Tax on property income in Colombia

Taxation Researcher | July 25, 2019

INDIVIDUAL TAXATION

Nonresidents are subject to income tax on all his Colombian-sourced income. Income of married couples are assessed and taxed separately.

INCOME TAX (impuesto de renta)

Income of nonresidents is taxed at a flat rate of 33%.

RENTAL INCOME
Income from leasing real property is considered as ordinary income and taxed at 33%. Rental income is subject to 3.5% withholding tax, which is considered as advance tax payment. This tax can be credited against the taxpayer´s income tax liability when he files his tax return.

Taxable rental income is computed by deducting income-generating expenses (such as administrative expenses, insurance, realtor or leasing agent fees, taxes, maintenance and repairs) from the gross rent. Property taxes are also deductible.

CAPITAL GAINS TAX
Colombia Bogota houses for saleCapital gains from selling real property held for at least two years are subject to capital gains tax at a flat rate of 10%. The taxable gain is computed by deducting the following from the selling price: acquisition costs (as revalued by the consumer price index), costs of transferring ownership, and improvement costs.

Capital gains realized from properties sold within two years of acquisition are subject to income tax at a flat rate of 33% for nonresidents.

Industry and Commerce Tax

This tax is levied on the gross income of all industrial, commercial, or service activities carried out in a given jurisdiction or municipality through a real estate property. Generally the applicable tax rates are between 0.2% and 1%, depending on the municipality and type of activity. In Santa Fe de Bogotá, this tax is levied from 0.414% to 1.38%. This can be deducted for income tax purposes.

WEALTH TAX ((impuesto al patrimonio)

Wealth tax is an annual tax imposed on individuals who exceed a certain amount of wealth. Wealth tax is levied at a flat rate of 2.4% for net wealth exceeding COP3 billion (US$1,165,049), and it is levied at a flat rate of 4.8% for net wealth exceeding COP5 billion (US$1,941,748).

WEALTH TAX 2017

TAXABLE INCOME, COP (US$)
TAX RATE
Up to 2,000,000,000 (U$677,966)    0.05%
2,000,000,000 – 3,000,000,000 (US$1,016,949) 0.10%
3,000,000,000 – 5,000,000,000 (US$1,694,915) 0.20%
Over 5,000,000,000 (US$1,694,915) 0.40%
Source: Global Property Guide

WEALTH TAX 2016

TAXABLE INCOME, COP (US$)
TAX RATE
Up to 2,000,000,000 (U$677,966) 0.15%
2,000,000,000 – 3,000,000,000 (US$1,016,949) 0.25%
3,000,000,000 - 5,000,000,000 (US$1,727,116) 0.50%
Over 5,000,000,000 (US$1,694,915) 1.00%
Source: Global Property Guide

WEALTH TAX 2015

TAXABLE INCOME, COP (US$)
TAX RATE
Up to 2,000,000,000 (U$677,966) 0.20%
2,000,000,000 – 3,000,000,000 (US$1,016,949) 0.35%
3,000,000,000 - 5,000,000,000 (US$1,727,116) 0.75%
Over 5,000,000,000 (US$1,694,915) 1.15%
Source: Global Property Guide

PROPERTY TAX


Real Estate Tax (impuesto predial unificado)

Property taxes are levied on the cadastral value of the properties as assessed by the municipalities. The rates of the unified property tax on the aggregate value of the land and buildings range between 0.10% and 3.30%.

Real estate tax paid is deductible from rental income for individual income tax purposes.

 

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