buying property in colombia

panthdave says on Oct 3, 2006, 17:52:

Not an expert...and a beginner Need a business visa...but you have no civil liability rights to sue.. You probably will have more experts posting better than me...I looked at some properties at www.colombiacasa.com thru a few agents on that site..
That is the basics a lawyer or some members know alot more than me..



panthdave Miami

panthdave Miami

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arthur brode says on Oct 3, 2006, 19:08:

Rick,check out http://poorbuthappy.com/colombia/node/20158

http://www.calirentals.net/

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Brians says on Oct 6, 2006, 06:24:

Foreigners can own property However you need to follow the proper procedures documenting the wire transfers. You will not be able to open a bank account and need to wire money directly into the seller's account. You will need to have the recieving bank provide you witha Form 4 not 5. Then have 90 days to File Form 11. These are covered extensivily on the site. I would recommend looking around while you are down there as I feel location is the most important aspect. I think most people who buy end up just finding a place on their own by looking around.

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elk says on Oct 6, 2006, 09:41:

Purchasing your personal residence I’m currently in the process of purchasing an apartment and would like to discuss using form #5 in place form 4 and 11.


I was told by a local real estate attorney using form 5 was the best option rather than dealing with forms 4 and 11.


I was skeptical and ask for a second opinion. A conference call was made to an accountant who answered my questions and confirmed using form 5 was the best option. Being skeptical by nature, I requested further proof and a call was placed to DIAN which again confirmed the above opinions of both the attorney and accountant. I ask the following question of DIAN during the call:


Can I sell the apartment in the future and wire the money back to the U.S.? The answer was No.


Can I sell the property and deposit the funds into my Conavi bank account and use the funds for living expenses without tax consequences. The answer was yes. I would also be able to make trips back to the U.S. as long as the funds stayed in Colombia.


The positive points in using form #5 would be the ability of declaring a smaller sales price resulting in a lower property tax and other benefits.


It appears to me using form #5 might be the best option when purchasing a personal residence. The sales proceeds could be returned to the U.S. in the form of cash should you decide to sale and return to the U.S. (under $10,000 per trip)



It also appears one could use their ATM card daily to accumulate funds and deposit those funds into their bank account.


I also wrote a check on my U.S. bank account and deposited the funds into my Conavi bank account to test the rate of exchange vs using an ATM . The difference was 7/10 of one percent. In other words writing a $50,000 check would cost me $350.00 vs using the ATM machine.


I would appreciate any opinions regarding the use of form #5 be it negative or positive.

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Brians says on Oct 6, 2006, 10:46:

My opinion Declaring a smaller amount for property tax purposes seems minor. The taxes are very small until you get into the larger values (I think somewhere in the area of $380,000,000) and then it is a marginal rate so in my estimation unless your dealing with property value in excess of $500,000 USD then not a lot of advantage. This will also come back in the end if declare it a lower value as this is your cost basis and you will have to pay gains tax based on that lower figure. Then there is the fact that you can not get the money freely back to the USA if you need. I guess you could doing ATM withdraws but I sure don't want to be drawing out a couple of thousand at a ATM in 7 Eleven. What a pain in the ass. Anyway the only benefit is property tax which is meaningless in my estimation so file the Form 4 and not Form 5 and declare the correct purchase price.

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Brians says on Oct 6, 2006, 10:52:

By the Way Elk I looked at your profile. Your date of birth 7/20/1901. Happy belated 105 birthday:)

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Ctg Bound says on Oct 6, 2006, 13:23:

Brians Elk certainly looks 105!!!!!!!

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elk says on Oct 6, 2006, 13:29:

Brians... I probably won't live long enough to worry about tax problems or returning to the U.S. :)

I found paradise in Colombia!

My new apartment/condo also has wheel chair access should I ever need it, but I'm currently considering purchasing a large moto.
No one lives forever....and my objective is to enjoy life while I can.

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elk says on Oct 6, 2006, 13:54:

Ctg Bound...Living the good life Yes, I'm old but I still enjoy life and I've started dancing again. I probably need a few lessons however, but no one seems to mind my style. Perhaps I will be the first to reverse the aging process.



What a great place to live...and retire.

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aztec says on Oct 7, 2006, 11:18:

elk ... ...your post is proof you can not depend on advice from the average lawyer and real estate agent in Colombia. Save yourself some trouble and file form 4 and form 11. Those people advising you clearly don't have adquate experience with foreign investors.

Search this site for information on purchasing property as well as transfering funds.

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Gator says on Oct 7, 2006, 14:37:

Please... to save youself problems and pesos follow Aztec's advice(it would be mine also).

"Brevior Sltare Cum Deformibus Mulieribus Est Vita!" .

"Brevior Sltare Cum Deformibus Mulieribus Est Vita!" .

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elk says on Oct 7, 2006, 17:15:

Gator and Aztec - Purchasing property I have researched and read the posts relating to buying property in Colombia. Can you please give me more details as to why filing form #5 is a bad idea for a foreigner.

1. I understand filing form #5 will prevent me from selling in the future and wiring the money back to the U.S. This isn't a problem for me. I'm spending less than $57,000 USD for a personal residence and could easily use the proceeds from the future sale here in Colombia or take it back to Panama at $9,999.00 per trip. I have bank accounts in both Panama and Colombia.

2. Filing form 4 followed by form 11 creates problems since I understand it requires me to pay an accountant each year to file additional documents, correct? I'm also told it will draw attention to me. Most Colombians purchase using form #5 and the same rules apply to a foreigner, correct?

3. Filing form 4 and 11 requires me to declare the actual sales price resulting in more paper work. I've been told to keep the selling price below 75,000,000 to avoid further problems.

I appreciate your opinions, but I would appreciate more detail as to why. I'm still in a position to go either way.

My information came directly from a Real Estate Attorney, accountant and DIAN.

Perhaps we could all learn something from this discussion with more details. I will share whate ever information you give me with the Real Estate attorney and perhaps we can all benefit from this exchange of information.

Again, thanks for the advice.

elk

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Ctg Bound says on Oct 7, 2006, 17:49:

elk Regarding No.2 you will not need to file additional documents each year unless you have purchased OFFICIAL assets of 80 million pesos or more.

If you keep your personnel assets in Colombia below 80 million pesos, you do not need to submit yearly tax declarations.

As you are only officialy registering approx half the purchase at the notary, I wouldn't fill out form 4 or 11.

As you say, you can easily get the money out of the Country if you sell the property or use it to buy another property in Colombia.

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Gator says on Oct 7, 2006, 19:57:

eLK.My Suggestion.. Before you get in too deep consult and retain a good Contadore Publico (Certified Public Accountant) to help in filing the required forms, especially Formularios (forms) 4,5 and 11.

Net profits earned from investments are taxed by the Colombia government, at reasonable rates, before profits can be transferred out of Colombia. If you do NOT plan to repatriate funds it becomes simpler.

There are strict and somewhat complicated laws and regulations in Colombia for the import and export of dollars and converting dollars to pesos. If you do not follow the exact instructions regarding forms and time frame you will have a painful and probably painful experience. Funds transferred may be taxed at 46% on the repatriation of these funds.

You must report or make a declaration to the Banco de la Republica in Colombia. Form 5: This is a form you may use for reporting the importation and conversion of your funds to the Banco de la Republica. Assuming the funds are remaining in Colombia you have no further reporting responsibilities for the importations of your dollars. However, if at a latter date you have a need to sell the property and repatriate the money, the funds will be taxed at a 46% rate.

Declaration No. 4 and Declaration No. 11: A Foreign Investment in real estate is better handled by filing forms 4 and 11. Declaration of the import of dollars are reported to the Banco de la Republica with Form 4. Within 3 (this may have changed) months you must follow-up with Form 11 to legalize your purchase. Form 11 must be presented along with the contract of purchase, or promesa de compra venta, with-in this 3 month time frame. There are some exceptions to the 3 months. Professional help is best to navigate the exceptions you might be able to use.

If you have used Form 4 and 11 for the foreign investment you will be able to repatriate the funds without the 46% government tax. Most of us can purchase a house or apartment using this method. You will also likely need from DIAN a a tax ID number called a RUT. This number will identify you as a tax payer. You will use this number to report any annual tax liability on assets.

P.S. Since have an attorney don't worry about what we say-you are PAYING him for his/her advice so I damn sure would follow what advice he gives you. You paid for it.



"Brevior Sltare Cum Deformibus Mulieribus Est Vita!" .

"Brevior Sltare Cum Deformibus Mulieribus Est Vita!" .

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aztec says on Oct 8, 2006, 04:56:

Search for comments... ...by viewpoint. You will see that the Colombian government came after him 2/3 years after his transactions. He was unable to avoid a liability (penalty). Of course his investments were much larger.

In my case I immediately got in trouble over a $10,000 down payment on a construction contract because the bank filed form 5 on the transaction. The contractor and agent gave bad advice. Had to hire a "high powered" and expensive lawyer to straighten out the mess.

Don't be mistaken in believing that filing form 5 allows to to fly below the radar. It seems that every body in Colombia knows when you deposit large sums regardless of which form you are using.

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surf17683 says on Oct 15, 2006, 12:41:

advice on buying property in colombia I've been reading these posts and it seems very complicated. what i want to do is hopefully simpler. i want to buy and flip houses/apartments in colombia. however, if i give my colombian fiance my money and deposit funds from my US retirements funds into her bank account - do any of these laws apply? if the whole business of flipping houses were under her name, a colombian citizen, would it makes things simpler as far as tax laws are concerned. also what would be the best way to bring aprx 30,000 dolares from the states into her account, thanks for any advice....
surf

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Gator says on Oct 15, 2006, 14:51:

Cuidado!! NT
"Brevior Sltare Cum Deformibus Mulieribus Est Vita!" .

"Brevior Sltare Cum Deformibus Mulieribus Est Vita!" .

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robi666 says on Oct 15, 2006, 17:35:

No, surf Absolutely do not do it!

"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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robi666 says on Oct 15, 2006, 17:50:

The correct way to bring money in Colombia is definitely filing form 4 and 11.
Also, I don't understand the problem of declaring the full amount of what you are buying on form 11. Your property will be taxed on the "Valor Catastral", not on the declared value on form 11. With form 11, you can also file an amount used to renew the apartment.
With form 11, you can file the "promesa de compra venta" that bears the full amount. At the moment of buying, you can declare a smaller amount on the bill of sale and keep it.
I hope you got a good lawyer... but try to be absolutely sure about that!
Read the circular DCIN 83 and ask some questions to your lawyer to see if he knows that in deep. That's what I did with some lawyers, saving a lot of money and troubles. You'll be surprised of how little they know and how much they swear to know. Again... BEWARE of colombian lawyers!
Try to get a written note by the DIAN officer who is saying to file form 5 instead form 4.
Also, if you need a VISA, you could use the registration on the foreign investment for having a residence visa. This will not be possible if you file form 5.

"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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robi666 says on Oct 16, 2006, 05:30:

More... Brian is right, declaring the correct purchase price at the moment of buying will not have a big effect on what has to be paid by the buyer. But...:
1) The seller will pay a lot for the "retentione a la fuente". A lot of money on tax and he will not be happy of it. It is common habit in Colombia to not declare the full amount. If you specify that you want to declare the full amount, the seller will not go down that much and you will surely loose a couple of millions. Different if you buy a new apartment from the builder or from a bank: you will not have the chance to declare a smaller value as they must declare the full value.
2) Declaring the full price, it will make the "Valor Catastral" (the official estimated value of property) be risen immediately. That will not mean a lot on property taxes, but quite a lot on the "predial" (common taxes) that you pay each three months in Medellin (or once a year in Bquilla or Santa Marta). As an example, if you pay 800.000 pesos each three months with a full price declared of 240.000.000 of pesos, that would likely be 500.000 pesos declaring a price of 150.000.000 (just a few millions higher that the actual valor catastral, which is the minimum price that can be declared). Now, 100.000 pesos per month is not a lot, but pays a good dinner for two with a good red wine in HatoViejo Las Palmas, Medellin (when are you coming next Brian? :-))... or almost a month of corriente for lunch in La Murillo, Barranquilla.
For what I see and was told (until now... cross my fingers), DIAN will not make a cross reference check on what you declare on form 11 (i.e. on the Promesa de Compra Venta that you file with form 11) and the property taxes that you actually pay. That check is on the Valor Catastral: I mean, everyone in Colombia pay property taxes on the Valor Catastral (the official estimated value of property) or the real gain on rented out properties. Form 11 has merely got a statistical value and is managed by Banco de La Republica, not DIAN.

"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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Terry says on Oct 25, 2006, 13:19:

money transfers On the same subject:I'm selling my property in the UK and moving to Bogota with my Colombian wife of 30 years.
Not emediately buying a house,but what are the rules of sending funds to Colombia. I have a Colombian neice who has opened a bank account in Bogota in her name and I had sent some smaller ammounts to her over a period of 2 years without any problems.Although she had to declare each ammount.Now I want to send a fairly large ammount in one shot due to the sale of my property in the UK.What do I need to do?
Terry

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DavidH says on Dec 18, 2006, 06:20:

Buying as head of household.. with my Colombian wife as my life partner still means the deal is regarded as a purchase by a forigner? Hey, I don't want a seat on the board of the World Trade Organization or a post at the UN, I just want to provide a home for my family... How does a forigner, married to a Colombian do that in Colombia?

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robi666 says on Dec 18, 2006, 09:11:

DavidH, which is exactly your problem? I mean, you have two way:
1) You put the house to your name and file form 4 and 11 to register the foreign investment in case you want to get your money back without paying taxes
2) You put the house to your wife's name. She receives money filing form 5. DIAN may or may not tax her for a "ganancia ocasional".

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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TioJoe says on Dec 18, 2006, 14:49:

Buy New Construction Even though I have a joint savings account in Colombia with my wife. It was not a requirement when we purchased a new apartment using american dollars. The property is in the wifes maiden name so certainly it is not considered a foreign investment however my name could have been on the title. I found several good companies building new apartments in Bogota very happy to receive dollars for the purchase through a separate fiduciary bank. A process I would very highly recommend. The money is then transferred at the prevailing TRM rate for the day from your bank to the fidicuary bank. As was stated to you on a previous post "SAVINGS" accounts are much easier to open and something to consider. Now the bad news, cash talks so financing might be difficult if not impossible to obtain in Colombia under the circumstances you described earlier. The good news -- you can buy a really nice apartment for very little money. A little ray of hope -- like new construction in the USA you might find a little more flexibility in financing if you buy new.

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aztec says on Dec 18, 2006, 15:58:

Search this site for many... ...different perspectives on purchasing property in Colombia. It can be very simple or become complicated depending on your circumstances.

Please be sure you use a professional agent and lawyer who has experience with foreign purchasers. You may be able to fly under the radar but then again Colombian authorities are becoming more sophisticated in following the money.

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roquero says on Dec 31, 2006, 11:13:

buying an inexpensive lot I am considering buying a lot [property only, no casa] in Colombia that costs under $3000
If I buy as a foreigner, do I have to file forms 4 and 11?
The amount of money is not that high, so I could bring in the funds as cash within the legal limit, thus not requiring bank transfers.
I also have the option of giving the cash to my Colombian partner and having them buy it in their name- what forms would be required there?
I would appreciate any advice
As I understand it, only a Notary is required- attorneys not neccesary
Opinions?

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robi666 says on Dec 31, 2006, 11:33:

1) You can buy withouth filing the forms (4 and 11). It is your choice to do it or not.
2) There is maximum amount of money that can be received in Colombia without filing a form. Check with Western Union. If they have to, they will have to file form 5.

In any case, the buying process has nothing to do with forms. That is, the notaria will not ask for any form or the origin of money.

3) No, you do not need an attorney, if you can check the Certificado de Libertad properly by yourself. I am sure that they can help you at the notaria.

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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roquero says on Dec 31, 2006, 12:01:

Bringing in cash Thanks robi, I will check but in this case I won't need Western Union, as the amount is roughly 2500 dollars and I will bring it myself
As I understand it, you can bring in under ten thousand dollars to the country without having to report it
There's also the ATM option in this case
That's great that an attorney is not required, most people here in Colombia do not have a high opinion of that profession

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Ctg Bound says on Jan 1, 2007, 07:17:

roquero Its peanut money, so nobody will really care.

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aztec says on Jan 1, 2007, 15:01:

buying property in colombia This URL might help.

http://www.crossbordermortgages.com/guide/colombia.html

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Jon66 says on Jul 16, 2008, 19:16:

aztec says on Jan 1, 2007, 15:01: flag

buying property in colombia This URL might help.

http://www.crossbordermortgages.com/guide/colombia.html

The article concerns foreign nationals. Any information on Colombian nationals buying property in Colombia from the U.S.?

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aztec says on Jul 17, 2008, 05:03:

Good question. I do believe you need to get an answer to this question if you plan to follow up with your purchase.

When we were first looking to purchase our initial plan was to purchase an apartment in my wife's name. It became complicated immediately!

For example, does she owe wind fall profits taxes on the "award" from her husband? The inheritance laws are different from those in the States.These are only two of the many obstacles one may find.

My point is that you need to find a lawyer with experience handling foreign investments. That money you are planning to use, I assume is not already in Colombia?

If you transfer significant amounts of money to Colombia you will need to eventually explain the transaction. Transparency is all the government is asking of you.This can be done with no repercussions if you follow the rules. Your problem will be in finding someone who knows the rules as they apply to your particular set of circumstances.

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