February 27, 2023
In order to buy a property in Colombia, it is necessary to comply with a series of requirements, including notary fees, tax payments, among others. Additionally, the buyer must be aware of the rights and obligations acquired at the time of entering into the purchase contract.
The process of buying a property in Colombia is the same for both nationals and foreigners. The purpose of this article is to provide information on all the aspects that a foreigner must take into account when buying a real estate property in the country and its respective procedure.
At AGT Attorneys, we have lawyers with expertise in Civil Law who can provide advice in relation to the drafting or review of purchase and sale contracts. If you wish accompaniment for the purchase of property in Colombia do not hesitate to contact us in the following Contact Form or through our WhatsApp number +57 310 5706331.
The civil sales contract is regulated by article 1849 of the Civil Code. It establishes that one of the parties is obliged to give a thing and the other to pay for it in money. Therefore, this contract gives rise to two obligations on the seller's head: to give the domain of a property and to repair the hidden defects of the property. On the other hand, the buyer is obliged to pay the agreed price for the property.
It should be noted that, according to article 1602 of the Civil Code, every legally celebrated contract is law for the contracting parties, and cannot be invalidated except by their mutual consent or by legal causes. These legal causes, referred to in the article, refer to the vices of consent that may affect the birth of the legal act, such as, for example, ineffectiveness.
The promise contract is a preparatory contract. This means that it is made before the execution of the sales contract in question in order to establish the conditions of the contract and the security of the legal business. By means of the promise, a date, and place is fixed to celebrate the sale contract, thus generating certainty of the sale contract that is intended to be made. The requirements for the promise are found in article 1611 of the Civil Code.
In order to buy property in Colombia, you must have legal capacity. In relation to the legal capacity, this is initially possessed by all natural people, presumably, and allows them to create, modify or extinguish legal relations in an autonomous and voluntary manner. In other words, people are holders of their rights and obligations, therefore they can exercise them and in case they are violated, go to the authorities and claim them.
According to article 1503 of the Civil Code, there is a legal presumption that every person is legally capable. Therefore, depending on each case, it must be determined whether the person has the legal capacity to enter into the legal transaction. However, in general, any person over 18 years of age with legal capacity can enter into a contract of sales of property in Colombia.
On the other hand, the purchase of property in Colombia for foreigners is very common and easy. Foreigners who want to buy real estate in the country have the same rights as a Colombian national, so they must meet exactly the same requirements without additional financial burdens. In spite of the above, this purchase will be registered as a foreign investment, so it must be made through an agent of the foreign exchange market. The foreigner must have a valid passport and the resources required for the purchase and sale.
If you are considering acquiring property in Colombia, at AGT Attorneys we have legal specialists who will help you draft all the necessary documents and contracts to acquire your real estate. You can fill out this Contact Form or write us to our WhatsApp number +57 310 5706331.
This list of documents will be essential when buying a property in Colombia, due to the procedures involved. The documents included in the list may vary depending on whether you are buying a horizontal property or not. Please note the following documents for buying property in Colombia:
The above-mentioned documents will be essential for a successful purchase of property in Colombia. However, this list is not exhaustive and will determine in each case which documents will be required. For example, in cases where foreigners are the ones acquiring the property, a photocopy of the citizenship card should not be attached, but a photocopy of a valid and current passport.
A foreigner can buy property in Colombia through a sales contract, agreeing to everything regarding the property, especially the price with the seller. In our firm AGT Attorneys, we recommend that the buyer has the legal advice of experts in real estate purchase, in order to analyze in detail the legal status of the property to be purchased, by reviewing the certificate of freedom and tradition.
The certificate of freedom and tradition is a document issued by the Superintendence of Notaries and Registry, which records the entire history of the property from the moment it was registered in the Public Instruments Registry Office. This certificate also allows identifying details of the property, information about the construction, chronological order of the owners, the existence or not of mortgages, liens, and other circumstances. This is essential when buying a property in Colombia in order to analyze its viability and avoid future problems.
In Colombia, a promise of sale contract may be previously executed. Article 1611 of the Civil Code establishes the requirements to be able to demand its fulfillment: The promise must be in writing; the promise must contain a term or condition that establishes the time in which the contract is to be executed; the contract must be determined in such a way that in order to perfect it, the only thing missing is the tradition of the thing or the legal formalities and; lastly and most importantly, the person executing the promise must not be declared ineffective by law.
One of the many benefits of the promise of purchase and sale is that the parties may establish a penalty clause, which has as its purpose the payment of damages by whoever breaches the respective promise of sale. In the case of purchase by foreigners, this document, since must be signed by the buyer and the seller, if the buyer is outside the country, an apostilled power of attorney must be sent.
It is crucial to take into account that, in order to perfect the sale of real estate, a public deed must be granted. The public deed is a public document in which the notary certifies the execution of the contract with the fulfillment of the requirements demanded by law.
Once the public deed of sale has been formalized, the buyer must duly register it at the Public Instruments Registry Office in order for it to take effect. It should be noted that the law establishes a term of 2 months following the date on which the public deed was granted to carry out the due registration.
When the purchase is made from abroad, the person has two options to make the purchase:
The total amount of the price must be deposited or transferred to the bank account of the seller or owner of the real estate. At AGT Attorneys, we recommend foreigners to open a bank account in Colombia, in case they have a foreigner identification card, in order to make the necessary transfers in Colombian pesos during the complete sale process.
As mentioned above, this purchase of property in Colombia by foreigners is understood as foreign investment, therefore, it will be necessary, depending on the case, to fill out a form declaring the international investment or the issuance of a Certificate of Foreign Investor issued by the Bank of the Republic.
If you are a foreigner and want to buy property in Colombia, contact us through our Contact Form or our WhatsApp +57 310 5706331. Our specialized lawyers will be able to provide you with excellent guidance in your process of registration of foreign investment and purchase of property in Colombia.
Buying a property in Colombia implies assuming some expenses at the time of formalizing the sale before a public notary. In the first place, the execution of the public deed generates a cost that must be assumed by both parties, buyer and seller in equal parts. Secondly, the registration of the public deed of sale at the Public Registry Office of Public Instruments generates a cost for the buyer at the moment he/she carries out the procedure. In addition, he will be in charge of the payment of the registration tax.
On the other hand, Article 398 of the Tax Statute establishes the withholding in the sale of fixed assets of individuals, i.e., in the case of the sale of real estate, if the seller is an individual, he/she must pay 1% of the value of the sale as withholding tax to the notary, who acts as a withholding agent.
Finally, it is important for the buyer to be aware of the obligations that come with buying property in Colombia, such as: The payment of the annual property tax on the real estate by the simple fact of owning the property and, for being within the respective municipality or district. In addition, the owners must make the monthly payment for public utilities (water, electricity, gas).
In AGT Attorneys, we take care of advising the purchase and sale, whether civil or commercial, of properties in Colombia. We prepare, review and adjust the respective sales contract and gather all the documentation so that you as a foreigner can carry out the process correctly.Facebook AGT Attorneys and Twitter @AttorneysAGT
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