How to buy real state
Per Colombia’s real estate regime, acquiring a property generally begins with the signing of a promise of sale and is finalized with the respective purchase agreement, where the seller is obligated to transfer the right of ownership. This contract must be formalized as a public deed at a notary public’s office, where the following documents will be requested:
- Authenticated copy of the property tax for the year in which the deed is formalized, which must be duly paid.
- Original certificate stating that taxes on the increased value of the property are paid, issued by the Urban Development Institute (IDU, as per its Spanish acronym).
- Original certificate of good standing from the building association if the property is subject to the horizontal property regime.
- Proof of payment of the national consumption tax when applicable.
Once the public deed is available, it must be registered at the Public Registry Office to validate the sale and update the ownership of the asset. The acquisition of the real property ends with its formal delivery.
Costs associated with the transaction will differ based on the value of the property to be acquired. The following is the list of costs for a real estate sale:
- Notary fees: The seller and the buyer pay in equal parts.
- Withholding tax: Paid by the seller (1% of the property value).
- Registration tax: The seller and the buyer pay in equal parts (1.67% of the property value).
- Certificate of Delivery and Unencumbered Property: Paid by the seller.
- Registration right: Paid by the buyer (0.5% of the business value).