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, or Bogotá in 2026, here's a clear breakdown of what to expect — from closing day to your eventual sale.
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) – 4x1000
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 – ~0.27%
Colombian property transfers must be formalized before a notary. Notary fees total approximately 0.27% of the property value and are typically split 50/50 between buyer and seller. On a $200,000 property, that's around $270 USD per party.
Registration Tax (Impuesto de Registro) – ~1.67%
This is the largest single closing cost. The tax is calculated on the cadastral or transaction value (whichever is higher) and paid to register the deed. On a $200,000 property, expect around $3,340 USD.
VAT (IVA) – 19% on Luxury New-Builds
VAT applies only to new residential properties priced above ~26,800 UVT (the luxury threshold, roughly $350,000+ USD depending on the year's UVT value). Most mid-market properties are exempt. If you're buying resale or below the luxury threshold, this tax does not apply.
The predial is Colombia's municipal property tax, paid annually to the city where the property is located. Rates range from 0.3% to 1.6% of the assessed cadastral value — and the cadastral value is usually well below market value, making the effective rate even lower.
Practical example: A $150,000 USD apartment typically generates $450–$900 USD per year in predial. Compare that to a similar property in Florida ($2,500–$4,500/year) or Spain ($1,200–$2,000/year), and the savings are obvious.
Many municipalities also offer a 5%–10% discount for early payment in the first quarter.
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.
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%).
| Country | 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.
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.
Want a clear cost breakdown for a property you are considering? Speak with our buyer's agent.