Buying basics
There are no purchase restrictions on foreigners, meaning that it is relatively easy for an expat to buy property in Colombia. It is debated in Colombia if it is essential to use a lawyer, Francy Adriana González Torres, a lawyer with the firm González & González, strongly recommends that foreign buyers hire a lawyer. “I wouldn’t recommend, not in a million years, a person from the States buying a property on their own.”
Ms. Gonzáles explained that properties can have hidden complications, such as old debts or a questionable history of ownership. “If you get a house with some type of inconvenience,” she said, “it’s a long process in our courts to fix that. It’s better to check everything from the very beginning.”
However, Mr. Miller, the agency owner, believes a lawyer is not necessary so long as there is a recent certificate stating the property has no debts, “as long as the agent they acquire is professional and adept in the nuances of finalizing the sale.”
Steps for buying a property
Global Property Guide recommends following a series of steps listed below as a guide to buying property. This can be viewed fully here .
Step 1 – Obtain a certificate or Certificado de Tradición about the history of the property for COP$7,000 (US$2.98) from the Registry Office.
Step 2 – Your lawyer will study the property titles, which takes around 5 days to complete and costs around COP$1,000,000 (US$425.17). A certificate from the municipality should be obtained certifying that all municipal taxes on the property have been paid (Paz y Salvo Predial and Paz y Salvo de Valorizacion.)
Step 3 – A preliminary deed or “Minuta” is prepared by the lawyer.
Step 4 – The notary prepares the public deed. The participation of the notary in the preparation of this public deed is mandatory and his fees are 0.25% of property value. Moreover, the notary will also keep 1% of the value of the transaction from the seller as an advance payment to be applied to the Income Tax (Retencion en la fuente).
Step 5 – The Public Deed must be registered at the Registry Office. The Registry Tax (Impuesto de Registro) is paid. After registration, the new public deed is automatically sent to the Office of the Cadastre to register the change of ownership.
These steps can be completed in around 23 days. Sales Tax, or Value Added Tax (VAT), is applicable to provision of services and the rate is 16%. However, if you are renting your property for housing, VAT is excluded.
Mortgages
Property loans from Colombian banks are difficult to get as most banks do not issue mortgages to foreigners. However, as with many things in Colombia, it can be a case of who you know.
To even get close to obtaining a mortgage you will need a Colombian bank account with at least 6 months history. See our Money section for more information on opening a bank account.
International banks in Colombia such as Citibank and HSBC will have more experience dealing with expats.
Local banks will evaluate your application on some or all of the following criteria:
- If you are married to a Colombian national
- If you have been living in Colombia for more than 6 months
- Whether you plan to buy to live in the property, not as a second home
- If you already have a Colombian bank account or a history with the bank