Capital Gains Tax on Colombian Property: The 2026 Rules for Foreign Sellers
Colombia taxes gains on property at 15% — the same rate for residents and non-residents — provided you held the asset for at least two years. Sell earlier and the gain is treated as ordinary income, where marginal rates run up to 39%.
That two-year line is the most consequential date in Colombian property investment, and it is routinely missed.
The two regimes
| Holding period | Treatment | Rate |
|---|---|---|
| 2 years or more | Ganancia ocasional (occasional gain) | 15% flat |
| Less than 2 years | Ordinary income | Progressive, up to 39% |
On a COP 200,000,000 gain, that is the difference between roughly COP 30 million and potentially COP 78 million. If you are approaching the two-year mark, the arithmetic of waiting a few weeks is usually overwhelming.
How the taxable gain is calculated
The formula is straightforward:
Taxable gain = Sale price − Fiscal cost − Applicable exemptions
The leverage is all in the fiscal cost, which is more generous than most sellers realise. It includes:
- The original purchase price
- Annual revaluation adjustments under Article 70 of the Estatuto Tributario — an inflation uplift to the cost basis that materially reduces the taxable gain over a long hold
- Documented improvements — but only with valid electronic invoices
- Notarial and registry fees from the purchase
- Valorisation contributions (contribución de valorización) paid
Two of those are worth acting on today. Keep the electronic invoices for every renovation. A COP 60 million kitchen and bathroom refit is a COP 60 million reduction in your taxable gain if invoiced properly and nothing at all if you paid a contractor in cash. And claim the Article 70 revaluation — sellers and their accountants leave it on the table constantly on properties held five years or more.
The 1% withheld at the notary is not your tax bill
At the deed signing the notary withholds retención en la fuente: 1% of the sale price for individuals, 2.5% for legal entities. This is an advance against your eventual liability, and it is charged on the gross sale price rather than on your profit.
The consequences run both ways. Sell at a large gain and the 1% is a small down-payment on a much bigger bill you settle at filing. Sell at a loss and you have still had 1% taken, recoverable only by filing a Colombian return. Either way the number that matters is settled with DIAN annually, not at the notary.
One relief worth knowing: for a primary residence, the withholding can be reduced by 10% for each year of ownership, capped at a 60% reduction after six or more years.
The primary residence exemption — and why most foreigners cannot use it
Colombia exempts the first 5,000 UVT of gain on the sale of a primary residence. With the 2026 UVT set at COP 52,374, that is an exemption of up to COP 261,870,000.
The conditions are strict:
- The seller must be a Colombian tax resident
- The property must genuinely have been the casa o apartamento de habitación, not a rental or commercial unit
- Proceeds must be deposited into an AFC account and applied to another home purchase, or used to pay down the mortgage on the property sold
The residency condition is the one that bites. A foreign investor who never became a Colombian tax resident does not qualify, however long they owned the apartment. Conversely, a retiree who has lived here for years on a Pensionado visa and is tax resident may well qualify — worth checking with an accountant rather than assuming either way.
Law 2277 of 2022 removed the previous ceiling on the property’s value for this exemption, which broadened it usefully.
A worked example
A non-resident foreign investor buys an El Poblado apartment for COP 600,000,000, holds it four years, invoices COP 40,000,000 of improvements, and sells for COP 850,000,000.
| Sale price | COP 850,000,000 |
| Less purchase price | (600,000,000) |
| Less documented improvements | (40,000,000) |
| Less Art. 70 revaluation and acquisition costs | (varies — claim it) |
| Indicative taxable gain | ≈ 210,000,000 before revaluation relief |
| Ganancia ocasional at 15% | ≈ COP 31,500,000 |
| Withheld at notary (1% of 850m) | 8,500,000 — credited against the above |
Held for 18 months instead of four years, that same gain could have been taxed as ordinary income at rates reaching 39% — a swing of tens of millions of pesos on an identical transaction.
Practical checklist
- Do not sell inside two years unless the commercial case overwhelms the tax cost. It rarely does.
- Collect electronic invoices for every improvement, from the day you buy. Cash payments to contractors are invisible to your cost basis.
- Claim the Article 70 revaluation. On a long hold it is often the single largest reduction available.
- Get a RUT and file. The 1% withheld is only recoverable, and your liability only correctly settled, through a Colombian return.
- Check your Banco de la República registration before listing — tax is only half the exit. See selling property in Colombia as a foreigner.
Related reading: Colombian property taxes, notary fees and legal costs explained and closing costs for foreign buyers.
Thinking about timing a sale around the two-year mark? Talk to our team — we can model the peso outcome against current comparable closings, or see what is currently for sale if you are reinvesting.
General information, not tax advice. Rates, UVT values and reliefs change annually — the 2026 UVT was set by DIAN Resolution 000238 of December 2025. Engage a licensed Colombian tax adviser before acting.