Guide to Property Taxes in Colombia
Tax Rate on Rental Income |
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| Monthly Income | €1,500 | €6,000 | €12,000 |
| Tax Rate | 0% - 39% | 0% - 39% | 0% - 39% |
Nonresidents are subject to income tax on all their Colombian-sourced income. The income of married couples is assessed and taxed separately.
Income Tax (Impuesto de Renta)
Getting an accurate effective income tax rate in Colombia is complicated.
| Taxable income (TU *) | Marginal rate (%) | Tax liability | |
| Over | Not over | ||
| 0 | 1,090 | 0 | 0 |
| 1,090 | 1,700 | 19 | (Taxable income translated into TU less TU 1,090) x 19% |
| 1,700 | 4,100 | 28 | (Taxable income translated into TU less TU 1,700) x 28% + TU 116 |
| 4,100 | 8,670 | 33 | (Taxable income translated into TU less TU 4,100) x 33% + TU 788 |
| 8,670 | 18,970 | 35 | (Taxable income translated into TU less TU 8,670) x 35% + TU 2,296 |
| 18,970 | 31,000 | 37 | (Taxable income translated into TU less TU 18,970) x 37% + TU 5,901 |
| 31,000 | And up | 39 | (Taxable income translated into TU less TU 31,000) x 39% + TU 10,352 |
| Source: PWC | |||
"In December 2006, the Colombian government approved a reform of the Colombian tax system. Such reform incorporated the TU to measure the different limits and thresholds originally set in absolute numbers, adjusted every year by decree. The value of each TU is equivalent to 38,004 Colombian pesos (COP) for fiscal year (FY) 2022 and COP 42,412 for FY 2023." according to PricewaterhouseCoopers (PWC).
Rental Income
Income from leasing real property is considered ordinary income and taxed at 39%. Rental income is subject to a 3.5% withholding tax, which is considered an advance tax payment. This tax can be credited against the taxpayer's income tax liability when they file their 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
Capital 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 35% 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 progressive rates based on net worth:
- 0.5% on net worth exceeding COP 3 billion (USD 770,000)
- 1% on net worth exceeding COP 5 billion (USD 1.28 million)
- 1.5% on net worth exceeding COP 8 billion (USD 2.05 million)
Corporate Taxation
Income Tax (Impuesto a la Renta de las Personas Jurídicas)
Corporate income tax is levied at a flat rate of 35%. The taxable income is computed by deducting income-generating expenses from the gross income.
Buying and Selling Costs/Taxes in Colombia
| Transaction Costs | ||
| Who Pays? | ||
| Property Transfer Tax | 0.50% - 1.00% | buyer |
| Notary Fees | 0.15% | buyer |
| Legal Fees | 0.50% - 1.00% | buyer |
| Real Estate Agent Fee | 3.00% - 4.00% (+16% VAT) | seller |
| Costs paid by buyer | 1.15% - 2.15% | |
| Costs paid by seller | 3.00% - 4.00% | |
| ROUNDTRIP TRANSACTION COSTS | 4.15% - 6.15% | |
| Source: Global Property Guide | ||
Property Holding 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 0.40% and 1.20%.
Real estate tax paid is deductible from rental income for individual income tax purposes.