Lush greenery and beautiful sandy beaches are just two of the reasons why investors are flocking to own a piece of tropical paradise in Colombia, South America. People in the U.S. and in any country foreign to Colombia, are free to purchase property as they wish in this country. If you’re ready to snag a piece of heaven to call home, or to diversify your investment portfolio, here is how you go about completing the real estate purchase process from start to finish:
Although you may have a tried and true real estate here in the U.S., these agents will not have the experience or qualifications necessary to complete a transaction in Colombia. Contact an agency in Colombia who have realtors familiar with the country’s legal process in purchasing a property.
Many Colombian banks are known to not issue mortgages to foreigners, however this does not mean it’s completely impossible to get one in this country. If you have the time, open a Colombian bank account and keep it active for a minimum of six months before applying for a mortgage. When reviewing your application for financing, banks will consider your history with the country, including how long the account has been open. Another option would be to contact international banks that have locations in Colombia, such as Citibank and HSBC, which are more likely to have experience with foreigners purchasing property.
Get the proper legal certificates.
Contact the registry office in the city you’re purchasing property in and purchase a Certificado de Tradición, which gives you a history of the property. Allow a lawyer familiar with local real estate law to study the property titles, and if everything seems to be in order, obtain a certificate from the municipality to state all taxes have been paid on the property. You will need to acquire the certificado de paz y salvo predial, which covers the aforementioned property taxes, and the certificado de paz y salvo de valorización, which deals with property value increases because of new construction or roads.
Contact the Notary.
The Notary must be involved with preparing the public deed, and typically charges a fee of 0.30% of property value. In real estate transactions, the notary retains 1% of the value of the purchase to be applied towards the retencion en la fuente (income tax). In order to obtain the public deed, you will need to bring the certified copy of the real estate tax paid on the property, the HOA fee good standing certificate and the appraisal good standing certificate, issued by the Urban Development Institute.
Registering the deed.
Once the deed has been prepared by the notary, register the public deed at the Registry Office and pay off the Impuesto de Registro (registry tax). After the deed has been registered, it is immediately transferred to process the ownership change.
Partner with your real estate agent to walk you through the steps above and if done properly the entire process starting with the collection of certificates should take no longer than three weeks to complete.