Sell Colombian Property and Repatriate the Money

Selling a Colombian property is, legally, the purchase process in reverse: a promesa, an escritura pública at a notary, and registration. What makes it harder for foreign owners is the end of the road — turning pesos back into dollars and getting them out of Colombia cleanly, with taxes settled in both countries. Most of the hard work should happen months before you list. This guide covers the main pieces.

1. Start with your foreign investment registration

If you bought with money you brought in from abroad, the most important document for repatriation is the evidence that your purchase was registered as foreign investment with Banco de la República — typically the exchange declaration (declaración de cambio) or certificate from the bank or intermediary that handled your wire. That registration is what supports sending the sale proceeds abroad through the exchange market as a return of your foreign investment. The rules live on Banrep's international investment regime page and exchange regulation page, with an overview in its general description of the exchange regime.

• Find your declarations now. If the bank you used has merged or your agent handled it, request copies.
• Check that the investor named in the registration is the same person or company on the certificado de tradición y libertad.
• If something is missing or wrong, talk to a Colombian exchange-law specialist before you sign with a buyer. Corrective procedures exist but depend on your facts and on the current regulation. See our registration guide.

2. Clear the property for sale

Buyers and notaries will expect:

• A current certificado de tradición y libertad, free of unexpected liens.
• Proof that impuesto predial is paid (paz y salvo) — see our predial guide — and any valorización charges settled.
• A paz y salvo from the building administration for administración fees.
• Utility bills up to date.
• Cancellation of any mortgage, coordinated with the lender.
• If a tenant is in place, a plan consistent with the lease.

3. Colombian tax on the sale: ganancia ocasional

For individuals, gain on the sale of a fixed asset such as real estate that was held for at least the minimum period set in the Estatuto Tributario is generally taxed as ganancia ocasional (occasional gain), a separate category from ordinary income with its own rate. Property held for a shorter period may instead be taxed as ordinary income. The gain is broadly the sale price minus your tax cost (costo fiscal), which Colombian rules may allow to be adjusted. There is a home-sale exemption for individuals, but it is conditional: the sale proceeds must be deposited in an AFC (Ahorro para el Fomento de la Construcción) account and used to buy another home, or paid directly toward the mortgage on the home sold; withdrawing the money for any other purpose loses the benefit. If you plan to take the proceeds out of Colombia, do not assume the exemption applies. We don't list rates, holding periods or exempt amounts here because they have changed with recent tax reforms; confirm the rules in force in the year of your sale with your contador and DIAN's guidance.

Two practical points for foreign sellers:

• Withholding at the notary. Sales of real estate by individuals are commonly subject to withholding at source (retención en la fuente) collected when the escritura is signed. Ask your contador how it applies to you and how it is credited against your tax.
• Filing. Even as a non-resident, you may need a RUT and a Colombian return for the year of the sale; withholding may or may not fully settle the tax. See Colombian income tax for foreigners and DIAN's individuals section.

Colombian documents that prove your tax cost — the original escritura, the registered certificate, receipts for improvements and closing costs — matter here. The price stated in your original escritura is the anchor, which is why under-declaring a price when buying can hurt you when selling.

4. Getting paid and moving the money out

1. Agree in the promesa how the buyer pays: typically into your Colombian account, or by a mechanism your lawyer specifies. Avoid side payments outside Colombia — they break the paper trail that supports your outbound transfer.
2. After the escritura is registered and funds are received, instruct your bank or exchange intermediary to convert and transfer abroad. The outbound exchange declaration should reflect the return of your registered foreign investment.
3. Expect the bank to ask for supporting documents: the escritura of sale, your original investment registration, ID, and tax documents. Ask the bank for its list early.
4. Keep copies of every outbound declaration, the conversion receipt and the SWIFT confirmation.

5. The US side (for US persons)

US citizens and residents report the sale on their US return. Gain is computed in dollars: your dollar cost basis (generally fixed by the exchange rate when you bought, plus improvements), less depreciation allowed or allowable if you rented the property, compared with the dollar amount realized at sale. Currency movements can create a US gain even when the peso price barely changed, or reduce it. Colombian income tax on the gain may qualify for the foreign tax credit via Form 1116, subject to the limitation rules in Publication 514. See Publication 544 for sales of assets and our US reporting guide. If proceeds sit in a Colombian account at any point in the year, remember your FBAR and Form 8938 obligations.

6. Timeline

• Months before listing: locate investment registration, pull a certificate, check predial and administración, meet your contador and US preparer.
• At promesa: payment mechanics, who pays which costs, withholding handled at the notary.
• At escritura: paz y salvos, withholding, registration.
• After registration: convert and transfer abroad; file Colombian and US returns for the year.

Frequently asked questions

Why review investment registration before selling?

The registration supports sending sale proceeds abroad as a return of foreign investment. Missing or incorrect records should be reviewed with an exchange-law specialist before signing with a buyer.

Which clearances should I prepare for a sale?

Prepare a current certificado de tradición y libertad, predial and building administration clearances, and proof that utilities and any valorización charges are settled.

What records should I keep after sending sale proceeds abroad?

Keep the outbound exchange declarations, conversion receipt and SWIFT confirmation.

Not sure where you stand? Take the quiz. The Colombia Owner Kit (US$79, founding pre-order) turns this guide into a checklist, a calendar entry and a question list: see what’s included.