Are you considering purchasing property in Medellín as a foreigner? With its pleasant climate and rich culture, Medellín is an increasingly popular destination for international investors and expatriates. However, buying property in a foreign country requires careful planning and knowledge of local regulations. This guide provides essential tips to help you make informed decisions and successfully navigate Medellín’s real estate market.

Legal Considerations for Buying Property in Medellín

Understanding the legal aspects of purchasing property in Medellín is crucial for avoiding future complications. Below, we outline the required documents, buying process, and local regulations you need to be aware of:

1. Required Documents

When buying property in Medellín, ensure you have the following key documents:

• Certificate of Tradition and Freedom: Confirms the legal history and ensures the property is free of debts or liens.
• Certificate of Property Tax Clearance: Verifies that all municipal taxes on the property are paid.
• Certificate of Valuation Clearance: Ensures any value increase in the property has been settled.
• Purchase Agreement: Outlines the terms and conditions of the purchase.
  
  

2. Buying Process

The property purchase process in Medellín involves several key steps:

• Negotiation and Verbal Offer: The buyer and seller agree on the price and terms.
• Promise of Sale Contract: A preliminary contract is signed at a notary once terms are finalized.
• Payment of Property: A payment schedule is set, often including a significant down payment.
• Public Deed: The final document transferring ownership is signed in a notary’s presence and registered with the Office of Public Instruments Registry.
  
  

3. Local Regulations

Key regulations to consider when purchasing property in Medellín:

• Foreign Investment: Foreigners can buy property in Colombia without restrictions, but funds must be transferred and registered through the Bank of the Republic.
• Taxes and Fees: Closing costs may include withholding taxes, registration fees, and real estate agent commissions, usually split between buyer and seller.
• Investor Visa: Real estate investment can qualify you for an investor visa, potentially leading to residency in Colombia.

4. Financial and Investment Considerations

When buying property in Medellín as a foreigner, it’s important to understand the associated costs, financing options, and tax implications to ensure a successful transaction.

Associated Costs

Beyond the purchase price, expect the following costs:

• Registration Taxes: Around 1% of the property value, shared between buyer and seller.
• Notarial Fees: Approximately 0.3% of the property value, also shared.
• Real Estate Agent Commission: Typically 3% to 5% of the property value, usually covered by the seller.
• Deed Expenses: Roughly 0.54% of the sale price.

Financing Options

Securing financing as a foreigner in Colombia can be challenging, but options exist:

• Bank Loans: Some Colombian banks offer mortgage loans to foreigners, usually requiring at least six months of residency and a local credit history.
• Seller Financing: In some cases, sellers may provide direct financing.
• Private Investors: Private investment arrangements may also be available.

Tax Considerations

Key tax obligations to consider:

• Property Tax: Annual tax ranging from 0.5% to 1.6% based on the cadastral value.
• Income Tax: Rental income is subject to a 35% tax.
• Capital Gains Tax: A 15% tax applies if the property is sold after two years, and 35% if sold before.

Conclusion

Buying property in Medellín is an excellent investment opportunity and a chance to start a new life in one of Latin America’s most dynamic cities. By understanding the legal and financial aspects, you can ensure a smooth and successful purchase. For personalized assistance, visit RE/MAX Real Estate Experts Medellín, where our experienced agents will guide you every step of the way.

If you would like a RE/MAX agent to assist you with purchasing property in Medellín, please contact us via email at info@medellin-realestate.com or reach out to us on WhatsApp +57 301-417-3332.