Property tax sale in Colombia (2025): Capital Gains and Withholding Explained

If you’re planning to sell a property in Colombia in 2025, it’s essential to understand how capital gains tax (ganancia ocasional) and withholding at the notary work — and how to declare everything correctly before the Colombian tax authority (DIAN).

Whether you’re a Colombian or a foreign property owner, this guide explains in simple terms how the tax applies, what rates are in force for 2025, and how to avoid penalties while optimizing your property tax obligations.

When Do You Pay Capital Gains Tax on a Property Sale?

When a natural person (individual) sells a property in Colombia, the sale may generate a capital gain (known as ganancia ocasional) if certain conditions are met.

To qualify as a capital gain — instead of regular taxable income — the property must have been held as a fixed asset for at least two years.

• If it was held for less than two years, the profit is taxed as ordinary income, with rates up to 39%.

   

• If held longer than two years, the profit qualifies as a capital gain, taxed at a flat 15% rate.

   

The taxable gain is calculated as the difference between the sale price and the adjusted fiscal cost of the property, according to Article 300 of the Colombian Tax Code (Estatuto Tributario).

What Is Considered the Fiscal Cost?

The fiscal cost (cost basis) of a property includes:

• The purchase value registered in the deed (escritura pública).

   

• Inflation adjustments (based on official CPI or cadastral value increases).

   

• Documented improvements made to the property.

   

• Special assessments or contributions (valorización) paid to the municipality.

   

This calculation ensures you pay taxes only on your real profit, not on inflation.

What Is the Tax Rate in 2025?

For 2025, the capital gains tax rate remains at 15% for both residents and non-residents:

• Residents: Article 314 of the Tax Code (as amended by Law 2277 of 2022).

   

• Non-residents: Article 316 of the same Code.

   

This is significantly lower than the progressive rates applied to ordinary income (up to 39%).

Withholding at the Notary (Retención en la Fuente)

When signing the property deed, the notary is required by law to withhold a percentage of the sale as an advance payment toward your final property tax.

Under Article 398 of the Tax Code, the withholding is calculated as follows:

• 1% on the first 10,000 UVT (~COP 498 million in 2025).

   

• 2.5% on any amount exceeding that threshold.

   

For properties that are not a primary residence, a general 2.5% withholding applies on the total sale value.

This amount is not an additional tax — it is a tax credit that can be deducted when filing your income tax return.

Exemption for Reinvestment in a Primary Residence

Article 311-1 of the Tax Code grants an exemption of up to 5,000 UVT (~COP 249 million in 2025) if you sell your primary residence and reinvest the proceeds in another home or use them to pay off your mortgage.

Conditions:

• The property sold must be your main home.

   

• The reinvestment must be made within two years after the sale.

   

• The exemption applies only to the net gain, not the full sale value.

   

Other Key Considerations

• Inheritance and donations: Article 307 covers certain exemptions, but they do not apply to standard property sales between living persons.

   

• Cash transactions: Payments made in cash above allowed limits are not recognized for tax purposes.

   

• Cost adjustments: The fiscal cost can be updated annually for inflation or cadastral value increases.

   

How to Declare a Capital Gain in Colombia

• Use Form 210 (for resident individuals).

   

• Declare the profit under the section “Ganancias Ocasionales” (Capital Gains).

   

• Apply the 15% rate on the taxable gain.

   

• Deduct the withholding certificate issued by the notary.

   

Practical Example

María, a Colombian resident, bought a house in 2016 for COP 250 million and sells it in 2025 for COP 600 million.
She invested COP 20 million in improvements.

• Adjusted fiscal cost: 250M + 20M = 270M * The fiscal cost can be adjusted annually based on a percentage set by the government.
• Gross gain: 600M – 270M = 330M
• Exemption for reinvestment: 249M
• Taxable gain: 81M
• Tax: 81M × 15% = 12.15M

The notary withheld:

Key Recommendations

• Adjust your fiscal cost accurately and keep supporting documents.

   

• Keep receipts for improvements and property upgrades.

   

• Verify whether you qualify for the primary residence reinvestment exemption.

   

• Declare the real sale price — undervaluing can lead to penalties.

   

• Keep the notary withholding certificate for your tax filing.

   

How Nexo Legal Can Help

Selling property in Colombia has important tax consequences that can easily be overlooked.

At Nexo Legal, we help you calculate your capital gain, apply all available exemptions, and file your tax declaration correctly — avoiding mistakes and unnecessary costs.

📩 Contact us today for a personalized consultation with our legal and tax team.

We’ll help you sell your property safely and stay compliant with Colombian property tax law.