Premier Casa Colombia has properties in all sectors of the real estate market and in order to find your perfect future property the first step is to decide for what classified type of property you are searching for:
• Residential: Residential property is real estate that has been developed and built for living for example house, condominium, multi family, lots/ land, and much more. Whether a luxury bayfront apartment with panoramic views and an own tennis court or a one-of-a-kind lot overlooking the Caribbean Sea: Premier Casa Colombia has a wide range of high-class properties which fulfill your dream of living in Colombia.
• Commercial: Commercial property commonly refers to either buildings or land intended to be used for any kind of business activity which include for instance office spaces, retail spaces, industrial spaces, or land for prospective projects to generate profit. It can be either a Commercial Building located on the "Corredor de Carga" with the potential of 7 rentals in the same 3 stories or for a development project.
The Culture of Colombia Real Estate Transactions & How to Obtain a Colombian Investor Visa
Many clients have asked us about the procedures and necessary documents needed for foreigners buying real estate in Colombia. The process is not quite like what North Americans are used to. The first most important things are a passport, your cash in place, and a bit of patience. One of the great benefits of becoming a real estate investor in Colombia is that your purchase can qualify you for a Colombian residency visa. (Stick with us till the later part of the article for more details on the Colombia Investor Visa!)
There are a few things to go through when buying real estate in Colombia as a foreigner. Real estate transactions are done in cash and this mode of payment does not guarantee a substantial discount. In most real estate deals, you will see between a 3% to 8% discount in the negotiation. On the other hand, repossessions deals in many cases are controlled by a small group of people. Although obtaining this deal is not impossible, it can be quite a challenge to cut into this circle.
Second of all, you might want to refrain from the North American notion that if a property has been on the market for two years, you can negotiate and get a good deal. Unless there is a really urgent need to sell, a Colombian will sit on a property until they get what they believe it is worth. As a matter of fact, sellers will continue to raise their own prices as the prices rise in the marketplace. This might not make sense to most foreigners, as it seems obvious that lowering the price would increase the chances of the property being sold. Then again, this is a cultural view in Colombia and not something you can change.
Last but not least, as you negotiate, if you find a house that you like but intend to do some renovation, it might not be a good idea to make comments about the things you don't like in the unit and demand a discount on the property for that reason. Forget that! The seller will think, "I am living here and, while things might not be completely new, there is nothing wrong with the place."
The process for buying real estate in Colombia consists of the following elements: a verbal offer, the price on the deed, the deposit, how the road improvement tax will be paid (this applies to Medellin), title research, when the Promesa de Compra-venta will be signed, and the date for the closing.
What is of crucial importance to take note of is that in Colombia, there is NO title insurance and NO escrow. At this step, you need an experienced and reliable lawyer who understands real estate law to do a title search and a series of other background checks.
Once the title search is completed, the lawyer will prepare the document called the Promesa de Compraventa. This document will outline all the aforementioned details. A penalty clause will also be included, often of 20%, which is applied for default to either party. This is a very serious matter, and Colombians are not likely to default. The buyer must now get a deposit together that goes directly to the seller.
The final step for buying real estate in Colombia as a foreign buyer involves the signing of the deed (escitura). At this point, paperwork will be finalized, make the remaining payment, and receive the keys.
In general, foreigners without a Colombian ID cannot get bank accounts. Banks usually charge a bit more when it comes to the handling of funds entering Colombia, so it is recommended to open a brokerage account. Only a certain group of companies are permitted to do this and bringing funds into Colombia is strictly monitored.
The Colombian government is very strict and asks a lot of questions, meaning opening the brokerage account can be a bit tedious, but this is the safest and most secure way to bring money in and eventually take it out. You can bring up to USD 10,000 in cash into the country without any problem. Some people will travel with a group of friends and ask them to carry cash as well. Frankly, this is not the best idea. Every flow of funds going in and out of Colombia must be registered. This registration is sent to the Bank of the Republic.
One of the conditions under which you can register funds coming into Colombia as foreign investment is that you have not been in the country for more than 6 months in one calendar year.
We strongly recommend against sending the money for your real estate purchase directly to a friend, a lawyer, or even a seller. It is true that this has been done before, but there will be unpleasant consequences waiting for you. Almost certainly, the registration will not be done properly, and a worst-case scenario is that you will lose your money.
Foreigners Buying Real Estate in Colombia for a Colombian Residency Visa
Also known as Colombia Investor Visa, foreigners can obtain a Colombian residency visa based on real estate investments. In this system, the "salario minimo" or yearly minimum wage is used as part of the calculations. For instance, in 2016, the approximate wage (rounded up for ease) is 700,000 COP. To apply for a one-year Investor Visa, a special temporary visa, you need to make a real estate investment 350 times the minimum wage, meaning an investment of 350 x 700 – or approximately 245,000,000 COP. You can renew this Colombian residency visa for up to five years.
For the 5-year Colombian Resident Visa, you can purchase a property of 650 times the minimum wage – or approximately 455,000,000 COP. There have been some changes with this visa recently. Technically, it has become an "indefinite" visa, meaning it must be "restamped" every 5 years. After this period, you can apply for citizenship.
The following points are essential to take note of in respect of Colombian residency visas. Firstly, the aforementioned amounts must be registered on the deed. A Colombian might want to register a lower sale price on the deed, which is why you must pay close attention to this and make it clear in your negotiations if you plan to apply for a visa based on your real estate investment.
Secondly, keep in mind that you need to register the property in your name. If you want to apply for a visa based on a property purchase, it cannot be purchased through Panama S.A., an L.L.C, S.A.S., or a foreign trust.
Corporations and LLC's to Use for Foreign Real Estate Buyers in Colombia
For those who are not too concerned about having your name on that deed, you can still purchase real estate in Colombia through any of these means – Panama S.A., an L.L.C, S.A.S., or a foreign trust (Colombia corporate structure). These vehicles are completely legal in Colombia and they are great to serve your tax purposes, or for reasons of privacy. The application requires all foreign corporate documents, duly translated by an approved translator and legalized (probably with the Apostille seal).
Putting it All Together, Here is Your Knowledge Takeaway
It is worth noting that if you are aiming to make a simple investment in Colombia, buying real estate in your name is the best way to go for. Incorporating a company to help with management is worth considering if you are interested in buying a few properties to rent out. Again, you can only achieve a Colombian residency visa with property purchased in your name.
Hiring a good lawyer is the most important step for foreign real estate buyers in Colombia. Don't forget that there is no Title Insurance or Escrow in Colombia. Make sure you find a Colombian lawyer that has a concrete and clear idea of real estate law and holds this process to rigorous standards.
Like what you just read? Please contact us if you have any other questions regarding Colombian real estate.