Guide to Property Taxes in Colombia

Nonresident individuals are generally subject to Colombian income tax only on their Colombian-source income and capital gains, as well as Colombian tax on property located in Colombia where applicable. The income and assets of spouses are generally assessed separately for Colombian tax purposes.

Income Tax (Impuesto de Renta)

Nonresident individuals are generally subject to Colombian income tax at a flat rate of 35% on their taxable Colombian-source ordinary income. Taxable income is generally determined after applicable costs and deductions permitted under Colombian tax law. Different rates and rules may apply to certain categories of income, including dividends and capital gains. Nonresidents may also be subject to withholding tax on Colombian-source payments, and in certain circumstances withholding at source may satisfy their Colombian income tax obligation without requiring an annual income tax return.

For comparison purposes, annual gross rental income of $18,000, $72,000 and $144,000 is assumed to incur deductible expenses equal to 30% of gross rental income, leaving net taxable rental income of $12,600, $50,400 and $100,800, respectively.

Applying Colombia's standard 35% income-tax rate for a nonresident individual results in estimated annual income tax of $4,410, $17,640 and $35,280, respectively.

This represents an effective income-tax burden of approximately 24.5% of gross rental income at each income level under the standardized 30% expense assumption.

The 30% expense deduction is an illustrative assumption used for international comparison rather than a fixed statutory Colombian deduction. Actual taxable rental income depends on the costs and deductions legally attributable to the rental activity.

Capital Gains Tax

A nonresident individual who sells Colombian real property that has been held as a fixed asset for two years or more is generally subject to capital gains tax (ganancia ocasional) at a flat rate of 15% on the taxable gain. The gain is generally calculated as the difference between the sale price and the property's tax basis (costo fiscal), which may incorporate qualifying acquisition costs, improvements and applicable fiscal adjustments.

If the property has been held as a fixed asset for less than two years, the gain is treated as ordinary taxable income rather than an occasional gain. For a nonresident individual, such Colombian-source ordinary income is generally subject to income tax at the applicable nonresident rate, currently 35%.

Wealth Tax (Impuesto al Patrimonio)

Nonresident individuals may be subject to Colombia's annual Wealth Tax on assets owned directly in Colombia, subject to applicable exclusions and treaty provisions. The tax generally applies where the individual's Colombian net wealth as of 1 January equals or exceeds 72,000 UVT. For 2026, the ordinary individual wealth-tax rates are progressive: 0% up to 72,000 UVT, 0.5% on the portion between 72,000 and 122,000 UVT, 1% on the portion between 122,000 and 239,000 UVT, and 1.5% on the portion exceeding 239,000 UVT. The 1.5% top rate is temporary through 2026; under current legislation, from 2027 the maximum rate falls to 1%.

For nonresident individuals, only assets located in Colombia are generally relevant for Wealth Tax purposes, rather than their worldwide wealth. Qualifying debts directly associated with Colombian assets may generally be taken into account in determining net wealth.

1 UVT = COP 52,374 for 2026.

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

Real Estate Tax (Impuesto Predial Unificado)

Real estate in Colombia is subject to the annual Unified Property Tax (Impuesto Predial Unificado), a municipal tax generally calculated on the property's cadastral value (avalúo catastral), or self-assessed value where applicable. Tax rates are established by each municipality or district and vary according to factors such as the property's value, use and location. Under the general national framework, rates typically range from 0.5% to 1.6% of the property's cadastral value, although lower rates may apply to certain qualifying properties.

For a nonresident individual earning taxable rental income from Colombian property, property tax actually paid may generally be deductible in determining taxable income where it is related to the income-producing activity and the applicable deductibility requirements are satisfied.