Buying property in Colombia is a momentous decision that involves many factors.

In 2025, the real estate market presents opportunities, but also risks that are worth avoiding.

Real estate investment in cities such as Medellín, Bogotá, Cartagena, or Cali has attracted both nationals and foreigners, who see in the country an option for good profitability and quality of life.

However, the lack of proper information and ignorance of the legal, financial, and migratory framework have led many people to make serious mistakes.

Among the most frequent mistakes are:

• Not planning personal finances: committing without calculating income, expenses, and debts can lead to over-indebtedness. As experts recommend, the mortgage payment should not exceed 30% of monthly income.
• Ignoring the type of housing: not knowing the differences between VIS (Social Interest Housing) and non-VIS can cause you to miss out on benefits such as government subsidies to programs like “Mi Casa Ya.”
• Not reviewing the property documentation: acquiring without consulting the deed, the Certificate of Tradition and Freedom (mortgages, liens), or the construction license of the project is very risky.
• Neglecting professional advice: working with informal agents or intermediaries without legal registration increases the risk of fraud. Not having a real estate lawyer from the beginning can also leave the buyer defenseless against abusive clauses.
• Underestimating additional costs: forgetting to include notary fees, registration, property taxes, insurance, administration, or renovations can ruin the budget.
• Buying on impulse or without a clear purpose: choosing a property only for its immediate features, without analyzing the area, appreciation, or purpose (living, renting, vacationing, etc.), often leads to poor investment choices.
• Ignoring contextual risks: fluctuations in exchange rates, changes in land laws or interest rates, and natural risks (floods, earthquakes) can also affect investment.

Below we expand on these points and give you concrete and useful advice to avoid them.

Planning Finances and Budget

Before looking for properties, carry out a complete financial analysis.
Calculate your net income, fixed expenses, and possible debts.
The monthly installment of a mortgage loan should not exceed 30% of your monthly income. This prevents long-term over-indebtedness.

Also, compare the interest rates offered by banks: choose the one with the lowest financial burden (fixed or variable) according to your needs.

– Set aside a contingency fund: in addition to the installment, save money for unforeseen events (repairs, extra expenses, etc.). This way you’ll avoid falling into debt in case of any emergency.

– Do not commit more than you can afford: if your real budget does not reach the ideal home, consider more affordable options or subsidies. Many families mistakenly believe they qualify for programs like “Mi Casa Ya,” but these require incomes lower than 4 or 7 minimum wages, depending on the case. Check with a lawyer or expert if you meet the requirements before assuming that the subsidy applies.

👉 Foreign focus: unlike the U.S., where banks relatively easily offer mortgages to non-residents, in Colombia obtaining financing as a foreigner is much more limited. Most must pay in cash or bring funds from abroad, which implies managing the exchange rate correctly and registering the investment as foreign capital.

Understanding the Market and Type of Property

Research the local market and the type of property you are looking for. Colombia offers VIS (Social Interest Housing) and non-VIS, each with different conditions and subsidies. Not investigating these differences can make you lose government support or tax advantages.

It is also advisable to study the area where you want to buy: prices vary greatly.

For example, in Medellín (one of the most dynamic markets in 2025), neighborhoods like El Poblado, Envigado, and Laureles have very high values (between COP $7–12 million per m²), while emerging areas such as Sabaneta, Itagüí, or Belén offer lower prices (~COP $4.8–7.5 million/m²).

– Study the area: beyond how nice the property looks, check the historical and future appreciation of the area (proximity to metro stations, new roads, services). A well-located project can appreciate annually in the order of 5–10%. Avoid buying property in Colombia in areas with a tendency toward saturation or massive tourism projects that may inflate prices.

– Emerging markets: if the budget is tight, consider neighborhoods or municipalities in expansion, where appreciation is expected (such as Belén or La América in Medellín). Another alternative is the assignment of purchase rights in projects already underway, which are usually more economical.

👉 Comparison with the U.S./Europe: in markets like Miami or Madrid there is a centralized MLS and exclusive listings. In Colombia, there is not, which creates confusion and different prices. For a foreigner, this difference is one of the main cultural shocks when buying property in Colombia.

Reviewing Legal Documentation

Do not close a deal without reviewing all the documentation. Ask the seller for the public deed and Certificate of Tradition and Freedom, which details mortgages, liens, or foreclosures.

Also, check that the project’s plans and licenses are approved by the corresponding urban curatorship.

Do not pay installments based only on brochures or renders; demand official documents that endorse the construction permits.

Read and understand contracts: especially the promise of sale. Many people sign without understanding clauses of termination, penalties, or guarantees. Have the contract reviewed by a real estate lawyer before signing (this way you avoid abusive clauses or unpleasant surprises later).

Update your personal documents: if you are a Colombian abroad, keep your ID, passport, and income certificates up to date. These procedures may take longer from outside the country, but without them, you will not be able to sign deeds or obtain the mortgage loan.

Title Study and Asset Forfeiture (Extinción de Dominio)

A clean Certificate of Tradition does not guarantee that the property is risk-free. In Colombia, it is mandatory to carry out a title study of at least 20 years to verify the chain of owners and possible irregularities.

In addition, there is the figure known as extinción de dominio (asset forfeiture): if a property was acquired with illicit resources or used for illegal activities, the State can recover it without compensating the buyer. This applies even if you bought in good faith.

That is why it is essential to have a lawyer investigate both the property and the seller.

Having Reliable Professional Advice

Seeking professional and certified help is essential. Do not be swayed by informal offers on social networks or people without registration: buying property in Colombia through uncertified intermediaries increases the risk of fraud.

It is better to go to recognized real estate agencies or local licensed agents, and always demand clear contracts.

A local advisor knows the dynamics of the market and can anticipate risks that a foreign buyer might overlook.

Including All Costs in the Budget

Buying property involves more than just the sale price. In addition to the down payment and the loan, consider additional costs such as:

• Taxes and notary fees: Registration Tax, Stamp Tax (if applicable), notary fees, title study, appraisal, etc.
• Property Tax (Predial): paid annually to the municipality according to cadastral appraisal.
• Home insurance: mandatory when financing, protects against damages.
• Administration fees: if you buy an apartment in a residential complex, there will be a monthly payment for common areas.
• Renovation or adaptations: almost always new housing requires adjustments before moving in.

Ignoring these items can unbalance your budget. According to experts, it is prudent to reserve at least 5–10% additional of the purchase value to cover extra expenses.

Defining the Purpose and Location

Before finalizing the purchase, be clear about the future use of the property. Will it be your permanent residence, a vacation home, or a rental property? Each goal has different requirements.

Likewise, analyze the environment and services: security, access roads, public transport, schools, or health centers in the area. A nice apartment does not guarantee a good investment if the neighborhood has high social risk or no projection of appreciation.

Considering Regulations and Additional Risks

Colombia does not restrict foreigners from buying property in urban housing, but there are special regulations in some cases. For example, it has been proposed to limit the purchase of rural land by foreigners to 15% of the municipal rural area. Although this bill is not yet in force, it is a sign that legislation could change.

Other risks include: exchange rate fluctuations, changes in interest rates by the Central Bank, and natural risks such as floods or earthquakes.

Considerations for Foreigners: Visas and Residency

Many foreigners buy property in Colombia also thinking about the possibility of obtaining migratory status. Here frequent mistakes arise:

• Believing that any property purchase automatically grants a visa.
• Not registering foreign investment at the Bank of the Republic within three months following the transfer.
• Buying below the required amount (~USD 90,000 for investor visa in 2025).
• Putting the property in someone else’s name or in a company without the proper structure.

Options valid in 2025

• Investor Visa in Real Estate (Type M – Real Estate): requires a minimum investment of 350 SMLV (approx. USD 90,000). Valid for up to 3 years, renewable.

FAQs on the M – Real Estate Investment Visa

• Can I buy property in Colombia as a foreigner without a visa? Yes. You can buy with just a passport, but for the purchase to serve as visa support, it must be registered as foreign investment.
• How does my tax residency in Colombia affect this? If you become a tax resident, your investment no longer counts as “foreign” and is not eligible for the M Visa.
• Can I buy with another person and both apply? No. The property must be exclusively in the name of the main applicant. Beneficiaries can obtain derivative visas.
• How much exactly must I invest? The minimum is 350 SMLV, which in 2025 equals $498,225,000 COP (~USD 120,000). It is recommended to buy for a value higher than the minimum to ensure renewals.
• How should funds be transferred? The transfer must be made through an authorized exchange intermediary and registered with the Bank of the Republic.

Requirements to Apply for the M – Real Estate Investment Visa in 2025:

• Valid passport.
• Public deed and Certificate of Tradition and Freedom.
• Certificate of foreign investment registration (Bank of the Republic).
• Exchange transaction receipts.
• Proof that the investment value exceeds 350 SMLV.
• Proof of family members (if applicable).
• Health insurance with coverage in Colombia.
• Payment of study and issuance fees.

👉 Key tip: many foreigners fail because they buy below the threshold, register the investment late, or put the property in the name of a poorly structured company.

How to Buy Property in Colombia: Step by Step

If you are coming from the U.S., Canada, or Europe, get ready: the Colombian system works very differently.

• No MLS (Multiple Listing Service).
• No escrow.
• Agents are not licensed.

👉 That’s why it is essential to have a specialized real estate lawyer.

Below we give you a step-by-step guide of the property purchase process in Colombia, useful for both locals and foreigners.

Step 1. Open a channel for funds

Ensure that your money enters legally and is registered.

• Colombian bank account.
• Authorized exchange intermediary.

Step 2. Title review and due diligence

Without title insurance, the review depends on your lawyer.

• Property history (20 years).
• Liens, foreclosures, inheritances, asset forfeiture.

Step 3. Negotiate terms

Price, deadlines, conditions (e.g., furniture).

Step 4. Purchase agreement

Binding, with price, responsibilities, and penalties.

Step 5. Closing and notarization

Signature at notary, payment of balance and fees.

Step 6. Registration and ownership

Registration at the Office of Public Instruments and obtaining the Certificate of Tradition and Freedom.

Closing Costs for Buyers in Colombia

💡 These expenses represent approx. 50% of the total. The seller covers the other half.

Taxes as a Property Owner

Many investors believe the process ends once the deed is signed. But being a property owner carries ongoing tax responsibilities.

The most important is the Property Tax (Impuesto Predial)—a local property tax paid annually.

The rate varies between 0.3% and 1.6% of the cadastral value, depending on:

• Property location
• Use (residential or commercial)
• Municipal regulations

Be sure to include this in your long-term investment plan.

Conclusion

The most important recommendation we can make to avoid these common mistakes is, ultimately, to stay informed and have professional support.

Review each stage of the process: plan your money, seek legal advice, verify every document, and analyze the area thoroughly.

At Nexo Legal we can help you with the legal process of your property purchase in Colombia.
Our team can guide you from negotiation to the signing of the deed, minimize risks such as asset forfeiture, and ensure that your investment also serves as the basis for a solid visa.

👉 Don’t put your assets or your future in Colombia at risk.
Contact us and secure your investment with confidence and professional support.