In this article, we will indicate the specific steps to buy a Home/Property/Lot in Colombia, and the correct legalization of the currencies to obtain a type M Investment Visa (Property Owner) with a value greater or equal to 350 SMMLV (~$113,750 USD) or type M investment Visa (Foreign Direct Investment) 650 SMMLV (~$211,250 USD) according to the regulations of the Colombian Ministry of Foreign Affairs.
Before October 2022, it was possible to apply for a Resident Visa after investing more than 650 SMMLV. However, currently, regardless of the investment, foreigners will have to accumulate 5 years with a Type M visa before applying to become a permanent resident.
*The exchange rate used was 4000 COP per USD
What are the steps for the legal purchase of a Property in Colombia?
The first step to buying a property in Colombia is to establish a clear negotiation of the property to buy, verifying various legal issues of the property before making the purchase that we indicate below:
The Titles Inquiry (Estudio de Títulos), is the verification of the legal history of the property by analyzing the Tradition and Freedom Certificate (Certificado de Tradición y Libertad) of the property to buy, among other public documents.
In the Preliminary Study, the attorney reviews the Certificado de Tradición y Libertad to validate if it has affectations, encumbrances, domain limitations, resolution conditions, precautionary measures, etc. After that, in the Definitive Legal Study, professionals can review deeds, offices, judgments, and others to verify the ability of people in the property titling chain, that there are, among others, false tradition, huge injury, sale of something else, hidden defects, resolution conditions, etc. Review space and boundaries and, finally, support in the writing process.
What is the information you obtain in the Certificate of Tradición y Libertad?
With the Purchase and Sell Promise (Promesa de Compraventa) document, the completion of the business is guaranteed, containing clauses that allow the collection of sums of money through the criminal clause.
This document must be clear and express enough that it contains all the characteristics of the property and the business that it is intended to carry out; In addition, it is always advisable to be signed by a notary to give more formality to the process. Many times with this contract, a deposit agreement is also signed whereas a guarantee, an advance amount of money is agreed upon and delivered. It must be signed by the buyer and the seller, if in the case the buyer is not in the country, he must send an apostilled power of attorney and officially translated it into Spanish to a proxy.
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Once the Promesa de Compraventa has been made where the negotiation amounts and dates were agreed, the buyer must send the money on the agreed date to the seller directly from his home bank. In this step, two important documents are carried out to obtain the Investment visa type M (Property Owner) or type M investment Visa (Foreign Direct Investment).
Trading table and F4
Bank of the Republic of Colombia Certificate
The seller’s Bank receives notification from the buyer’s bank to negotiate the currencies and legalize them through the declaration form to exchange F4 for property purchase. The Banco de la República Certificate is the document issued by the Bank of the Republic, detailing the history of investments made by a foreign person in Colombia. The money sent from the bank of origin to the bank account must be in the name of the foreign person, and must be sent directly to the seller. Triangulations of money are not allowed, that is, the buyer cannot send the money to a bank account local in Colombia and then send it to the seller.
Foreign Investment Certificate Foreign
Certification issued by the Banco de la República, which is one of the ways to obtain a visa or Colombian residency depending on the amount of investment.
Foreign investment in Colombia is considered foreign capital investment in Colombian territory, including Colombian free zones, by non-residents in Colombia.
Principal documents
The copy of the current deed, the Promesa de Compraventa and The Certificado de Tradición y Libertad (Validity no longer than 30 days)
Taxes documentation
The last property tax canceled and valuation tax payment if the property has been valued. In the case of Bogotá Paz and except for recovery issued by the IDU.
Chamber of Commerce and others
Chamber and Commerce Certificate (Cámara de Comercio) if the property has a mortgage, and the Membership minutes, as appropriate.
Horizontal Property Certificate
A Copy of the horizontal property certificate.
Paz y Salvo and Cadastral Certificate
Payment solvency certificate (Paz y Salvo) payment of the administrator if it is in a horizontal property and National Cadastral Certificate indicating that the owner has the property registered in the cadastral database.
Personal documents
Photocopies of the seller’s and buyer’s cédulas, and manifestation of civil status.
POA and Elegibility
Power of Attorney, if needed, and Declaration of eligibility.
These documents must be filed so that the notary can prepare the public deed that takes between 1 or 2 working days to call the parties to sign (this is variable, according to the notary).
Regarding the notarial charges, the public deed is ready. The parties must approach the notary to sign and assume the deed expenses, which are generally divided equally between the seller and the buyer. The deed expenses are 0.54% of the sale value, and another value to be paid is the withholding tax, which is 1% of the sale value.
Formalization of the sale in the Public Instruments Registry Office (Oficina de Instrumentos Públicos).
When the notary has finished the Public Deed and the two parties have signed it, he will deliver an authenticated copy to the interested parties to deliver to the Oficina de Instrumentos Públicos (you can check the offices here). This act makes the buyer the owner, who, from that moment, must assume the property’s expenses.
When registering the public deed, the buyer only owns the property in said office. From this moment on, the property sale contract will have been officially perfected. It should be clarified that the sole celebration of the promise and subsequent purchase agreement does not improve the business or generate rights or obligations on the buyer’s part regarding the negotiated property.
The process of applying for an Investment visa type M (Property Owner) or type M investment Visa (Foreign Direct Investment) in Colombia is carried out before the Foreign Ministry of Colombia in Bogotá and once the visa is approved, the immigration certificate is requested before Migration Colombia of the corresponding city of residence and you can obtain your cédula de extranjería.
Download the OFFICIAL guide to request your Cédula de Extranjería
The requirements for applying for an Investment visa type M (Property Owner) or Type M investment Visa (Foreign Direct Investment) are as follows:
Investment Visa Property Owner
Time granted type M (Property Owner): from one (1) to three (3) years.
Investment Visa Foreign Direct Investment
Time granted type M investment Visa (Foreign Direct Investment): from one (1) to three (3) years.
What are the requirements to apply for the Investment Visa as a Property Owner?
Once the visa is approved, the Cédula de Extranjería must be requested on the Colombia Immigration page.
Do you want to get the step-by-step guide to apply for your Cédula de Extranjería?
At expatgroup.co, we know that it is essential to have everything in order so that you can access all the benefits as a foreigner in Colombia. Therefore, we invite you to fill in your information to obtain the step-by-step guide to apply for your Cédula de Extranjería.
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