Colombia Property Tax Guide 2026

Overview

Colombia's property tax system operates at multiple government levels. The Impuesto Predial (also referred to as ICA — Impuesto de Industria y Comercio in some contexts, though ICA is a business tax) is a municipal-level tax on real estate ownership. Capital gains on property sales are taxed through the IIT at progressive rates. Colombia does not impose an annual wealth tax on property holdings (abolished 2020), making property ownership relatively straightforward from a tax perspective.

Predial — Municipal Property Tax

The Impuesto Predial is the primary recurring property tax in Colombia, assessed and collected by each municipality. It is based on the cadastral value (avaluó catastral) of the property:

• Rates range from 0.5% to 3.5% of the cadastral value annually
• Rates vary by municipality — Bogotá typically charges 0.5–2.5%, Medellín 0.5–1.5%, Cartagena 0.5–2.0%
• Cadastral values are generally lower than market value (often 60–80% of market value)
• Properties with higher cadastral values may face progressive rates in some municipalities
• Bills are issued annually, with payment deadlines typically in March–April
• Discounts of 5–15% are commonly offered for early payment
• The tax applies to both residential and commercial property owners
• Foreign owners pay the same rates as Colombian nationals

Unpaid predial results in interest, penalties, and potential enforcement proceedings by the municipality.

Capital Gains on Property — Included in IIT (10–39%)

Colombia does not have a separate capital gains tax (CGT) regime for property. Instead, capital gains from the sale of real estate are included in the IIT (Impuesto a la Renta) and taxed at the progressive rates of 10–39%:

• The gain is the difference between the sale price and the inflation-adjusted cost basis
• The gain is aggregated with the seller's other income for the tax year
• If the gain pushes the taxpayer into a higher bracket, it is partially taxed at higher marginal rates
• Improvements and construction costs can be added to the cost basis
• Cost basis is adjusted for inflation using the IPC (Índice de Precios al Consumidor)
• Non-resident sellers face special withholding rates (typically 10% on the gross sale price)

Primary Residence Exemption

Gains on the sale of a primary residence are fully exempt from IIT if the following conditions are met:

• The property must have been owned and occupied as the primary residence for at least 2 years prior to sale
• There is a lifetime limit on the exemption amount (approximately 25,000 UVT as of 2026, subject to annual adjustment)
• If the sale price exceeds the exemption limit, the excess gain is taxable at IIT progressive rates
• The exemption is available once every 5 years (or more frequently in cases of relocation, divorce, etc.)

No Annual Wealth Tax on Property

Colombia's net worth tax (Impuesto al Patrimonio) was abolished effective 2020. Prior to abolition, property was included in the taxable net worth calculation. As of 2026, there is no annual tax on property holdings beyond the municipal predial. There is no federal tax on real estate ownership.

Rental Income Tax

Income from renting property is subject to IIT at progressive rates. Key features:

• Rental income is aggregated with other income and taxed at 10–39%
• A standard deduction of 20% of gross rental income applies (as a deemed expense allowance)
• Alternatively, actual expenses can be deducted (predial paid, maintenance, insurance, mortgage interest)
• Property tax (predial) paid is deductible against rental income
• Monthly or bi-monthly provisional returns are required for rental income
• Non-resident landlords face 15% withholding on gross rental income

FAQs

Do foreigners pay different property taxes?

No. Property taxes in Colombia are non-discriminatory. Foreigners pay the same predial and capital gains taxes as Colombian nationals. However, there are restrictions on foreign ownership of property in border zones and certain rural areas.

How is cadastral value determined?

Each municipality maintains a cadastral registry with assessed values updated every 1–5 years. Cadastral values are based on location, size, construction quality, and market data. Updates are performed by the Instituto Geográfico Agustín Codazzi (IGAC) or municipal authorities.

Can I deduct predial on my IIT return?

Yes, predial paid on income-generating property (rental) is deductible against that rental income. Predial on a primary residence is not deductible.

What if I sell a property at a loss?

Capital losses on property sales can offset capital gains from other property sales in the same tax year. Unused losses may be carried forward for up to 10 years.

Disclaimer

This guide provides general information about Colombian property taxes for the 2026 tax year. Tax laws and rates vary by municipality and may change. The information is based on published DIAN and municipal data and may not reflect individual circumstances. Always consult with a qualified Colombian tax advisor (contador) or local authorities for advice specific to your situation. InvestmentKit does not provide tax advice.