Colombia – Property Taxes

What taxes and fees apply when buying a property in Colombia?

Completing a property purchase in Colombia brings with it a number of compulsory costs at the point of transaction. Mandatory charges invariably include notary deed expenses (the escritura pública), registration fees required to transfer legal title, and local or departmental charges collected during the registration process. Unlike countries such as the UK — where a single national Stamp Duty Land Tax applies — or Australia — where state-level transfer duty is charged — Colombia has no unified national stamp duty. What buyers commonly refer to as stamp duty is in reality a combination of departmental and municipal stamps (estampillas) and other locally authorised levies that appear on notary and registration invoices. Always request an itemised breakdown from the notary before signing any deed.

Registration fee (Impuesto de Registro): Every property acquisition must be registered, and a fee of 1% of the sale price or cadastral value — whichever figure is greater — is payable exclusively by the buyer. This sum is remitted directly to the Oficina de Registro de Instrumentos Públicos and is an unavoidable prerequisite for establishing legal ownership. Registration confirms your title in the public records system and is required for all real estate transactions in Colombia. Without it, a purchase has no legal validity.

Notary fees (Gastos Notariales): Notary charges fall in the range of 0.54%–0.70% of the transaction value and are conventionally divided equally between the two parties. These fees cover the preparation and execution of the public deed (escritura pública) through which ownership formally passes from vendor to purchaser. The precise amount follows a government-regulated formula issued by the Superintendencia de Notariado y Registro; always confirm the applicable figure directly with the relevant notary office before proceeding.

Stamp tax (Impuesto de Timbre): The Impuesto de Timbre was reintroduced in February 2025 having been abolished for most transactions in 2024. Properties valued above 20,000 UVT (COP 995,980,000) now attract a 1.5% charge, while amounts exceeding 50,000 UVT (COP 2,489,950,000) are subject to 3% on the portion above that threshold. This is a temporary measure running until 31 December 2025 and principally affects luxury sales in Colombia’s major urban centres. Check with DIAN or your notary whether this provision has been extended or amended for 2026 and beyond.

Legal fees: Although not legally required, engaging an independent lawyer or conveyancer for contract review, commissioning title and lien certificates, arranging a professional valuation, and securing certified translation or interpreter services where necessary are all strongly advisable for buyers unfamiliar with Colombian property law. Legal representation typically adds a further 0.5%–1.0% of the transaction value.

Withholding tax at source (paid by the seller): The notary is legally obliged to withhold a percentage of the sale price as an advance payment against the seller’s final tax liability. Under Article 398 of the Tax Code, this is calculated at 1% for the first 10,000 UVT (approximately COP 498 million in 2025), while a general 2.5% rate applies to non-primary residences on the full sale amount. Although this is technically the seller’s obligation, it appears on the notary’s closing statement and buyers benefit from understanding how it works.

Worked example — typical residential purchase of COP 500,000,000 (~US$125,000, as of 2025)

In most cases, buyers should anticipate statutory closing costs of between 1.5% and 2.5% of the property value, depending on the purchase price and whether stamp tax is triggered. For properties up to around COP 900–996 million (approximately US$225,000–249,000), total costs tend to fall close to 1.97%–2% once all registration-related charges are factored in. All figures presented here are illustrative estimates only; confirm exact current charges with your notary and DIAN (Dirección de Impuestos y Aduanas Nacionales).

What taxes and fees apply when selling a property in Colombia?

The cost burden falling on sellers in Colombia is generally lighter than that borne by buyers at the transactional level, though important tax obligations arise on profitable sales that can represent a substantial sum. Capital gains tax at 15% of profit is always the seller’s responsibility.

Withholding tax (Retención en la Fuente): At the point of signing the property deed, the notary is legally required to retain a portion of the sale proceeds as an advance payment toward the seller’s ultimate tax liability. Under Article 398 of the Tax Code, this withholding is set at 1% on the first 10,000 UVT (approximately COP 498 million in 2025). For properties that do not serve as the seller’s primary home, a general 2.5% rate applies against the full sale amount. This retained amount is not a separate tax — it functions as a tax credit that can be offset when the seller files their annual income tax return.

Notary fees: Sellers contribute their 50% share of notary fees, representing approximately 0.27%–0.35% of the transaction value. The allocation of this cost between parties is negotiable and should be specified clearly in the purchase agreement.

Capital gains tax: This obligation is covered in full in the dedicated section below. Sellers should note that it is declared and settled through the annual income tax return filed with DIAN rather than directly at the notary — though withholding collected at source acts as a credit against the eventual liability.

Real estate agent commission: Agency commissions in Colombia typically fall between 3% and 6% of the transaction price, divided between the buyer’s and seller’s representatives, though structures vary considerably depending on property type and prevailing market conditions. By convention, sellers generally bear the primary agent fee, but this is always a matter for negotiation. Always establish the commission arrangement in writing before listing a property for sale.

Is capital gains tax payable on property sales in Colombia?

Yes. Colombia levies a capital gains tax — the Impuesto de Ganancias Ocasionales — on profitable property disposals. When an individual sells real estate in Colombia, the transaction may produce a taxable capital gain subject to certain conditions. For the gain to be treated as a capital gain rather than ordinary income, the property must have been held as a fixed asset for a minimum of two years. This two-year ownership threshold serves a comparable purpose to holding-period requirements in other jurisdictions, though Colombia’s flat 15% rate is notably more favourable than the income tax rates that can apply to short-term gains in many countries.

The rate and how the gain is calculated: The taxable gain is arrived at by deducting the adjusted fiscal cost from the actual sale price: Tax Due = (Sale Price − Adjusted Cost) × 15%. The adjusted cost comprises the original purchase price, any recognised improvements, and inflation adjustments calculated using Consumer Price Index movements since the date of acquisition. This inflation-adjustment mechanism can substantially reduce the taxable gain relative to the raw difference between purchase and sale prices, particularly where a property has been held for many years.

Primary residence exemption: Article 311-1 of the Tax Code provides an exemption of up to 5,000 UVT (approximately COP 249 million in 2025) where you sell your main home and reinvest the proceeds in another property or apply them to paying off your mortgage. Three key conditions apply: the property disposed of must be your principal residence; the reinvestment must occur within two years of the sale; and the exemption is applied against the net gain rather than the total sale value.

Rules for non-residents: Capital gains tax obligations apply to all property owners irrespective of their residency status. Non-resident sellers with Colombian-source income are fully liable in Colombia for that income. Double taxation avoidance agreements signed with countries including Spain, France, Canada, Chile, Mexico, and Switzerland may affect the overall liability by providing tax credit mechanisms or partial and full exemptions under their bilateral terms. Always verify treaty coverage with a qualified Colombian tax adviser and the relevant authority in your home country.

Practical example: Suppose an apartment in Medellín was acquired in 2016 for COP 250,000,000 and sold in 2025 for COP 600,000,000, with COP 20,000,000 spent on recognised improvements. The adjusted fiscal cost would be COP 270,000,000 (noting that the fiscal cost may also be adjusted annually by a government-prescribed percentage). The taxable gain would therefore be approximately COP 330,000,000, generating a capital gains tax liability at 15% of approximately COP 49,500,000 — before applying any available exemption and before deducting any withholding already collected at the notary. These numbers are illustrative only; consult DIAN or a certified Colombian tax accountant regarding your specific position.

Are there annual property taxes in Colombia?

Yes. All property owners in Colombia must pay an annual municipal property tax. This recurring charge is known as the Impuesto Predial Unificado — or simply the predial — and is an annual levy applied to all real property situated within Colombian territory. It affects Colombian nationals and foreign owners equally. Administration and collection rest with individual municipalities, which means that rates, assessment methods, and payment procedures differ from one locality to the next.

How it is calculated: The tax is computed by multiplying the municipality’s applicable rate by the cadastral value (valor catastral) of the property — the officially assessed figure maintained in the national cadastral registry. Rates vary according to municipality, property type, and land use classification, and generally range from around 0.3% to 3.3% of the cadastral value per year. The cadastral value is frequently lower than the open-market value of a property, most noticeably in rural areas. This distinguishes Colombia from countries such as Ireland, where local property tax is based on market value bands, or France, where the taxe foncière is derived from a rental value estimate.

Cadastral value updates: The avalúo catastral is the official value attributed to a property for administrative and tax purposes. Because it forms the basis on which the property tax is calculated, any revision to this figure directly influences the amount due each year. Values are updated periodically and adjusted annually in line with economic indicators such as inflation and the Property Valuation Index (IVP). Under Decree 1609 of 2024, property tax assessments rose by 3% for most Colombian properties for the 2025 tax year.

Who is liable: The Impuesto Predial Unificado is payable by whoever appears as the registered owner of the property, whether that person is a Colombian resident, a foreign national, an individual, or a corporate entity. Expatriates face the same rates as local owners but must ensure they meet declaration and payment obligations on time.

Typical amounts and discounts: On a residential property with a cadastral value of COP 300,000,000, applying a mid-range predial rate of around 0.8% would produce an annual bill of approximately COP 2,400,000 (roughly US$600). Many municipalities offer a discount of between 5% and 15% to owners who pay before the published deadline. In 2025, Bogotá set its early payment deadline at 17 March and Medellín at 12 April. Always check the deadline in your specific municipality to take advantage of any available discount.

Betterment levy (Contribución por Valorización): The Contribución por Valorización is an occasional charge that arises when a municipality undertakes public infrastructure projects that increase the value of nearby properties. Unlike the annual predial, this levy is triggered on a project-by-project basis and is applied only to those properties that benefit from the relevant works, regardless of whether the owner supported or requested the improvements.

For current rates and payment instructions, consult your municipal treasury (Secretaría de Hacienda) or the national cadastral authority, the Instituto Geográfico Agustín Codazzi (IGAC).

How is rental income from property taxed in Colombia?

Rental income derived from Colombian property is subject to Colombian tax regardless of whether the landlord resides in the country. Revenue from leasing real estate is classified as ordinary income and is taxed at rates reaching up to 39%. While this top marginal rate is comparable to that applied in many European countries, Colombia’s relatively generous threshold before the highest bracket applies means that landlords operating on a modest scale frequently pay considerably less.

Withholding tax at source: A 3.5% withholding tax is levied on rental income as an advance payment against the landlord’s ultimate income tax liability. This withheld amount can be credited against the total tax due when the annual return is filed. In practice, where a corporate tenant is involved, this portion of tax is deducted automatically before the landlord receives the net rent.

Deductible expenses: Taxable rental income is arrived at after subtracting qualifying costs — such as administrative charges, insurance premiums, letting agent fees, taxes paid, maintenance, and repairs — from gross rental receipts. The annual impuesto predial is also deductible from rental income for individual income tax purposes, offering a partial offset against the recurring cost of ownership. Maintaining thorough records of all eligible expenditure is essential for minimising the tax payable.

Residents versus non-residents: Colombian tax residents are assessed on their worldwide income at progressive rates up to 39%, against which all permissible deductions and the 3.5% withholding credit may be applied. Non-residents are taxed only on income with a Colombian source, and different rates may apply — consult DIAN or a locally qualified tax adviser to confirm the withholding rates applicable to your particular situation. Where a double taxation treaty is in force, it may reduce or eliminate Colombian tax on rental income received by nationals of treaty countries.

Short-term rentals (Airbnb and similar platforms): Landlords earning income through short-term rental platforms may also be subject to the Impuesto de Industria y Comercio (ICA), a municipal commercial activity tax calculated on gross income at rates that vary by city and sector. Colombian tax authorities increasingly regard short-term platform-based letting as a commercial enterprise, which can trigger ICA obligations in addition to standard income tax requirements. Given the evolving regulatory landscape, specialist advice is recommended for anyone operating in this space. All rental landlords must register with DIAN and hold a NIT (tax identification number) if they have not already done so.

Does inheritance tax apply to property in Colombia?

Colombia does not operate a dedicated inheritance tax in the manner of France, the UK, or Ireland — there is no separate levy payable on an estate before assets pass to heirs. Rather than imposing a bespoke inheritance charge, Colombia treats inherited property as extraordinary income received by the heir, who consequently becomes liable to capital gains tax.

How the gain is calculated on inheritance: When property is inherited, the recipient takes it on at the fiscal cost declared in the estate. Should the heir later choose to sell, capital gains tax at 15% applies to any appreciation above that inherited fiscal cost. The gain arising at the point of inheritance itself is generally treated as an extraordinary gain (ganancia ocasional) for the heir and is taxed at the flat 15% CGT rate rather than at ordinary income tax rates. The taxable base is determined by the declared estate value, which must be no less than the cadastral value. A Colombian notario or tax adviser should be consulted for precise calculation rules applicable to your individual circumstances.

Non-residents and foreign heirs: The same tax obligations apply to all property owners — and therefore to all heirs inheriting Colombian real estate — regardless of where they live. A non-resident heir acquiring Colombian property through inheritance must file the appropriate return with DIAN and may be required to settle the applicable capital gains tax. Colombia has concluded double taxation avoidance agreements with several countries, including France, Spain, Canada, Switzerland, Chile, and Mexico, which may prevent the same income from being taxed twice through credit mechanisms or bilateral exemptions. Whether a specific treaty applies to a given inheritance depends on the treaty’s terms and the countries involved; professional advice is strongly recommended in all cases.

Does gift tax apply to property transfers in Colombia?

As with inherited property, Colombia imposes no standalone gift tax. There is no gift-specific levy as such; instead, gifts are characterised as extraordinary income for the recipient, who becomes liable to capital gains tax. A property transferred as a gift during the donor’s lifetime therefore constitutes a capital gains event for the recipient — the gifted asset is treated as having been received at a declared value that will subsequently form the fiscal cost base if the recipient eventually sells.

Rates and thresholds: The 15% capital gains tax rate applies to gift transfers of property, calculated on the excess of the declared transfer value over the donor’s original fiscal cost — or, where no consideration passes, on the value declared in the deed compared to the fiscal cost. Notary fees and registration costs apply to gift transactions in the same way as to commercial sales, since a public deed must still be executed and registered with the Oficina de Registro de Instrumentos Públicos.

Relationship-based exemptions: Colombian law does not currently extend broad family-based gift tax exemptions of the kind available in some other countries. The same 15% capital gains treatment applies regardless of whether the property is gifted to a spouse, a child, or an unrelated individual. Where a gift forms part of a matrimonial arrangement between spouses, specific rules may come into play — a qualified Colombian notario or tax adviser should be consulted before proceeding. Always verify the current position with DIAN or a locally registered tax professional.

Are there any tax advantages or incentives for buying property in Colombia?

Colombia’s property tax framework incorporates several reliefs and mechanisms capable of reducing the overall tax burden for owners, investors, and in limited circumstances buyers. That said, the country does not provide a single nationwide first-time buyer exemption at the point of purchase. The principal ways to manage acquisition costs are to negotiate which party bears each closing charge, to select a property location with lower municipal levies, and to avoid paying buyer-side agency fees where possible.

Primary residence CGT relief: The most significant relief available to owner-occupiers is the capital gains tax exemption on the sale of a primary home. Article 311-1 of the Tax Code grants an exemption of up to 5,000 UVT (approximately COP 249 million in 2025) where the sale proceeds are reinvested in a replacement home or used to discharge an existing mortgage. This reinvestment condition broadly resembles the rollover relief mechanisms found in other tax systems.

Inflation adjustment on fiscal cost: The adjusted cost used for capital gains purposes incorporates the original purchase price, eligible improvements, and Consumer Price Index-based inflation adjustments accumulated since acquisition. For long-held properties, this mechanism can meaningfully reduce the taxable gain.

Deductibility of predial for landlords: The annual property tax is deductible from rental income for individual income tax purposes, providing a partial offset against the ongoing cost of holding a rental property.

Early payment discounts on predial: Various municipalities offer discounts of between 5% and 15% to owners who settle their annual property tax bill before the local deadline. Some cities also provide reduced rates for retirees or elderly residents under defined conditions. This straightforward measure represents an easy way to reduce recurring costs without any complex planning.

No VAT on residential resale property: Under the general rule confirmed in DIAN doctrine, residential property sales — whether new-build or resale — do not attract VAT. This contrasts with certain other countries where newly constructed properties carry a consumption tax not applicable to second-hand transactions, meaning buyers in Colombia face no such distinction.

Wealth tax threshold: A wealth tax at a rate of 1.5% applies for 2023, 2024, 2025, and 2026. It is triggered when net worth exceeds COP 3,388,680,000 as of 1 January 2025. The majority of individual property investors will remain below this threshold, but high-net-worth individuals holding multiple Colombian properties should monitor the position carefully — particularly given that for fiscal year 2026, the government has announced plans to lower the threshold and raise rates to as high as 5%, though as of January 2026 this measure remains under review by the Constitutional Court.

Do different rules apply to foreign buyers or non-residents purchasing property in Colombia?

Colombia maintains a broadly open stance toward foreign property ownership and does not impose nationality-based restrictions or surcharges on residential real estate acquisitions. All property owners — regardless of residency — are subject to the same tax rates. Nevertheless, there are several meaningful practical differences in how transactions unfold for purchasers arriving from outside Colombia.

No ownership restrictions for foreigners: Foreign nationals may buy, hold, sell, and let property in Colombia on substantially the same terms as Colombian citizens. There are no caps on the proportion of a development that can be sold to overseas buyers, nor is government approval required for residential acquisitions.

Additional documentation requirements: While engaging an independent lawyer, obtaining title and lien certificates, and arranging certified translation or interpreter services remain optional, they are strongly advisable for foreign buyers. Non-resident purchasers also face additional withholding and document authentication requirements. All parties to a property deed must be satisfactorily identified to the notary, which for non-residents typically means presenting a valid passport and, where applicable, a Colombian visa or residency permit reference number.

NIT (tax identification number): A NIT is an obligatory prerequisite for any tax-related procedure in Colombia. Foreign buyers must obtain one from DIAN before concluding a property purchase. Applications are generally submitted in person at a DIAN office within Colombia and require a valid passport. This is analogous to obtaining a tax file number in Australia or a PPS number in Ireland before engaging in certain regulated financial transactions.

Capital repatriation: Colombia generally permits the repatriation of capital originally invested in real estate, provided the investment was correctly registered with the Banco de la República in accordance with foreign investment regulations at the time of purchase. Failure to complete this registration properly can create complications when attempting to repatriate sale proceeds at a later date. Legal advice should be sought before finalising any purchase to ensure full compliance.

Non-resident income tax: Non-residents earning rental income from Colombian property are taxed on that Colombian-source income within Colombia. The withholding rates applicable to non-residents may differ from those that apply to residents. Consult DIAN or a qualified Colombian tax adviser to establish the current non-resident withholding rates relevant to your situation. The most up-to-date guidance on non-resident obligations is available on the official DIAN website.

How do I complete a property purchase in Colombia? Step-by-step process

The steps below outline the standard procedure for acquiring residential property in Colombia. All stages should be carried out with the assistance of a qualified Colombian lawyer and a registered notary (notario).

1. Obtain a NIT (Tax Identification Number) from DIAN. Foreign buyers must register with DIAN to obtain a NIT before completing a property transaction. This registration is mandatory for all tax-related procedures in Colombia.
2. Agree on the purchase price and sign a preliminary agreement (promesa de compraventa). This legally binding pre-sale contract records the agreed price, payment schedule, and any conditions precedent. A deposit is customarily paid at this stage. Always have your lawyer review the document before signing.
3. Conduct due diligence. Request a paz y salvo predial — a certificate confirming that the property tax account is up to date — from the relevant municipal tax office as a standard part of the closing process. Also commission a title search (certificado de tradición y libertad) from the Registro de Instrumentos Públicos to verify the ownership history and identify any encumbrances.
4. Arrange funds and foreign exchange compliance. Where funds originate from abroad, ensure that the transfer is properly documented and registered with the Banco de la República where required to preserve the right to repatriate capital in the future.
5. Attend the notary to sign the public deed (escritura pública). Buyer and seller — or their duly authorised representatives — appear before a Colombian notary. The notary confirms the identity of all parties, reads the deed aloud, and collects all closing costs, including registration fees, notary charges, and any applicable stamp tax. Full funds must be available before the closing appointment because the notary must verify payment prior to executing and registering the deed.
6. Pay all closing costs at the notary. Notary fees and departmental taxes are generally shared equally between the parties. The registration tax and stamp tax are the buyer’s sole responsibility. Withholding tax is the seller’s sole responsibility.
7. Register the deed at the Oficina de Registro de Instrumentos Públicos. The notary typically arranges submission of the deed for registration. This step is mandatory for all real estate transactions in Colombia and constitutes legal proof of ownership. A purchase that has not been registered carries no legal standing.
8. Update the cadastral record and begin paying the predial. Once registration is complete, notify the appropriate municipal cadastral authority of the change in ownership so that future predial invoices are directed to you. Set reminders for annual payment deadlines to ensure you benefit from any early payment discount on offer.

Frequently asked questions about property taxes in Colombia

Do I need to pay Colombian property taxes if I live abroad and only own a holiday home in Colombia?

Yes. The Impuesto Predial Unificado applies equally to Colombian nationals and foreign property owners, irrespective of where they reside. You are liable for annual predial payments whether you live in Colombia or not. Unpaid amounts accrue interest penalties and can eventually result in a lien being placed on the property. Consider establishing a local payment arrangement or authorising a representative in Colombia to manage your annual obligations on your behalf.

Is there VAT to pay on buying a property in Colombia?

Under the general rule confirmed in DIAN doctrine, residential property sales — whether for new-build or resale transactions — do not attract VAT. However, commercial property purchases and certain developer-led sales may be structured differently, so always confirm with your notary and DIAN whether VAT applies to the specific transaction you are contemplating.

How is the cadastral value of my property determined, and can I challenge it?

The avalúo catastral is the official value assigned to a property for tax and administrative purposes, and it serves as the foundation for calculating the impuesto predial. Any revision to this figure therefore has a direct bearing on how much you pay each year. If you consider your property to have been overvalued in a way that materially affects your tax liability, you may apply for a reassessment from the Agustín Codazzi Geographic Institute (IGAC) or your local cadastral authority.

Does Colombia have a wealth tax that could affect my property ownership?

A wealth tax is triggered when your net worth exceeds COP 3,388,680,000 as of 1 January 2025. A rate of 1.5% applies for 2023–2026; for fiscal year 2026, the government has indicated plans to lower the filing threshold and increase rates to as high as 5%, though as of January 2026 this measure remains subject to review by the Constitutional Court. Track developments closely and take professional advice if your Colombian property holdings are approaching or above this threshold.

What happens to property taxes when I inherit Colombian real estate?

Colombia has no standalone inheritance tax. Instead, inherited property is treated as extraordinary income, making the heir liable to capital gains tax on the gain. The heir must also register the property in their name and assume responsibility for the annual predial from that point forward. A Colombian tax adviser should be consulted to work through the calculation of capital gains liability on inherited property in detail.

Can I deduct mortgage interest on Colombian property from my taxes?

Colombian tax residents may in certain circumstances be able to deduct mortgage interest on their principal home from taxable income, subject to conditions set by DIAN. This deduction is not generally available for investment properties. Applicable thresholds and qualifying conditions are revised through annual tax regulations; confirm the current rules with a Colombian accountant or through the DIAN website.

Are there any special tax rules for new-build properties in Colombia?

For residential transactions, there is no significant tax difference between purchasing a new-build and a resale property, since home sales do not generate VAT under general DIAN doctrine. However, if you proceed with construction or substantial renovation of a plot, the Impuesto de Delineación Urbana (Building Permit Tax) — levied at 1%–1.7% of construction cost — may apply. Verify the relevant requirements with the appropriate municipal planning authority before commencing any works.

Where can I find official information on property taxes in Colombia?

The principal national tax authority is DIAN (Dirección de Impuestos y Aduanas Nacionales), which publishes official guidance on capital gains tax, income tax, and wealth tax. For the annual predial, contact your municipal Secretaría de Hacienda or consult the IGAC (Instituto Geográfico Agustín Codazzi) website for cadastral information. For registration matters, the Superintendencia de Notariado y Registro is the relevant authority. Always verify specific rates, thresholds, and payment deadlines directly with these bodies or a locally qualified tax professional, as Colombia’s tax framework is revised annually.