What taxes do you have to pay if you own a property?

Property tax, known as impuesto predial, is an obligation that all real estate owners in Colombia must comply with. This tax is calculated based on the cadastral appraisal, the value assigned to the property by the cadastral authorities. This rate varies depending on the municipality and the use of the property, whether it is residential, commercial, or industrial, etc. In addition to property tax, owners must also consider filing an income tax return if the property generates income or is sold at a profit. Understanding how these processes work is important in order to keep up with tax obligations and avoid possible penalties. Here we tell you more about the taxes you must pay if you own property in Colombia.

How to calculate property tax?

Property tax in Colombia is calculated based on the cadastral appraisal of the property, which is the value assigned by the local cadastral authorities. This takes into account the size of the land, the built area, existing buildings, and the characteristics of the area. It is important to note that this value may be adjusted periodically by the relevant entity. It is important to mention that houses, apartments in buildings, lots, farms, utility rooms, parking spaces, commercial premises, warehouses, factories, and even rural properties used for agriculture are considered properties for property tax purposes.

Tax rate: Each municipality has the authority to set its own rates, which may vary depending on geographic location, property type, and other local considerations. Generally, this ranges from 0.1% to 3.3% of the assessed value.

Socioeconomic class: The stratum of the apartment for sale in Medellín or other properties and areas of the country influences the tax. Rates are usually lower for properties in lower strata, while properties in higher strata may have higher rates.

Tax calculation: Property tax is obtained by multiplying the cadastral appraisal by the corresponding tax rate.

For example, if a property has a cadastral appraisal of $200 million and the rate is 1%, the property tax would be $2 million per year.

Discounts: Many municipalities offer discounts if the tax is paid on time. It is important to keep up with this obligation, otherwise fines and interest may be incurred.

Does income tax and capital gains tax also apply?