buying apts

arthur brode says on Sep 24, 2006, 01:01:

yes you can buy property as a tourist.its a good investment.i know a guy here in Cali that purchased a penthouse for 600 million pesos several months ago and is renovating it.he hasnt even finished renovating it yet and someone already has offered him 1 billion pesos for it.and i can put you in touch with the realtor/lawyer that helped him with the buying process.to open a bank account you need what is called a "cedula de extranjeria".once you get your Visa you can apply for this cedula.for more info.contact me. arthurbrode at aol.com

http://www.calirentals.net/

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arthur brode says on Sep 24, 2006, 13:25:

BTW the North American that purchased this property resides in the U.S.and has conducted all his buisness transactions while there.he has not physically seen the property(only through pictures which are constanly being emailed to him). and he has never personally met the realtor/lawyer that has his power of attorney. if you are interested i can also put you in touch with the construction crew that is presently renovating his penthouse.according to him,they work cheap.

http://www.calirentals.net/

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Peter (Moderator) says on Sep 24, 2006, 16:17:

Thanks Arthur.. I would love to see a *detailed* overview of the legalities and mechanics of buying property in Colombia for foreigners.. perhaps you could write one? It sounds like you have experience with that..

Poor but snappy

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dennisre says on Sep 25, 2006, 17:14:

I found an apt in Cartagena bocagrande 43 sqm for 152 million (3.3 million / sqm) brand-new with garage, 1 block from the beach. would it be a good investment? I think it can be offered at 100,000-150,000 per day. realistic?

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robi666 says on Sep 25, 2006, 17:24:

Sigh, 3.3 millions per sqm... Would it be a good investment? For the one who sales the apartment surely yes! For you, almost surely yes if you keep it for 10 years or more.
I am not sure that you would make 100 - 150mil per day. Plus, renting per day = destroy the apartment... so, why buy new?
If you buy to invest, i.e. to rent per day, my advice is to buy something older and cheaper.

"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."

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arthur brode says on Sep 25, 2006, 18:12:

and Cartagena is one of the most over priced cities in Colombia.plus,the weather is hot.

http://www.calirentals.net/

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Gator says on Sep 27, 2006, 14:05:

Infomartion on Buying Picked this up from the web some time ago.

"Existing law in Colombia has given full legal rights to foreign citizens who want to invest in Colombian real estate. Anyone can buy and own a real estate in Colombia. The new law (Decree 241) has made the procurement procedures much simpler, firstly, by permitting foreign investment in real estate without limitation; and secondly, by repealing a constitutional provision that empowered the Colombian government to confiscate foreign-owned property without providing any compensation.

In order to purchase real estate in Colombia, the buyer and the seller have to enter into a purchase/sale contract that is to be contained in a public deed and registered in the real estate records office in Colombia, which is called the departamento de bienes raíces in Spanish. The contract must include the name of the buyer and the seller, their respective I.D. numbers, the property’s boundaries, the sale price, method of payment, and all other general information such as property’s real estate number and commission plan, if a broker is used.

The buyer can sign either directly or through a third party representative. In the case of the former, the purchase/sale contract is realized through a preliminary public deed (minuta) that is later finalized by the notary for registration. In the later case, the buyer must provide a special power of attorney to his or her notary, who must have a proof of certifiable Colombian identification to sign the contract on the buyer’s behalf. The power of attorney needs to be signed by the buyer before a public notary unless made abroad in which case the Colombian Consul in the country where the document is made must legalize the signature. A power of attorney that is signed abroad is considered valid if legalized by the Ministry of Foreign Affairs.

Before purchasing property, it is essential to verify that the property offered for sale actually belongs to the person selling it and that it is not subject to any liens or other financial attachments. This can be accomplished by requiring the seller provide the property’s ownership history and a no-lien certificate (certificado de tradición y libertad), which should date back not more than one month. Requests for the ownership history and no-lien certificate of the property can be made at the local public instrument records office (Catastro in Spanish) in the area where the property is located. Included with the request should be the property’s real estate registration number, the owner’s address or I.D., and evidence that the certificate issuance has been paid.

The clearances of all the taxes can be ensured by obtaining an account statement of the property from the treasury office (known as oficina de información fiscal in Spanish) of the city or district where the property is located.

The purchase/sale public deed requires the following documentation:

• Power of attorney issued by the buyer, if applicable.
• Value-gain payment certificate evidence of payment of the value-gain taxes; generally levied by all municipalities.
• Property tax payment certificate or photocopy of the latest tax return statement, with evidence of payment.
• If the property is subject to a condominium regime (in the case of condos or houses in a residential complex) a payment certificate certifying that all maintenance and other fees are up to date. Alternatively, the seller may submit a notarized copy of the public deed that contains the condominium or association rules governing the property.

Financial Matters
The Colombian government requires foreigners to use “clean, non-laundered money�. Investors must deposit funds into the seller’s account by completing the Central Bank’s Form No. 4. This cash transfer is not subject to any taxes since it is a foreign investment. However, the buyer within 30 (or 60) days must register (using Form 11) the foreign investment with the Central Bank and attach the property’s ownership history and no-lien certificate. This registration is mandatory if the buyer wants to exercise his foreign exchange rights, such as remitting the money abroad when he or she resells the property.

The payment of the agreed sale price has to be made to the seller in full. If the property has liens, then an initial down payment of 20 to 30 percent of the sale price is made to commit the seller to clearing the liens and other encumbrances such as unpaid taxes and unpaid municipal utilities.

The prevailing interest rates in Colombia vary annually for real estate loans. These loans are short-term loans and are primarily given to Colombian nationals.

Foreign buyers should engage a local broker with ample experience. The commission that the buyer has to pay to the broker is customarily 3% of the property value.
Other Important Issues
Taxes and other charges applicable during the process of acquiring real estate in Colombia as well as certificates dealing with the history of the property, detailed title enquiry and two certificates from the municipality, the Paz y Salvo Predial (which indicates that all municipal taxes on the property have been paid) and the ‘ Paz y Salvo de Valorización (which indicates that all taxes related to the increases in the value of the property due to improvements to the property or area have been paid) are generally borne by the buyer.

The notary office where the public deed is registered charges notary fees equivalent to 2.7 per each thousand of the sales price (normally the buyer pays 50% and the seller the other 50%).

If the seller is an individual, then 1% of the sales price is deducted as withholding tax (this tax corresponds to the seller). It is deducted at the source with the objective that the income does not leave the country with out being taxed.

Registration of the purchase/sale public deeds with the Public Instrument Records Office (Catastro) carries a payment of the corresponding registration tax (equivalent to 1% of the sales price), as well as the registration fee (equivalent to 0.5% of the sales price)."

amigos, this is NOT something to under take on your own. Retain the services of an competent attorney KNOWLEGBLE in real estate transaction and NOT one suggested by the seller or his agent. I would also retain a good Contadore Publico (Certified Public Accountant) to help in filing the required forms, especially forms 4 and 11. Make a mistake on these and it can cost big bucks down the road.

"Brevior Sltare Cum Deformibus Mulieribus Est Vita!" .

"Credidi pretio parvo emere et magno vendere tibi in animo fuisse!" .

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robi666 says on Sep 27, 2006, 19:10:

Just add a few points:
1) Just add a few points:
1) You must present the form 11 within 3 months, not 30 or 60 days. You can even ask for a delay (form 17).
2) The complicated part about those forms is another one. A subtle one. First of all, it is a common habit in Colombia to declare a lower price on the contract, to avoid paying some taxes. If you tell a seller that you want to declare the all value, he will ask for a couple of millions more. Now, you have to file a prove of payment with form 11. One year ago, they wanted you to file the new "certificado de libertad" bearing on it your name and the value of the apartment or house. If you declare a smaller amount at the moment of closing, the certificate will bears that smaller amount on it. Big problem with Form 11... Thank God, now they accept the notarized "Promesa de Compra Venta", that will surely bears the full amount. But, watch out, things can always change.
3) More... when you get money to Colombia, you will have to deal with an uncertain rate exchange. What do you do? Do you think about transfering a bit more to be sure to have enough pesos to pay and to cover the notaria and, eventually, the lawyer and agent expenses? WRONG! If it happens that you transfer more, and you file the full amount with Form 4, they will request to wire back the difference! What you can do is to have a contract at hand about renewing the apartment, to justify the extra amount of money that you wired in and file it with form 11.

"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."

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dennisre says on Dec 1, 2006, 10:54:

robi, thanks for the info
But I don´t understand point 3. To get the money to colombia, I will open a citibank account here and then transfer from my other citibank account. Do I need to declare the money in one of the forms? In my understanding I can transfer as much as I want and I only need to declare what I transfer to the sellers account. Is it right?

another question: can I easily transfer from citibank Colombia to e.g citibank USA?

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TioJoe says on Dec 5, 2006, 09:41:

Just bought an apartment in Bogota I just had an apartment built in Bogota and paid for it 4 weeks ago so this is current information as it relates to my experience. No tax for dollar transfers to Colombia from the USA just the prevailing TRM rate. I used a fiduciary bank as an intermediary between buyer and seller something I would strongly advise if you will be buying new construction. My father in law is an accountant and my brother in law is a bank VP and an attorney so from what I have seen over the two years of transfering money for construction. No additional tax if the money was earned in the USA. My closing costs with the notary was 5 million pesos {1/2}. New construction will require additional money for upgrades in pesos. This was not any more complicated than buying a home in the USA however if you ever want to convert back to dollars additional forms are needed. This does not apply in my case. American banks DO NOT GUARANTEE funds to Colombia if lost however the trail is very good if you keep all your paper work -- I made 16 transfers and one had to be traced. The only documentation I had to provide was job or income verification and previous tax statements to prove the money was earned honestly. CitiBank accounts in the USA and Colombia are not considered the same. You can use the ATM in Colombia at any CitiBank accessing your account in USA with no charge but you are limited as to the ammount you can withdraw per day. Best of luck!

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robi666 says on Dec 9, 2006, 10:30:

Dennis,
to answer your Dennis,
to answer your questions:
form 4 and 11 are filled to register the foreign investment, so you will not have problem in case you want to sell the apartment and take back the money abroad.
You can transfer money to your account, but, in any case, you will have to file form 5 stating the origin and destination of funds. Money that you bring in with form 5 will not be registered as investment, thus you won't be able to get it back without paying taxes on it.
If you want to import money for buying the apartment and register it with form 4, you need to wire it separately from money that you will receive with form 5, i.e. money for living or buy furnitures.

Better to burn out than to fade away.

"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."

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aztec says on Dec 9, 2006, 13:25:

Is there ever any reason why ... ...you would not want to use form 4?

The future is fickle.After all look at what is happening in Venezuela. An investor cannot move his money out of the country.

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DavidH says on Dec 10, 2006, 09:46:

"No way" said the representative at Citibanc. I asked about opening an account and that was what I got. I am very recently married to a colombian and they told us that I had to live there 6 months before I could open even a joint account with her. She doesn't work - complicating thing slightly.
I'm working out of the country for thenext 8 months but my wife is there and we want to buy right away. We will need financing but will put a substantial amount down.
I would like to know how to get this moving. Any suggestions?

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