Whenever a Colombian property sale is nearing completion, several fees and taxes come due which must be paid in order for the real estate transaction to finalize. These costs, collectively known as closing costs are paid according to the the terms of the Promesa de Compraventa, though custom generally dictates which costs should be borne by the buyer, the seller, or split between them.

• Notaria Fees (Gastos Notariales y de escrituración)

Notarias charge for the public services they provide during a property transfer, with their fees being set by the government. Notarias fees will include the Certificado de tradición y libertad - a last minute title search to make sure the property is still in good standing, and the Costos de escrituracion - the costs related to the creation of the Public Deed which legalizes the property transfer, which is billed at 0.54% percent of the value of the property. So, in cases of luxury home sales, the Notaria fees may be substantial. It is customary that the buyer and seller split these fees equally. These fees are generally paid on the day of the signing of the public deed as non-payment will delay recording of the transfer.

• Transfer tax (Impuesto de beneficencia)

This is a transfer tax collected by the department where the property sale takes place (i.e. Antioquia). This tax varies by department but may be as high as 1% of the value of the property. This tax is borne by either the buyer or both parties depending on the custom of the location of the property. It is either paid right away at the Notaria or in the days after the transfer is complete depending on the location.

• Registry Tax (Impuesto de Registro)

This is a government tax collected when a new public deed is recorded into the government records. This tax is set at 0.67% of the value of the property. This tax must be paid at the Notaria during the property transfer process or the notario will not record the new title. This tax is customarily paid by the new owner of the property.

• Withholding Tax (Retencion en la fuente)

  The Seller must pay 1% of the sale price at the Notaria to the Colombian government as an offset against future taxes that may be owed from the completed sale.

• Luxury Tax (Impuesto de Timbre)

  As of January 1, 2023, the Colombian government imposed a new tax on the amount exceeding $848,240,000 COP (about $170,000 USD) on any property sold. This tax is generally paid at the Notary as the property transfer cannot be recorded without the tax being paid. As this is a completely new tax, there is no custom yet as to whether it is borne by the buyer or seller so a split is currently suggested.

• Property Tax (Impuestos Predial)

Property taxes in Colombia are generally paid at the beginning of each year and are paid for an entire year at a time. By law, properties cannot be sold unless the full year of property tax has been paid. So, during property sales, it is customary for the buyer to credit back the seller the months he or she already paid for property taxes but will no longer be the owner. Whether this credit back is done by adjusting the sales price or by paying in cash after the transfer is complete depends on how the Promesa de compraventa is written.

• Real Estate Agent’s Commission

Real Estate Agents are generally paid their commission at the same time that the Public Deed of transfer is signed. Real Estate Agents traditionally charge 3% of the property’s sale price as their commission which is customarily paid by the seller. This 3% remains fixed regardless of how many real estate agents are involved, so two real estate agents (buyer’s and seller’s) will receive 1.5% each as commission (and will not double it to 6%).

At Restrepo Legal, we can help you through every step of your property purchase to make sure it is problem free. From title searches to the drafting of a real estate contract, from fund transfers to the handing over of the keys, we will help you protect your investment and make sure you will be able to enjoy it for years to come. Contact us now if you want peace of mind regarding your real estate purchase in Colombia.