Parra Rodríguez Abogados S.A.S.
Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?
In principle, any foreign individual or legal entity is entitled to own or occupy real estate in Colombia.
Yet, no foreign individual or legal entity has the right to own vacant real estate adjacent to Colombian shores and borders adjudicated by the Colombian State after 1940.
Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?
Under Colombian Legislation, there are no restrictions on lending for the purchase of real estate by foreign individuals or legal entities.
Yet, all foreign individuals or legal entities must comply with the policies for prevention of money laundering, the financing of terrorism and the financing of mass destruction weapons set forth by Colombian financial institutions.
Buying
Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.
The fees and cost relating to buying real estate in Colombia are:
- Notary Fees for the execution of the public deed, usually 0.3% to 0.5% of the price of the asset.
- Registry Tax of 1% of the price of the asset.
- Registry fee that may range from 1% to 2% of the price of the asset.
- Stamp Duty that may range from 1.5% to 3% of the price of the asset, only if that price exceeds 20,000 UVT (Tax Value Unit).
Please note that the value of UVT is set annually by Colombian Tax Authority.
Owning
Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner
The owner of real estate in Colombia is under the obligation to pay an annual real estate tax that varies considering the location and value of the asset.
A municipality can set temporary contributions on the surplus on real estate to finance public infrastructure projects that may benefit the asset.
Those taxes can be contractually assumed by a third party, yet the owner of the asset remains the liable person before the municipality.
Tax Breaks
Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so, what are they?
There are no tax breaks or other incentives for foreign individuals or legal entities to buy real estate in Colombia.
How is the ownership of Real Estate evidenced in your jurisdiction?
In Colombia real estate is transferred with the execution of a public deed of sale before a public notary.
The public deed is filed at the Office for the Registry of Public Instruments that has jurisdiction according to the location of the asset.
Said public office issues certificates of ownership and liens that identify the current and prior owners of the asset.
Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?
In Colombia the identity of real estate owners is always publicly available.
In fact, any individual or legal entity can purchase the certificate of ownership and liens from the competent Office for the Registry of Public Instruments.