[BUYING & SELLING REAL ESTATE IN COLOMBIA] 85
6. Costs related to Real Estate Property: a. Property tax (Impuesto Predial):
buildings subject to the condominium regime. This amount is intended to cover administration costs such as surveillance, cleaning, equipment maintenance or replacement, public utilities of the building, among others. e. Stamp Tax Since 2023, the collection of a national tax called stamp duty for the sale of real estate with a value defined by the National Tax Directorate was reactivated, a rate that is marginal and progressive. This tax must be financially assumed by the parties or by only one of them (according to what the parties establish) since the law does not establish an express form of distribution of the percentage to be paid. 7. Brokerage: The real estate brokerage contract has as object to put potential buyers and sellers in contact to enter a sale and purchase transaction over real estate. Brokerage is a partially regulated activity in Colombia; however, a license is not required to operate as a real estate broker. Commission rates are freely agreed by the parties but generally the commission is equivalent to 3% of the sale price of the property when located in urban areas and 5% when located in rural ones. It is not necessary to have a real estate agent, it is simply an additional activity. However, real estate agents serving under this kind of transaction may help to find the best property and to save time to complete it. ***
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 the such value. b. Valuation contribution (Contribución por Valorización): It is a tribute that eventually the municipalities charge when they are going to carry out publicworks 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 more profitable one or, the land is incorporated from urban-to-urban expansion. This tax is set only once by each municipality, and the law defines when its payment becomes enforceable to theproperty owner. d. Administration Fees: The administration fees are the amount charged to each private property under a building or a group of
ILN Real Estate Group – Buying and Selling Real Estate Series
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