Taxation in Colombia: Property Tax for Expatriates

Published on October 24, 2025 and written by Cyril Jarnias

Moving to Colombia represents an exciting adventure for expatriates, but understanding the nuances of local taxation proves essential to avoid unpleasant surprises.

Whether it’s income tax which varies based on tax residency status or property tax that will weigh on your shoulders if you become a homeowner, mastering these aspects is crucial to navigate your new life peacefully.

While Colombian taxation may seem complex at first glance, this article demystifies the main challenges expatriates may face, to arm you with the necessary information to optimize your tax situation and make the most of your experience in Colombia.

Colombian Taxation: Understanding Income Tax for Expatriates

Definition of Expatriate According to Colombian Tax Legislation

An expatriate in Colombia, in the tax sense, refers to any foreign individual temporarily or permanently residing in the country, with or without the intention to establish permanent residence. There is no specific tax regime for expatriates; their situation is determined by their status as tax residents or non-residents.

Tax Residency Criteria in Colombia

To be considered a tax resident in Colombia, one must:

• Stay in Colombia for more than 183 days (consecutive or not) within a 365-day period
• Presence days include entry and exit days
• This status results in taxation on worldwide income

Exceptions: Certain individuals, such as diplomats or equivalents, benefit from specific exemptions under the Vienna Convention.

Income Tax Brackets in Colombia for Tax Residents

Annual Taxable Net Income (in UVT)*	Progressive Tax Rate
Up to 1,090 UVT	0%
1,090 – 1,700 UVT	19%
1,700 – 4,100 UVT	28%
Over 4,100 UVT	33%

*The UVT (Tax Value Unit) is a tax measurement unit adjusted annually (1 UVT ≈ 47,065 COP for 2024).

Specific Tax Obligations for Expatriates

• Annual income tax return to the DIAN (National Tax and Customs Directorate)
• Informative declaration of foreign assets if the total value of assets held outside Colombia exceeds an annual threshold (e.g., 92,864,000 COP for 2025)
• Tax payment on worldwide income for tax residents, only on Colombian-source income for non-residents
• Deadlines: The filing period varies based on the last digit of the NIT (tax identification number), generally between August and October for the previous tax year

Double Taxation and Tax Treaties

• Colombia has signed double taxation avoidance agreements with several countries (e.g., France, Spain, Canada, Switzerland, Chile, Mexico)
• These treaties prevent being taxed twice on the same income, through a tax credit mechanism or partial/full exemption based on bilateral agreements
• In the absence of a treaty, a tax credit for taxes paid abroad is possible, up to the limit of Colombian tax due on the same income

Tax Deductions and Credits for Expatriates

• Possible deductions for certain expenses (health, education, mortgage interest, donations to recognized charities)
• Tax credit for taxes paid abroad on foreign income, within the limits set by law or international treaties

Practical Tips for Tax Compliance

• Obtain a NIT from the DIAN to file tax returns
• Keep updated records of worldwide income and foreign tax payments
• Get assistance from a local accountant or tax specialist, especially to interpret tax treaties and optimize the return
• Respect filing deadlines to avoid fines and penalties
• Useful resources: DIAN online portal, consular services, expatriate associations, accounting firms specialized in international taxation

Key Takeaway: Tax residency status in Colombia is primarily based on the physical presence criterion (183 days). Taxation on worldwide income, filing obligations, and managing double taxation require special attention and support from specialized professionals.

Decoding Main Taxes: From VAT to Property Tax

Value Added Tax (VAT)

VAT in Colombia is currently set at 19%. It applies to most goods and services, including:

• Everyday consumer goods.
• Digital services (cloud, software, hosting, online gambling, etc.).
• Imports, including goods shipped by mail (removal of the under $200 exemption).
• Real estate sales and tourist services for non-residents.

Some products benefit from reduced rates or are exempt (e.g., electric vehicles remain at 5%). Recent reforms tend to broaden the VAT base, particularly for digital services and imports.

Income Tax

Income tax in Colombia varies based on tax residency status:

Status	Tax Rate	Thresholds and Particularities
Resident	Progressive (0% to 39%)	Bracket in tax units (TU) adjusted annually
Non-resident	Flat rate of 20%	Only on Colombian-source income

2025 Bracket for Residents (1 TU = 49,799 COP):

Taxable Income (TU)	Marginal Rate (%)	Tax Calculation
0 – 1,090	0%	0
1,090 – 1,700	19%	(Income – 1,090) × 19%
1,700 – 4,100	28%	(Income – 1,700) × 28% + 116 TU
4,100 – 8,670	33%	(Income – 4,100) × 33% + 788 TU
8,670 – 18,970	35%	(Income – 8,670) × 35% + 2,296 TU
18,970 – 31,000	37%	(Income – 18,970) × 37% + 5,901 TU
31,000 and above	39%	(Income – 31,000) × 39% + 10,352 TU

Main Deductions for Residents:

• Exemption cap on foreign pensions: up to 1,000 TU.
• Deductions for health, education expenses, mortgage interest, etc., under certain conditions.

Property Tax

The property tax (“impuesto predial”) is levied by municipalities on the cadastral value of real estate properties.

• Calculation Method: Percentage applied to the cadastral value, generally between 0.3% and 3.3%, depending on the city and property type.
• Due Dates: Annual payment, with possible discounts for early payment.
• Points of Attention for Expatriates:
  • Obligation to declare if the property is held directly or through a company.
  • Risk of penalties for late payment.
  • Expatriates are subject to the same rates as locals but must ensure regular declaration and payment.

Other Relevant Taxes

• Wealth Tax (“impuesto al patrimonio”): For high net worth individuals (variable thresholds, approximately 122,000 TU), progressive rates from 0.5% to 1.5%.
• Foreign Assets Declaration: Tax residents must declare their foreign assets for informational purposes.
• Local Taxes: Some cities impose an industry and commerce tax (“ICA”) for locally generated income.

Practical Examples

Expatriate Situation	Tax Manifestations
Resident expatriate, employee in Bogotá	– VAT paid on most purchases (19%). – Progressive income tax according to the bracket. – Property tax if owning real estate. – Foreign assets declaration if holding assets outside Colombia.
Non-resident with a rented apartment in Medellín	– VAT on certain rental-related services. – Annual property tax. – 20% tax on Colombian-source rental income.
Expatriate owner of a hybrid vehicle	– 19% VAT on purchase (instead of 5% previously).

Key Takeaways

Expatriates in Colombia must pay special attention to tax residency, declaration of worldwide income (for residents), compliance with property obligations, and VAT on new digital services and imports.

Simplified Tax Filings for Peaceful Living in Colombia

Expatriates in Colombia must comply with specific tax obligations based on their status as tax residents or non-residents. Anyone present for more than 183 days within 365 is considered a tax resident and must declare their worldwide income. Non-residents are only taxed on Colombian-source income.

Main Tax Obligations for Expatriates:

• Annual income tax return (renta) to the DIAN.
• Simplified declaration if income, expense, or asset thresholds are exceeded.
• Declaration of assets held abroad if their value exceeds the annually set threshold.
• Payment of property tax (impuesto predial) for real estate owners.

Summary Table of Obligations by Tax Status:

Tax Status	Income to Declare	Assets to Declare	Property Tax
Tax Resident	Worldwide	Assets in Colombia and Abroad	Yes (if owner)
Non-resident Taxpayer	Colombian Source	Assets in Colombia Only	Yes (if owner)

Key Steps to File Income Tax and Property Tax Returns:

1. Verify tax status (resident or non-resident).
2. Obtain a NIT (Tax Identification Number) mandatory for any tax procedure.
3. Gather necessary documentation:
   • Passport, cédula de extranjería
   • Proof of income (salaries, rentals, investments)
   • Bank statements
   • Real estate property titles
   • Certificates of foreign tax payments (if applicable)
4. Access the DIAN online portal to complete the declaration.
5. Complete and submit the declaration before the annual deadline (generally between August and October).
6. Pay any balance due immediately after filing.

Practical Tips to Facilitate Tax Filing:

• Prepare documents in advance and check updated declaration thresholds each year.
• Use DIAN’s online services to simplify the procedure.
• Consult a local accountant, especially for foreign income or assets.
• Inform yourself about double taxation treaties to avoid excessive taxation.
• Keep accurate records of expenses and income to justify each declared amount.

Common Mistakes to Avoid:

• Forgetting to declare foreign income or assets for tax residents.
• Missing official filing deadlines, resulting in fines and interest (penalties can reach 25% per year).
• Neglecting to obtain a NIT or update personal information with the DIAN.
• Ignoring declaration thresholds, even for temporary stays or modest income.

Available Resources for Assistance:

• Local accountants specialized in international taxation.
• Official DIAN portal with guides and FAQs.
• Online tax services and filing simulators.
• Expatriate forums and groups sharing experiences.

Benefits of Effective Tax Management in Colombia:

Benefits	Impact on Daily Life
Administrative Peace of Mind	Less Stress and Legal Risks
Tax Burden Optimization	Savings and Better Planning
Protection Against Penalties	Financial and Legal Security
Easier Access to Banking Services	Account Opening, Credits, Purchases
Compliance with Local Obligations	Easier Integration into Society

Rigorous and proactive tax management allows you to fully enjoy life in Colombia, avoiding administrative and financial complications.

Expert Tips to Optimize Your Taxation as an Expatriate

Optimizing Taxation as an Expatriate in Colombia: Expert Tips

Income Tax Minimization Strategies

Expatriates in Colombia have several levers to optimize their taxation, provided they understand the mechanisms and plan their situation well.

• Tax Residency Status: Any expatriate staying more than 183 days per year in Colombia becomes a tax resident and must declare worldwide income. Non-residents are only taxed on their Colombian income.
• Tax Deductions: Residents can deduct certain job-related expenses (equipment, travel, training), part of home expenses (for remote or self-employed workers), as well as medical and educational expenses exceeding a certain threshold. Interest paid on student loans is also deductible under certain conditions.
• Tax Credits: A foreign tax credit is granted to residents for taxes paid abroad, up to 100% of the Colombian tax due on that income. This credit is capped at 75% if the flat-rate system (“presumptive rent”) applies.
• Personal Allowances: Colombian legislation provides a limited deduction for dependents, which can reduce taxable income.

“It is crucial for an expatriate in Colombia to identify all professional and personal expenses that can be deducted, while considering the overall cap on exemptions and deductions which cannot exceed 40% of annual gross income.”

Comparative Table of Main Tax Benefits

Tax Benefit	Residents	Non-residents	Main Conditions
Professional Expense Deduction	Yes	No	Proof Required
Foreign Tax Credit	Yes	No	Justified Taxes Paid Abroad
Dependent Deduction	Yes	No	Declared Children or Dependents
Worldwide Taxation	Yes	No	Stay > 183 Days/Year

International Tax Treaties

Colombia has concluded several tax treaties with various countries to avoid double taxation. However, there is no treaty between Colombia and the United States; thus, American expatriates must use internal U.S. mechanisms (Foreign Tax Credit or Foreign Earned Income Exclusion) to avoid double taxation. For European nationals or other nationalities benefiting from a treaty with Colombia, each specific case should be verified with the competent authorities.

Effective Management to Avoid Double Taxation

“A comprehensive audit of worldwide income sources is essential. You must systematically use the foreign tax credit offered by your home country if no treaty exists with Colombia. For those covered by a bilateral treaty, verify which state has the primary right to taxation to minimize overall taxation as much as possible.”

“Rigorous record-keeping – local or foreign contracts, international bank statements – not only provides a solid defense in case of an audit but also maximizes optimization through all possibilities offered by each legal system regarding your particular situation… A concrete example? A French consultant who worked six months in each country must ensure compliance with the time criterion in each state so that the same month is not counted twice as a taxable period…”

Specific Local Taxes: Property Tax

Real estate owners in Colombia are subject to the “impuesto predial”, a local property tax calculated based on the cadastral value of the property.

• Possible Exemptions: Some properties intended as primary residences may benefit partially or fully depending on certain municipalities.
• Available Reductions: Early payment can entitle up to a 10% discount; some cities also offer a discount for retirees/elderly persons under specific conditions.
• Strict Declarative Obligation: Any change affecting value/possession terms must be reported immediately under penalty of significant administrative/fiscal sanctions including seizures/forced sale after prolonged unresolved delay…

Practical Tips & Concrete Examples

Here are some concrete avenues directly from field expertise:

1. Keep ALL receipts related to investments/income/expenses made locally/internationally for a minimum of five years!
2. Always consult a lawyer/certified appraiser BEFORE real estate acquisition/sale to know exactly applicable municipal/regional obligations
3. If you are an employee of a multinational deployed from France/Germany/USA etc., request an official document certifying the amount of taxes withheld at source which will serve as the basis for tax credit in your home country…
4. Use specialized international wealth management software capable of automatically tracking multi-currency/multi-jurisdictions
5. Never forget to declare any bank/financial accounts held outside Colombia if resident status: voluntary omission = very severe penalty!

Warnings & Documentation Best Practices

Any omission/error in declaration exposes fines that can reach +25% of arrears plus daily accumulated interest as long as the debt remains unpaid. Mandatory registration of the national identification number (NIT) is a prerequisite for any valid administrative/tax procedure in Colombian territory.

Finally, recall that there is a NEW anti-evasion regime since recent reform making any attempt to conceal cross-border assets/income particularly risky: automatic cooperation in information exchange between administrations has grown exponentially in the last decades!

In practical conclusion:
Successful expatriation necessarily requires anticipation, rigorous organization coupled with continuous vigilance regarding the evolution of local/international regulations impacting your global wealth directly!