Colombia Forum

fecherklyn
Joined 2015
Posts: 1382

5 years ago

Property Sales in Colombia

5 years ago

Although most forum members in Colombia live in rented property, some, like me, have preferred to own our own residence. Unfortunately, the process of buying property in Colombia is complex and excessively bureaucratic, especially for foreigners with limited command of Spanish. In this context, I have just received this bulletin from my legal adviser in Colombia and I thought it may be of interest to existing owners, or those investigating that idea. In a word, the process is becoming increasingly controlled by the Colombian Government and the need to use reliable real estate agents and legal advisers is now essential. I can recommend the legal firm who prepared this bulletin, all the more so because of their native English language command and professional qualifications.

PROPERTY SALES IN COLOMBIA (February 2019)

RECENT TAX REFORMS

On 28 December 2018, the Colombian Congress approved tax reforms intended to collect COP $7.5 billion to cover the fiscal deficit for 2019. Together with modifications to government expenditure this forms part of the COP $14 billion needed to guarantee the public finances and to support the social programs of the new President Duque.

Law 1943 of 2018 amends Article 90 of the Estatuto Tributario (the Tax Law) to address the tendency in Colombia to avoid the payment of taxes on commercial transactions, permitted by weak controls that allowed the parties to register a contractual price lower than the commercially agreed one. As legal advisors, we applaud this long-expected change that protects both parties to a transaction and facilitates the fulfillment of strict foreign investment laws.

With these changes to tax law it seems logical that the tax authorities will follow through with increased enforcement and fines for those who persist in declaring false statements in their commercial acts. The new obligations on public notaries should influence a change in culture in the way in which property transactions are done in Colombia.

What is new?

* Parties must declare under oath that they are declaring the full price in the Public Deed and that no other value has been separately agreed for the property.

* Refusal to make such a declaration will see the costs and taxes calculated on an amount equal to 4 x the declared value.

* Notaries will now have a duty to report to tax authorities transactions that do not include this declaration.

* An agreed price will ‘differ notably’ from the average commercial price where it differs by more than 15% (previously this was 25%).

* All payments connected to the sale/purchase transaction but agreed separately are consider part of the value of the transaction.

* Payments not made through financial institutions will be disregarded.

* The sale of a property worth more than COP $918.704.000 attracts an additional tax of 2% of the sale price, payable by the seller.

Source: Robledo & Higgs SAS is a Colombian law firm specializing in legal advice for foreigners. We are committed to helping our clients make informed decisions. For a complimentary consultation please visit www.robledohiggs.com, or contact us at [email protected]

GeoBlue

Top-quality coverage for people who live, work, study and travel internationally.
Get Quote

GeoBlue

Top-quality coverage for people who live, work, study and travel internationally.
Get Quote

Living in Colombia Guide

Expats in Colombia discuss the pros and cons of living in Colombia. From the Colombian people to driving to taxes and more. As challenging as it can be, expats in Colombia clearly find that there is a lot to love about a country that is a surprising expat hot spot.

Colombia Forum
Join our Colombia forum to meet other expats and talk about living in Colombia.

Contribute
Help other expats and newcomers by answering questions about the challenges and adventures of living in Colombia.

Best Places to Live in Colombia

If you're considering a move to Colombia, here are the 15 Best Places to Live in Colombia in 2023.

Healthcare in Colombia

Our guide to healthcare in Colombia covers public and private healthcare in Colombia, hospitals, vaccinations, prescription medications and more.

Cost of Living in Colombia

Expats offer insight into the cost of living in Colombia.

Moving to Colombia Guide

With its bustling cities, beautiful beaches and friendly Colombians, Colombia is an increasingly popular destination for expats of all ages. Expats in Colombia offer insightful tips for those moving to Colombia.

Real Estate in Colombia

Real estate listings in popular cities and towns in Colombia.

Pros & Cons of Living in Colombia

Take off your rose-colored glasses and learn what expats have to say about the biggest challenges and the greatest rewards of living in Colombia.

Retiring in Colombia

Advice for people retiring in Colombia.

10 Tips for Living in Colombia

If you've recently arrived in Colombia, here are 10 tips for digital nomads living in Colombia.

Additional Information:

Visit our Colombia Index for a Full List

GeoBlue

Top-quality coverage for people who live, work, study and travel internationally.
Get Quote

GeoBlue

Top-quality coverage for people who live, work, study and travel internationally.
Get Quote

Contribute
Help others in Colombia by answering questions about the challenges and adventures of living in Colombia.