How to Invest in Real Estate in Colombia

To purchase a real estate property in Colombia you for the most part need to begin with the execution of a purchase promise which is then finished with a purchase agreement.

By along these lines, the dealer consents to move the property rights. This understanding must be executed by methods for an public deed at a Notary Public's office. So as to do as such, the accompanying archives are required:

Authentic copy of the real estate tax paid on the year of the purchase of the real property.

Unique examination great standing authentication gave by the Urban Development Institute (Instituto de Desarrollo Urbano - IDU).

Unique mortgage holder affiliation expenses - "HOA charge" – great standing endorsement if the genuine property is dependent upon an apartment suite system.

 Proof of payment of the national consumption tax when applicable.

Property rights over real estate must be transferred by means of the registration of the acquisition title in the Public Instruments Registry Office (Oficina de Registro de Instrumentos Públicos). The purchase of the real property ends with the formal delivery of the good..

The costs identified with the procedure rely upon the cost of the great gained. The rundown of the expenses for the acquisition of a genuine property is as per the following: 

Notary rights: paid by the seller and buyer evenly.

Withholding at source: (1% of the price of the real property).

Registry tax: paid by the seller and buyer evenly (1,67% of the price of the real property)

Retaining at source: (1% of the cost of the genuine property).

Transfer and appraisal certificates: paid by the seller.

Registry rights: paid by the buyer (0.5% of the value of the business).

National tax on the consumption of real estate: it is generated by the sale of real estate (different from rural properties destined to agricultural activities and properties destined to the execution of housing projects of social or priority interest), whose value exceeds 26,800 UVT, (approx. USD 306,145; 1USD = COP3400)

The seller is responsible for the tax. It will be collected through the withholding at the source mechanism. It must be canceled prior to the transference of the real estate.

The appropriate rate will be two percent (2%) over the whole deal cost.

WHAT DO I NEED TO PREPARE AS A BUYER?

·     How will you transfer your funds. (We do have establish a long term relationship with Allianza Valores) Alianza Valores To open an application you can do that online and onsite. So either before your visit to Colombia, during or after.

·     Passport. That’s your ID to make a real estate deal.

·     Money. That’s of course the main asset for you to make a real estate deal. And since Colombia has pretty high security to prevent money laundering we suggest you use either Alianza Valores to open up and account with them. You’ll transfer your fonds through Citi Bank in New York and from there the funds will be transfered to your account at Alianza Valores

The other option is to use one of the banks in Colombia. The documentation can be more extensive and the process longer.

·     Time. Make sure you have at least a week on site to look at properties, be acquainted with the city and have time to meet with people needed for the deal.

·     Lawyer. It’s recommended to use legal assistance for title search etc. We can help and recommend one with great experience and trust.

·     Accommodation for your visit. We can help you finding hotel or apartment for your stay.

·     Set up a corporation. If you are looking to invest into multiple properties or a project we recommend from a tax purpose to start a business in Colombia. We can assist you to get the appropriate help for this as well.

That’s it! You are good to go and start planning for your future investment dream! 

Simon Sjöberg Broker International Investment Advisor Specialist

RE/MAX Colombia, Medellin

EMAIL simon@suitemedellin.com

CELLPHONE +573216052225 OFFICE +57(4)5897860

RE/MAX Carrera 47 No. 10 Sur - 50, Medellín, Antioquia, 050022, COLOMBIA