Colombia Real Estate Closing Costs
Questions and Answers.
If you are planning to buy or sell a property then you should make yourself aware of what the approximate costs of a real estate closing in Colombia will be.
Above your attorney fees you will have your notary costs, adjustments of condo fees, taxes and utilities. Additionally in Medellin there is a Valorization Tax as well. See link below.
Lawyer's fees may vary widely. As anywhere else, cheap is not the best. A more thorough attorney normally will charge accordingly. Don't make that assumption. I have been quoted up to 1.500.000 COP just for a title search.
Some of the questions before you consider hiring a lawyer for your closing, should be:
1) How far back do they research the title ?
2) Do they research the history of the previous owners ?
3) Do they do an inspection and a formal handing over the property immediately prior to the final closing ?
4) What do their fees include ?
Point 2 is an interesting question. There is a law in Colombia that allows the government to take any property that has been proven to have been in the ownership of any individual or company participating in illegal activities. This is a frightening aspect to some buyers due to the history of this country. However, if you have taken the time to hire a good lawyer and they can prove that they have done due diligence on your behalf, then your property is protected. I can assure you that many law firms do not do this so make certain that you are provided this service.
For the ''do-it-your-selfers'', it may be fine to manage your real estate transactions in your home countries if you are so inclined but if you can afford to travel to Colombia, the legal fees will be well worth it. Don't skimp here. I have seen properties that have been sold here, many times with unresolved issues still sitting on the title - some up to 35 years. Your thoughts might be if it has sat there so long, then why should I worry ? The answer is sooner or later the problem will rear its ''pretty little head'' and you might be the one to carry its burden. The title search is meant to protect you as the buyer. If you have hired a thorough attorney and they discover a problem, it will be resolved at the seller's expense.
Legal fees will vary, depending on the services provided. If you budget approximately 1.800.000 COP you should be ''in the ballpark''.
The prices listed below are an example of a purchase with a registered price of 300.000.000 COP. The costs will vary slightly from notary to notary but this will give you a good approximation.
APPROXIMATE NOTARY AND REGISTRATION EXPENSES OF A PURCHASE-SALES AGREEMENT IN COLOMBIA
VALUE OF THE PROPERTY 300.000.000 COP
EXPENSE RATE VALUE Responsible Party?
Withholding tax 1% 3.000.000 SELLER
Government tax 1.05% 3.150.000 50 - 50
Stamp tax 2.700 2.700 50 - 50
Notary Fees 0.30% 900.000 50 - 50
Notary Copies 100.000 100.000 50 - 50
Registration tax 0.50% 1.500.000 BUYER
Certificate - title 12,080 12,080 BUYER
EXPENSES IN PESOS - COP
Buyer's Total 3.588.430.00
Seller's Total 5.076.350.00
NOTARY EXPENSES IN DOLLARS - USD
Buyer's Total $ 1,960.89
Seller's Total $ 2,773.96
APPROXIMATE TOTAL IN DOLLARS $ 4,734.85
photo - courtesy - Hicks - rgbstock