Colombia continues to attract international property buyers thanks to its favorable tax structure, low ownership costs, and one of the lowest capital gains rates in Latin America. If you're considering an investment in Medellín, Cartagena, Santa Marta, or Barranquilla in 2026, here's a clear breakdown of what to expect — from closing day to your eventual sale.
1. Purchase Transaction Taxes
When you buy property in Colombia, several one-time taxes and fees apply at closing. Budget roughly 3%–5% of the purchase price for total transaction costs.
GMF (Gravamen a los Movimientos Financieros) – 4×1000
This is a 0.4% tax on bank transfers above certain thresholds. When you wire funds into Colombia to complete your purchase, expect this small charge to apply. On a $200,000 USD transfer, GMF would equal roughly $800 USD.
Notary fees (Derechos de Notaría)
Colombian law sets notary fees at approximately 0.27% of the declared value, split equally between buyer and seller. On a $200,000 property your share is around $270 USD — very low by international standards.
Registration tax (Impuesto de Registro)
This is levied by the department (state) and typically falls between 0.5% and 1% of the property value. In Bolívar (Cartagena) and Magdalena (Santa Marta), the current rate is 1%.
VAT (IVA) on new-build properties
If buying directly from a developer, VAT at 19% applies to the portion of the price above 26,800 UVT (roughly COP $1.4 billion / ~$330,000 USD in 2026). Most mid-market purchases are exempt.
2. Annual Property Tax (Predial Unificado)
Colombia's predial is based on the avalúo catastral — the government's cadastral valuation, which typically runs 50–70% below market value. Rates vary by municipality and property use:
- Residential properties: 0.3%–1.6% of cadastral value annually
- Commercial properties: up to 3.3% of cadastral value
- Strata 1–3 (low-income residential): generally 0.3%–0.5%
- Strata 5–6 (high-end residential): typically 0.8%–1.6%
In practice, predial on a $200,000 USD apartment at strata 5 in Cartagena typically works out to $400–$700 USD per year — very low compared to comparable markets.
Many municipalities also offer a 5%–10% discount for early payment in the first quarter.
3. Rental Income Tax for Non-Residents
If you rent out your Colombian property, non-resident landlords are subject to a flat withholding tax at source on gross rental income. Your property manager or tenant withholds the tax and remits it to the DIAN (Colombia's tax authority), simplifying compliance significantly. No complex annual filing is required for most passive landlords.
4. Capital Gains Tax on Sale
Here's where Colombia really stands out: capital gains on property held more than two years are taxed at a flat 10% on the gain — among the lowest rates in Latin America.
Example: Buy at $150,000, sell at $220,000 five years later. Your gain is $70,000, and capital gains tax owed is just $7,000 USD. Compare this to the US (up to 20% federal plus state) or Spain (19%–28%).
5. How Colombia Compares
| Country | Annual Property Tax | Capital Gains | Closing Costs |
|---|---|---|---|
| Colombia | 0.3%–1.6% | 10% flat | ~3%–5% |
| USA (FL) | 1.5%–2.5% | Up to 20%+ | ~2%–5% |
| Spain | 0.4%–1.1% | 19%–28% | ~10%–13% |
| Panama | 0%–1% | 10% | ~5%–7% |
Colombia offers some of the lowest annual carrying costs in the hemisphere, paired with a flat, predictable capital gains regime. For long-term investors, this combination is hard to beat.
Final Thoughts
Colombia's property tax system rewards buy-and-hold investors with low ownership costs, simple withholding for rental income, and a modest 10% capital gains rate on exit. Closing costs are reasonable, and most mid-market properties avoid VAT entirely.
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