BUYING PROPERTY IN COLOMBIA 2025

By direccioncomercial / 21 de February de 2025

Everything you need to know about buying property in Colombia in 2025

Investing in real estate in Colombia has become one of the most attractive opportunities for foreigners looking to diversify their portfolio and take advantage of the local property market.

Below, we provide a comprehensive overview of the 2025 real estate market, key investment considerations, and how to navigate the process safely.

A growing real estate market

Colombia offers a real estate market with great potential for investors. Factors such as urbanization, a growing middle class, and a booming tourism industry have driven demand for residential, commercial, and short-term rental properties, particularly in major cities like Bogotá and Medellín.

The residential sector leads the market, reaching a transaction volume of USD 1.63 billion in 2023, with projections of significant growth, positioning Colombia as a key destination for real estate investment.

Beyond its promising growth outlook, Colombia stands out for offering relative political and economic stability compared to other countries in the region. This, combined with a favorable legal framework for foreign property buyers, has attracted international investors.

The Colombian government has also implemented policies that facilitate foreign investment, reinforcing the country’s appeal as an ideal location to acquire real estate and diversify assets.

How to legally buy property in Colombia: A Step-by-Step guide

The process of buying property in Colombia differs from other countries as it lacks certain standardized structures, such as licensed real estate agents or a Multiple Listing Service (MLS).

This can create confusion, as the same property might be listed by multiple agents, complicating the search process.

For this reason, having the guidance of a law firm or a real estate attorney is essential. Here’s a step-by-step guide to purchasing property legally and safely in Colombia:

1. Opening a bank account

The first step for foreign investors is to open a personal financial account in Colombia.

This allows funds to be legally transferred through a foreign exchange intermediary, such as Bancolombia or Davivienda, ensuring compliance with local regulations.

However, due to anti-money laundering policies, some institutions restrict international wire transfers during the first six months.

An alternative is using exchange intermediaries such as Alianza Valores or Acciones y Valores, which allow international transfers immediately after opening the account.

Basic requirements to open a bank account:

Valid passport
Proof of funds origin documentation

These requirements ensure that institutions approve the account and allow the necessary money transfers for the property purchase.

2. Conducting a title search

Unlike other countries, Colombia does not have title insurance or an escrow system.

Therefore, hiring a real estate attorney to conduct a title investigation is crucial.

Your lawyer will review the property’s legal history and the seller’s background to ensure no legal issues exist, such as “extinción de dominio”, where the government can seize properties linked to illegal activities.

3. Negotiating the purchase terms

Work with your lawyer to negotiate and finalize the purchase contract terms, including:

Defining the property price
Setting a payment schedule
Agreeing on other key details

If you don’t speak Spanish fluently, be aware that negotiations often involve direct communication with the seller or their lawyer, which could present language barriers.

4. Drafting the purchase agreements

Your lawyer, experienced in foreign investment regulations, will draft and review the contract to ensure it complies with Colombian law and protects your interests.

5. Signing the deed and closing the transaction

This process takes place at a notary office, where the final payment is made and the necessary documents for the public deed are verified.

Additionally, you will need to cover remaining transaction costs, such as:

Notary fees
Government fees
Property-related expenses

6. Registering the deed

The final step is registering the deed with the Office of Public Instruments, ensuring the Liberty and Tradition Certificate (title) is properly recorded under your name.

Administrative costs associated with buying property

It’s essential to consider administrative costs, which are typically shared between the buyer and seller.

Common costs include:

Notary fees: ~0.29% of the property’s value
Registration fees: ~0.98% of the property’s value
Beneficence tax: ~0.6% of the property’s value
Document authentication costs: Including promise-to-purchase agreements, powers of attorney, and other certificates
Additional fees: Related to family asset cancellations, mortgages, or special cases

Investor Visa in Colombia

If you’re considering buying property in Colombia, your investment could also qualify you for an Investor Visa.

This visa allows you to legally reside in Colombia while taking advantage of real estate market opportunities.

Additionally, it enables you to accumulate time toward residency, as outlined in Article 90 of Resolution 5477 of 2022.

General Requirements for an Investor Visa

Visa Application Form: Complete the electronic visa application form on the official government website.

Digital Photo: A recent color photo with a white background, meeting size and resolution specifications.

Valid Passport: A passport with at least six months of validity, in good condition, with available pages for the visa.

Proof of Entry into Colombia: If applying from within Colombia, include a copy of the most recent entry stamp or authorization from Migración Colombia.

Colombian Property Tax and Investment Incentives

After understanding the steps to buy a property and the associated costs, it is important to know the tax obligations that come with being a property owner in Colombia.

One key aspect is the property tax, a yearly obligation that applies to both locals and foreigners. Additionally, the Colombian government offers tax incentives that can make your investment even more attractive, depending on the type of project and its location.

Property Tax Rates

Typically range around 1.6% of the property’s cadastral value
Rates depend on location, property usage (residential, commercial, etc.), and municipal regulations

For instance, urban properties in Bogotá or Medellín may have different rates than rural properties or those in smaller towns.

Real Estate Investment Incentives

The Colombian government offers tax incentives to promote investment in specific sectors, making it attractive to developers and investors:

Projects in Shopping Centers, Hotels, Offices, and Warehouses:
Projects built in municipalities with over 200,000 inhabitants can benefit from a fixed 9% income tax rate for the first 10 years.
In municipalities with fewer than 200,000 inhabitants, this benefit extends for 20 years.
Tourism and marinas:
- Projects like theme parks, ecotourism, agritourism, and marinas developed in municipalities with fewer than 200,000 inhabitants also qualify for the 9% income tax rate for 20 years.

Recommendations for Investors
To maximize the benefits of these exemptions and tax incentives:

Consult local authorities regarding the cadastral value and applicable rates.
Evaluate the eligibility of your project for the mentioned tax incentives.
Work with legal or tax professionals who are familiar with Colombian tax laws to ensure compliance and optimize your investment.

Types of Properties to Invest in Colombia

Real Estate Investment Trusts (REITs)
For those who prefer not to buy or manage properties directly, Real Estate Investment Trusts (REITs) are an attractive alternative. In Colombia, these funds, known as Fondos de Inversión Colectiva (FICs), have the additional advantage of being tradable on the local stock exchange, offering greater flexibility and accessibility to the real estate sector.
Real Estate Crowdfunding
Crowdfunding is gaining popularity as an innovative way to invest in real estate. Platforms like Bricksave allow investors to pool their money and collectively participate in real estate projects. This option is ideal for those who want to start with smaller investment amounts.
Strategic Alliances (Joint Ventures)
As a foreigner, you can partner with local developers or investors in real estate projects. This collaborative approach spreads risks and rewards, making it less intimidating for first-time investors. Additionally, having a local partner makes it easier to navigate the Colombian market.
Vacation Rental Properties
Given Colombia’s growing popularity as a tourist destination, investing in vacation rentals can be highly profitable. However, it’s essential to conduct detailed market analysis and understand the applicable regulations before committing to this option. It’s also recommended to hire a property management service to handle the rental process, from property promotion to guest services.

Types of Rental Properties in Colombia

Short-Term Rentals
Also known as vacation rentals or properties on platforms like Airbnb, these properties are usually rented out on a daily or weekly basis. They are especially profitable in tourist areas like
- Medellín: El Poblado and Laureles
- Cartagena: Getsemaní and Bocagrande
- Santa Marta: El Rodadero

Important note: In Colombia, many buildings have restrictions that require a minimum rental period of 30 days. It’s crucial to verify that the property legally allows short-term rentals, as renting without proper authorization could result in illegal activities.

Long-Term Rentals
These properties are typically rented on a monthly or annual basis, primarily to local residents or expatriates, including those looking for retirement options in Colombia. Foreign tenants generally need a cédula de extranjería (foreigner identification card) to rent long-term properties. Contracts can cover both residential and commercial properties, with durations ranging from six months to several years.
Commercial Rentals
These properties are intended for commercial activities, such as offices and retail spaces. Typically located in strategic commercial areas, lease terms may vary depending on the type of business and specific requirements of the owner.
Co-Living Rentals
Also known as co-living spaces, these properties are shared by multiple tenants and can serve residential or commercial purposes. They’ve become popular among students looking to reduce living costs and young professionals, offering a communal experience and the opportunity to meet new people.

Where to Invest in Colombia? Top Real Estate Markets

Colombia offers multiple attractive real estate investment opportunities, let’s examine some of the most popular ones:

Medellín: "The City of Eternal Spring"

Medellín is the second-largest city in Colombia and one of the country’s most dynamic real estate markets. Its pleasant climate, improvements in security, and advancements in infrastructure have positioned it as an attractive destination for both local and foreign investors.

Characteristics of Medellin’s real estate market

Price per Square Meter: Prices per square meter in Medellín vary significantly depending on the neighborhood and demand in each sector.

For example, El Poblado, the most exclusive and expensive neighborhood in the city, has prices ranging from 11 to 12 million COP per square meter for new apartments.

In contrast, in Sabaneta, an expanding area, the price for a new apartment can be around 7.5 million COP per square meter.

- Sustainable Trends: There is growing interest in modern housing with green spaces and eco-friendly features.
- Mixed-Use Developments: Projects that combine commercial and residential spaces are gaining popularity in Medellín.

This trend is largely due to the increasing presence of digital nomads and the rise of remote work, which has changed the way people live and work.

Tourist Rentals & Hospitality: The tourist rental and hospitality sector continues to thrive, especially in areas such as El Poblado and Laureles, where tourists and digital nomads prefer to stay.
Annual Price Growth: Medellín’s real estate market continues to show consistent price increases, with an average annual growth of 10%.

Profitability

Medellín offers rental yields ranging from 6.33% to 10.32%, making it one of the cities with the highest return on investment in Colombia.

Cali: A Market in Constant Growth

Cali’s expanding economy and growing middle class have driven demand for both residential and commercial properties, making this city a stable option for real estate investment.

Characteristics of Cali’s real estate market

Residential Sector: Options range from high-rise apartment buildings to traditional houses.
Affordable Opportunities: Neighborhoods like San Fernando and San Antonio offer more budget-friendly options.
Commercial Sector: Demand for office spaces and commercial premises has increased in districts such as Ciudad Jardín and El Peñón, where modernity and functionality are priorities.

Profitability

Rental yields in Cali range between 3.88% and 8.62%, making it a solid choice for long-term investments.

Additional advantages

Cali benefits from ongoing infrastructure projects, including road expansions and public transportation improvements, which support the city’s economic growth and expansion.

Bogotá: An International Investment Hub

As the country’s capital, Bogotá attracts investors from around the world, particularly from the United States, Canada, and Spain. Its economic stability and growth potential make it a key destination for real estate investment.

Characteristics of Bogota’s real estate market

Residential Sector: Offers a variety of properties, ranging from affordable housing to luxury apartments.
Commercial Sector: Areas like El Chicó, Santa Bárbara, and La Cabrera stand out for their office spaces and commercial developments.
Development Projects: The city is experiencing a boom in residential and commercial construction, with an increasing focus on mixed-use developments that combine residential, commercial, and leisure spaces.

Profitability

Bogotá offers gross rental yields of around 7.15%, with administrative costs estimated at 2% of the yield. Despite this, Bogotá remains a city with competitive prices and strong return prospects for investors.

The Legal Aspects of Buying Property in Colombia

Understanding and navigating the property purchase process in Colombia can be complex, especially for foreign buyers.

At Nexo Legal, we are here to guide you through every step, ensuring a clear and hassle-free process.

Why Choose Nexo Legal for Your Real Estate Investment?

At Nexo Legal, we make investing in real estate in Colombia a seamless and secure experience. Our deep understanding of local legal systems and real estate regulations allows us to offer you comprehensive support throughout the process. From property search to final ownership, we guide you every step of the way, ensuring all aspects are covered.

With our subsidiary, Loyalty Advisors, we assist you in finding and negotiating properties that align with your goals. We also offer full legal assistance, handling everything from the initial stages to the closing, including property transfers and required documentation.

Specific services we offer include:

Risk Assessment and Property Verification: We identify stakeholders and assess risks associated with the property to ensure a smooth transaction.
Property Evaluation: We review valuations, limitations, and records that could affect the acquisition process.
Title and Ownership Review: We verify property listings, ensuring no issues related to SARLAFT (anti-money laundering), and ensure clean criminal or disciplinary histories to avoid future complications.
Contractual Advice: We help with negotiating and drafting contracts, including the promise agreement and public deed clauses, ensuring your legal and financial interests are protected.
Transaction Facilitation: Our team assists with notarization and registration, ensuring all requirements are met with accuracy.
Final Delivery Assistance: We guide you through the final steps to receive your property.

If you’re looking to explore Colombia’s exciting real estate opportunities, Nexo Legal is here to help. Request a free consultation today and take the first step towards securing your investment in Colombia.

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Medellín, Colombia