How to buy Real Estate in Colombia
When thinking about how to buy property in Colombia consider the following tips outlined in this article. Our experienced real estate attorneys help individuals, families and businesses with all real estate sale, purchase and rental issues. In Colombia it is important for Buyers and Sellers to use licensed attorneys to perform the following tasks:
■ First and Foremost, Use of an INDEPENDENT LAWFIRM OR ATTORNEY is EXTREMELY IMPORTANT. DO NOT USE IN HOUSE ATTORNEYS FROM REAL ESTATE AGENCIES! For obvious reasons, your realtor and their preferred attorney have conflicts of interest. A realtor does not get a commission if a deal does not happen. A preffered attorney for a realtor will not get future business if they do not collaborate with the realtor on problems. Your attorney will look out for your needs but must be independent with no conflicts of interest! Realtors will try to influence deals and push them through, hiding problems, and creating future issues which are passed on to YOU the new buyer.
■ The Colombian Foreign Investment Regulations – The first purchase in Colombia as a foreigner should always be done with someone who understands how to manage the handful of agencies involved in the transaction. If not you can end up with huge problems on your title, visa, and fines for tax evasion or money laundering. Most attorneys and realtors are not familiar with the big picture when it comes to Foreign investments. Correct planning must take place before you even send money to Colombia for purchasing real estate! This process is referred to as legalization of a direct foreign investment, but following traditional old fashioned realtors will get you in trouble as they usually are trying to avoid taxes at property closings. The government audits ALL foreign investments but most local transactions between Colombians are not audited, so Colombian custom is to claim 50-70% lower closing costs (final sale price). If you do this with a direct foreign investment the government will visit you in the future, and it will not be pleasant.
■ Review residential and commercial real estate contractual transactions for lots, commercial projects, pre-construction, and existing structures.
■ Negotiate the terms of real estate purchase contract, rental contracts, trasnsfer of rental contracts, loan pay-payoffs, property taxes, repairs, posessions, evictions and more depending on the particular case.
■ Draft and review contract(s) to purchase or sell property in Colombia, (compraventa/promesa de compraventa)
■ Review related documents, for example, property title history, clinton list and criminal history (criminal history and money laundering database check of past owners), rental contracts, grounds keeper labor contracts, Home Owner’s Association rules, financial reports for building administration.
■ Consider the use of an escrow account in Colombia for large real estate transactions.
■ Capital investments for commercial real estate developments or projects. Our real estate attorneys can assist in capital or lot for apartment deals.
Our attorneys also assist property owners with more complicated matters such as:
- Addressing zoning problems
- Property tax appeals
- Zoning Permissions, Residential or Commercial Use for Apartments, & Building Administration Rules (VERIFY AIR B&B Daily Rental Permissions Before you Buy!!!)
- Creation of property management corporations
Owners and renters alike should work with a local law firm to draft and/or review residential and commercial lease agreements. At COLOMBIA LEGAL & ACOUNTING S.A.S we can guide you through how to buy real estate in Colombia. We assist in rental and loan contracts as well.
While general real estate concepts are similar to those in many other countries, including the U.S., there are some very important differences in Colombian law. As a result, it is critical that you retain an experienced lawyer who knows the law, and the process on how to rent, purchase or sell real estate in Colombia, and who can explain these differences and how they may affect you.
The basic steps on How to buy Real Estate in Colombia are:
1. Open a personal Financial Account in Colombia – we can recommend the best places to establish your account and make the introductions for you.
2. Negotiate the property price and determine who will pay which closing costs and how taxes will be addressed – we suggest using a reputable Real Estate professional, such as Paradise Realty, to negotiate on your behalf in order to ensure the best price if you are dealing with a Colombian resident. Check out property for sale in Colombia here, and venta apartamentos en medellin.
3. Contract one of our real estate attorneys for title and property closing services – We will walk you through every step and ensure that you understand exactly what you are buying and how much you are paying.
4. Have the real estate attorney draft a purchase contract before you make a down payment to hold property.
5. Attend Property Closing & Make Final Payment – this will occur at a Notary’s Office.
6. Registration of Deed with the Proper Authorities.
The purchase of real estate in Colombia may qualify you for a Colombian Residency Visa under certain circumstances. We can explain the current requirements and assist with these additional steps if you are interested in obtaining a Colombian Residency Visa:
As part of purchasing a property with money from another country its very important to have a plan on how to legalize your foreign investment. James Lindzey overseas all foreign investment registrations with the help of our licensed Colombian attorneys, and Colombian accountants. Last but not least this step is very important if you want to comply with Colombian investor visa requirements. The basic outline for legalizing foreign investments are the following.
1. Registration of your Foreign Investment with the Colombian Federal Government at the time of the wire transfer-
2. Confirmation and certification of your Foreign Investment from the Government immediately following the registration of the wire transfer.
3. Processing the necessary immigration application documents to obtain a Visa with the ministry of foreign relations in Colombia.
Popular Property Closing Services in Colombia include:
Land Survey for individual homes with a civil engineer.
Property inspection performed by a civil engineer
Previous owner criminal background checks.
Verification Property is not on Government Clinton List.
Commercial Escrows & Construction Trusts
Verification of Residential & commercial zoning laws
Compliance with foreign investor laws
Living Trust to Protect your Property and Family.
Title compliance with the 2019 Ley de Financimento.
Review of Home Owner Administration Documents:
HOA Financial Reports
HOA Insurance coverage
HOA Property Bi-laws