ILN: BUYING AND SELLING REAL ESTATE - AN INTERNATIONAL GUIDE

[BUYING & SELLING REAL ESTATE IN COLOMBIA] 80

pubic notary will inquire which legal transaction is going to be held and request the documents required for each specific deal; in the case of the sale and purchase agreements, the required documents are: (i) No liens’ certificate ( certificado de tradición y libertad ) of theproperties involved in the transaction; (ii) Documents of existence and legal representation of the parties; (iii) Proof of payment of property taxes of the last five years; (iv) No debts certificate issued by the applicable tax authorities in relation to the properties; and, (v) No debts certificate issued by the administration when the properties are subject to the condominium regime. The deed process takes approximately 5 business days, and the notary fees are regulated by decree for the entire national territory. Afterwards, the public deed must be registered at the Registration Office to which the property is linked. 5. Registration Aspects: Public deeds in Colombia must be registered to considering transferred the property, because without registration there is no transfer of ownership rights. The registration offices are divided into registry circles that are distributed according to the location of the real estate properties. The purpose of the registration is to give knowledge to everyone about the transactions and legal acts that have been doneor that may affect the property. The registration process takes about 15 business days and its fees to register are set by the authorities at the national level, however, registration taxes must be paid as well, and they are set by each municipality government, so they may vary among municipalities. To register a deed, the first copy of the document issued by the Public Notary must be taken to the Registration Office of the circle to which

theproperty belongs with the proof of payment of the applicable registration fees and registration taxes. Once the Registration Office receives the documents, it proceeds with the registration after checking that everything was made accomplishing the applicable laws, if not, the Registration Office can make return notes indicating the motifs of such return and/or those aspects that must be corrected before presenting them again for registration. 6. Costs related to Real Estate Property: a. Property tax (Impuesto Predial): It is a tax that municipalities charge annually to real estate properties. In general, the tax authorities set the tax amount to be paid, however, sometimes there is a form of self- assessment in which the owners declare the value of the real estate to set the property tax to be paid, and the tax authority may present or not an objection to such value. b. Valuation contribution (Contribución porValorización): It is a tribute that eventually the municipalities charge when they are going to carry out public works that may increase the value of a property. For the State, it is a financing mechanism, and it is usually used to finance the construction of city infrastructure, among others, roads, bridges, and public spaces. c. Added value tax (Participación en Plusvalía): It is a tax charged when by means a public action the municipality generates the possibility that in a property the construction index raised, the destination of the land changed to a

ILN Real Estate Group – Buying and Selling Real Estate Series

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