Colombian regulations.
Is property in Colombia the right choice for me?
Purchasing property in Colombia can be an excellent choice. The country has an expanding real estate market with affordable taxes and a growing economic environment. With a stable economy and increasing demand for property, investing in Colombia offers good opportunities for appreciation and profitability. Its proximity to the United States and Brazil, along with a lower cost of living compared to many other Latin American countries, makes Colombia a promising destination for investors.
We Recommend Buying Property in Colombia For:
- Investors seeking profitability and appreciation: Colombia has a growing real estate market, with areas like Bogotá, Medellín, and Cartagena showing strong appreciation in recent years. Rentals can generate an average return of between 4% and 8% per year, depending on the location.
- People looking to reduce taxes: With relatively low property taxes (between 0.4% and 1.6% per year on the taxable value of the property), Colombia is an excellent option for those looking to optimize their tax burden.
- Brazilians looking for a Plan B abroad: The geographical proximity to Brazil, the ease for Brazilians to settle in the country, and the lower cost of living make Colombia a great option for those seeking asset diversification and quality of life.
- Those seeking more freedom and security: Colombia has invested heavily in security and infrastructure over the last few decades, in addition to offering good education and healthcare options. The real estate market is growing and can be an excellent choice for those who want more freedom and stability.
We Do Not Recommend Buying Property in Colombia For:
- Those seeking quick returns and real estate speculation: Although the market is growing, appreciation in Colombia tends to be gradual, with a focus on the long term.
- Those who prefer investing in more renowned markets: While Colombia offers good opportunities, the country does not yet have the same level of international recognition as markets like the US or Europe.
Frequently Asked Questions (FAQ)
There is only one limitation regarding the purchase of large tracts of land in rural areas near international borders, where the purchase may be subject to detailed review and government authorization.
Yes! Foreigners can finance property purchases in Colombia, though the process can be more complex than it is for Colombian citizens. Local banks may offer financing, but the loan amount and terms will vary based on the buyer's profile, potentially requiring additional collateral or higher interest rates.
The purchasing process follows these steps:
- Property selection and price negotiation.
- Signing the purchase agreement and paying the deposit.
- Legal due diligence, verifying the property's legal status, debts, and restrictions.
- Property registration at the local land registry office to formalize the transaction.
- Payment of taxes and fees associated with the property transfer.
To ensure a secure purchase, you will need to provide:
- For foreign buyers: Valid passport or ID, and proof of source of funds.
- For the property: Public deed, certificate of ownership, and tax clearance certificate.
- For the transaction: Purchase agreement and deed registration.
Yes! Colombia has an active rental market, especially in cities like Bogotá, Medellín, and Cartagena. Returns can range between 4% and 8% per year, depending on the location and property type.
Yes, Colombia imposes an inheritance tax. The rate varies depending on the value of the inheritance and the relationship between the heir and the deceased. In general, rates are moderate compared to other countries.
While not mandatory, working with a specialized consultant simplifies the process, ensuring the transaction is legal and secure. A consultant can assist with drafting the contract, conducting title searches, and ensuring all taxes and fees are paid correctly.
Yes, we can issue an invoice for our services. Please contact us and provide your billing address so we can prepare the necessary documentation.