Closing costs when buying property in Colombia: who pays what

The price on the listing is not the price you pay. In Colombia the transfer is signed before a notary and recorded at the public registry, and each step carries a fee or a tax. Budgeting for them in advance avoids the most common surprise for foreign buyers: a transfer that cannot be completed because the funds for the deed were never wired.

The four costs of the deed

• Notary fees (derechos notariales): a regulated percentage of the deed value plus VAT, usually split 50/50 between buyer and seller.
• Registration tax (impuesto de registro or beneficencia): charged by the department, normally paid by the buyer.
• Registry fees (derechos de registro): paid to the Oficina de Registro to record the new owner, normally paid by the buyer.
• Withholding tax (retención en la fuente): 1% of the sale value, paid by the seller when the seller is an individual.

As a working rule, set aside roughly 2% to 3% of the price for the buyer's share of closing costs. The exact figures depend on the department, the declared value and the notary, so ask for a written settlement (liquidación) from the notary before you sign.

Ask the notary for the liquidación at least a week before the signing date. It is a single page, and it tells you exactly how much must be in Colombia, and in which account, on the day.

Costs beyond the deed

• Registration of the foreign investment with Banco de la República, through your exchange intermediary — no fee from the bank, but your intermediary may charge one.
• Legal review of the title and the promesa de compraventa — a fixed fee agreed with your lawyer.
• Property tax (predial) and administration fees from the handover date — prorated between buyer and seller.
• For off-plan purchases: the fiducia charges nothing to the buyer, but the deed costs arrive at handover, sometimes years after the reservation.

How to avoid surprises

Get the promesa de compraventa to state who pays each item, in writing. Wire the closing costs together with the last instalment, through the same registered channel, so that the money for the deed is also part of your declared investment.