Join in 7 seconds.. Existing users: sign in.

all forums, active | friendly talkzone, travel tips, visa & paperwork, renting, selling & meetups, politics & the war, espanol

Buying an apartment

Hello again PBH, the information source that beats all the official information you can get in Colombia. I’m in the process of buying apartment in Santa Marta, I already paid for the Promesa de Compra/Venta but I’m going trough all the problems like the rest of you to bring my money to Colombia. I’m in the process of getting papers ready like 1. letter from my bank in Europe 2. last tax declaration 3. receipt from sale of my property in Europe, all translated into Spanish and stamped by the Colombian consul over there. But all this takes time and I want that specific apartment now.
So I do what some of you guys have recommended, I try to, together with my wife (Colombian), to withdraw from all available sources, VISA card, Money Transfers and so on all we can, and I think we will be able to get enough money in time for the closing of the deal. Hopefully by then all my papers will be here. I still have a “contraseña de cedula de extranjeria�? , but I´ll get the real one by the end of February and by the I think I can open a Colombian bank account.

My question is, have I made anything wrong until now? In order to register the purchase of the apartment as a foreign investment and to register the money transfer, do I show all the receipts from the Money Wires and VISA withdrawals in order to show how I got the money into the country? Are there any risk that some central register is being aware of that I’m bringing money to Colombia through many small transfers and stop it all? Any other useful information?

By andersson_s on Feb 6, 2008, 08:14 in Visa & paperwork.

sloopskipper says on Feb 6, 2008, 09:23:

There are forms (#3, #4. #5?) that must be registered so you can export the money, without a big penalty if/when you leave Colombia.

I am sure someone more knowledgeable can fill you in.

0 funny, 0 helpful.

robi666 says on Feb 6, 2008, 12:21:

Andersson, not to get you scared, but you're doing a pretty good mess...
First, important question, are you sure that you can have a bank account in Colombia? Or, your wife has got a bank account? Or someone you trust has a bank account?
If not, we can still work it out differently, but please answer first... i will put you on the right track.

"I am a citizen of the most beautiful nation on earth. A nation whose laws are harsh yet simple, a nation that never cheats, which is immense and without borders, where life is lived in the present."

0 funny, 0 helpful.

aztec says on Feb 6, 2008, 12:42:

And form 11.

0 funny, 0 helpful.

lawyer CO says on Feb 6, 2008, 13:04:

yes..be careful...you are doing the wrong way....i can see a huge penalty coming....

Esteban R.
lawyer
email: lawyerscolombia at yahoo.com

0 funny, 0 helpful.

andersson_s says on Feb 8, 2008, 06:33:

Hi and thank you for your answers. I’m pretty sure that I can have a bank account when they’ve given me the cedula de extranjeria hopefully in a couple of weeks and yes my wife has a bank account and we’re saving all the withdrawals from credit cards etc. there in order to get enough for the final payment of the apartment. We are saving all the bank receipts in case someone want to know how we got the money into the country and I have documents on it’s way to Colombia showing how I made the money, stamped by the consul of Colombia.
Lawyer CO, can you be a little more precise, what kind of penalty am I risking and for what reason?
Thanks a lot for your advices….

0 funny, 0 helpful.

robi666 says on Feb 8, 2008, 07:06:

Andersson, being short, this is the only way to go:
1) Transfer the money into your wife bank account (or wait for your account if you are sure to be able to open it)
2) Receive the money with form 4 with YOUR name as the foreign investor written on it
3) Buy the apartment to YOUR name exclusively
4) File form 11 within three months from filing form 4 to Banco de La Republica with the prepurchase agreement and, better even if not required, a copy of form 4 itself.
If the prepurchase agreement was done to your wife name or both of you, either:
a) ask the seller to write a new one exclusively to your name and file it, or
b) file the Certificado de Libertad bearing YOUR name as the new owner and the value of the act of selling.

THIS IS SOMETHING YOU'LL PROBABLY DO NOT WANT TO DO
If at the moment of buying, the seller wants to declare a lower amount, like it is normal anywhere in Colombia, forget the Certificado de Libertad and file the prepurchase agreement. Then hope
BdlR won't cross the data with Catastro and check (I am sure they do not do that).
The seller will pay less taxes, the act will cost much less and your impuesto predial will be lower.
WHATEVER, it is a fair attitude to advice the seller that you want to declare the full amount on the bill of sale.

With form 11, you can justify not more than the amount in the prepurchase agreement. Any more money that you received, you will have to wire the money back. That is, you cannot include notary and taxes. If you need more money, my advice is to justify them with a contract for renewing your apartment, which you will file with form 11. They will not check if you did the work or not.

If you have been living for more than 6 months in Colombia, you are considered resident by DIAN and BdlR and you cannot register the act as foreign investment and you will have to file form 5 at the moment of receiving the money. Nothing wrong with it: you just loose some fiscal benefit at the moment of selling the apartment and wanting to transfer money back. There are other ways, anyway.

You can always make a try and file form 4 anyway: Banco de La Republica do not ask a copy of your passport when filing form 11, so they will probably accept the investment anyway. It has happened in the past.

0 funny, 0 helpful.

andersson_s says on Feb 8, 2008, 08:11:

Great Robi666, thanks a lot, I was worried for a while.

0 funny, 0 helpful.

vicshere says on Feb 8, 2008, 08:14:

dam rob your good....where you get all the knowledge...you been living in Colombia way too long

listo

0 funny, 0 helpful.

robi666 says on Feb 8, 2008, 08:44:

Vic, after you have interviewed 3 lawyers, all swearing that they know anything, and found out they know nothing, you begin to worry about your own money.
So you decide to read the entire Circular Reglamentaria Externa DCIN - 83, which is on the Internet.
Then, you are prepared to decide if the one in front of you is good to help.
I found a good Contadora.
A couple of direct experiences did the rest.

0 funny, 0 helpful.

robi666 says on Feb 8, 2008, 08:46:

Andersson, you probably want to read
Procedimiento para la adquisición de inmuebles en Colombia por residentes en el exterior
https://quimbaya.banrep.gov.co/secinternet/operaciones.jsp?opcion=inve...

0 funny, 0 helpful.

vicshere says on Feb 8, 2008, 08:49:

I know the feeling man and it isn't just lawyers...goes for DAS, MRE, major companies, the policeman, the mechanic, the garbage man...never believe the first person you ask for information....around the 10th time you hear the same thing....check somewhere else hehehehe

listo

0 funny, 0 helpful.

andersson_s says on Feb 8, 2008, 15:17:

Robi666 thanks again, I have the same attitude, only I feel that I'm a few years behind you, spent the whole last night worrying about a tax problem, surfing through the internet, finally in the morning I found out that I'm probably right and a top level accountant I'm in touch with is probably wrong, so I have some sleep to recover, I'll do it with mi colombiana and a Ron Viejo de Caldas, have a great weekend

0 funny, 0 helpful.

sloopskipper says on Feb 9, 2008, 15:43:

Robi,

That is great! Will file for futures.

But do those forms include the one you need for, if and when, you want to sell the property and repatriate the money to your home country, or another, and escape excessive fees or taxes? Form 11?

0 funny, 0 helpful.

robi666 says on Feb 9, 2008, 16:26:

Registering your investment you rest sure that you can repatriate the sum that you wired. Of course, you will have to pay taxes on the "ganancia".

0 funny, 0 helpful.

sloopskipper says on Feb 9, 2008, 16:27:

That is form 11? What is capital gains in Colombia?

0 funny, 0 helpful.

Frank Rizzo says on Feb 9, 2008, 17:44:

In addition, if you transfer your funds into your bank acct. or to your atty's and continue to file the incoming forms for remodel. That too can be brought back out, if you ever decide to sell and take your money out of Colombia. Remember once over 280MM COP in assets in colombia registered at DIAN (anything that goes on the books like cars, homes, etc....not home furnishings). Then you have the patrimony taxes to deal with, and they are very serious about that one.

0 funny, 0 helpful.

sloopskipper says on Feb 9, 2008, 18:13:

I have no clue what patrimony taxes are. 280MM is what in real numbers, mil million? 280,000,000,000 COP?

0 funny, 0 helpful.

robi666 says on Feb 9, 2008, 18:24:

Well, Frank, if I remember well the patrimony tax is after 3.000 millions of COP.

Artículo 293. Hecho generador. El impuesto a que se refiere el artículo anterior se genera por la posesión de riqueza a 1º de enero del año 2007, cuyo valor sea igual o superior a tres mil millones de pesos ($ 3.000.000.000). (Modificado por la Ley 1111 de 2006 art. 26)

0 funny, 0 helpful.

Frank Rizzo says on Feb 9, 2008, 18:30:

I'll ask on monday robi, i could be wrong on the name..... we've an accountant in Medellin that does all this for the associdad. Things got sticker after 280 is what i remember from 2005 and i believe that was the name of the tax. They had several meetings with DIAN regarding this, as in my case we filed all the correct loan papers with DIAN for the colombian associdad taking loans from the US corp. They did not take that into acount and finally got that straight.

0 funny, 0 helpful.

sloopskipper says on Feb 9, 2008, 18:30:

I did a google search, but like most here, I find they are generally of questionable value, at least to me.

0 funny, 0 helpful.

Frank Rizzo says on Feb 9, 2008, 18:33:

sorry....skipper...280 is just about 135k usd...

0 funny, 0 helpful.

robi666 says on Feb 9, 2008, 18:37:

If you are talking about income taxes, after something like 370 millions of patrimony, you will have a "renta presuntiva" (6% of patrimony) enough high to begin paying taxes.

0 funny, 0 helpful.

sloopskipper says on Feb 9, 2008, 18:37:

$ 3.000.000.000 COP?

Surely no problem for me because I wouldn't invest that much there, even if I had loose assets like that, jaja.

But, thanx, anyway.

0 funny, 0 helpful.

sloopskipper says on Feb 9, 2008, 18:39:

Frank Rizzo says "sorry....skipper...280 is just about 135k usd..."

Well that is different, and more complicted.

DAMN

I expected that I would eventually have, maybe $150K+ in an apartment, or two.

I wish they would create a nuevo peso and drop the three 0s like many countries have done in the last fifty years, EVEN Venezuela, jaja.

0 funny, 0 helpful.

Frank Rizzo says on Feb 9, 2008, 18:49:

I don't think this is income related robi...... as i do have an investment visa, but never spend more than 180 days per year there to avoid being a resident. This was an assesment on assets of cali and medellin homes. You've got me curious now...i really thought they called it patrimony tax. I'll call Viewpoint on this one.

0 funny, 0 helpful.

robi666 says on Feb 9, 2008, 18:51:

Artículo 292. Impuesto al patrimonio. Por los años gravables 2007, 2008, 2009 y 2010, créase el impuesto al patrimonio a cargo de las personas jurídicas, naturales y sociedades de hecho, contribuyentes declarantes del impuesto sobre la renta. Para efectos de este gravamen, el concepto de riqueza es equivalente al total del patrimonio líquido del obligado.

Parágrafo. Los contribuyentes podrán imputar el impuesto al patrimonio contra la cuenta de revalorización del patrimonio, sin afectar los resultados del ejercicio. (Modificado por la Ley 1111 de 2006, art. 25)

Artículo 293. Hecho generador. El impuesto a que se refiere el artículo anterior se genera por la posesión de riqueza a 1º de enero del año 2007, cuyo valor sea igual o superior a tres mil millones de pesos ($ 3.000.000.000). (Modificado por la Ley 1111 de 2006 art. 26)

http://www.dian.gov.co/dian/15servicios.nsf/0108fdc3639d83ff05256f0b00...

0 funny, 0 helpful.

sloopskipper says on Feb 9, 2008, 18:52:

Damn, this is becoming to sound MUCH more complicated than Panamá, which has been a real pain in the ass.

I wonder if they are serious about seeking foreign investment.

0 funny, 0 helpful.

Frank Rizzo says on Feb 9, 2008, 19:04:

Good link, thanks robi !!...Sloop...that's 1.4MM USD. So if you're just wanting to invest 150k what robi does not affect you. It's really not that complicated, there are many accountants that can keep you straight.

I'll find out on monday what my accountant was talking about. Robi, do you know if this was in effect in 2005?

0 funny, 0 helpful.

sloopskipper says on Feb 9, 2008, 19:21:

Thanx Frank_Rizzo. It seemed that it could not possibly be so complicated, otherwise no expats would come there.

MM=mil milliones, billions, or x,000,000,000?

But. I am also somewhat concerned about taxation of un-earned foreign income on dividends, interest, and pensions after 5 years residency.

0 funny, 0 helpful.

sloopskipper says on Feb 9, 2008, 19:23:

I imagine none of the guys here are in Cartagena, yes?

0 funny, 0 helpful.

Frank Rizzo says on Feb 9, 2008, 19:26:

MM = millions, BB = billions.... sorry...not in Cartagena, too hot for me...Part time in cali and medellin though. To each his own...good luck and enjoy!!!

0 funny, 0 helpful.

sloopskipper says on Feb 9, 2008, 19:41:

Thanx Frank Rizzo,

Well, I live in Panama City, and came here from Viejo San Juan and Pennsylvania where summertime has hit 108F.

But I found that long trousers, not to be obvous turista in Cartagena, was uncomfortable. But I have a love and a connection with the sea.

I was, by accident, in the funeral prosession when they buried the former kick-ass Mayor and police commisioner of Philadelphia, Frank Rizzo, in 1991.

0 funny, 0 helpful.

robi666 says on Feb 10, 2008, 06:38:

Sloop, I hate to tell you this, but if you have a love and connection to the sea, Cartagena is the wrong place to be...

0 funny, 0 helpful.

sloopskipper says on Feb 10, 2008, 07:02:

Why is that?

0 funny, 0 helpful.