Colombia: Worked Example of Tax on Rent

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Tax Example: Rent

Non-resident couple's joint monthly rental income1		US$1,500	US$6,000	US$12,000
Annual Rental Income		18,000	72,000	144,000
Less Estimated Costs2		(2,170)3	(8,680)4	(17,362)5
Less Real Estate Tax6		(713)7	(2,850)8	(5,700)9
= Taxable Income		15,117	60,470	120,938
Income Tax Rates
Income Tax Rate10	34%	5,140	20,560	41,119
Annual Income Tax Due		US$5,140	US$20,560	US$41,201
Tax Due as % of Gross Income		28.56%	28.56%	28.55%
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DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on July 18, 2007.

Notes

¹ The property is jointly owned by husband and wife, but then taxed separately (50% upon each partner).

² These costs include the property’s insurance policy, realtor agency fees, lease and management insurance policy.

³ Break down of estimated costs are as follows: property’s insurance policy (US$100), realtor agency fees (US$1,440), lease and management insurance policy (US$630).

⁴ Break down of estimated costs are as follows: property’s insurance policy (US$400), realtor agency fees (US$5,760), lease and management insurance policy (US$2,520).

⁵ Break down of estimated costs are as follows: property’s insurance policy (US$802), realtor agency fees (US$11,520), lease and management insurance policy (US$5,040).

⁶ The residential property is jointly owned by husband and wife.

⁷ The property is estimated to cost US$150,000.

⁸ The property is estimated to cost US$600,000.

⁹ The property is estimated to cost US$1,200,000.

¹⁰ Rental income of non-resident foreigners is taxed at 34% for 2007.

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