Colombia’s Real Estate Tax Shocks for 2025: What Property Owners Must Know Now

Table of Contents

• Executive Summary: Key Takeaways on 2025 Real Estate Taxes
• Current Tax Structure: Property, Transfer, and Capital Gains Explained
• Recent Legal Reforms: New Laws and Changes Impacting 2025
• How Much Will You Pay? Key Tax Rates and Calculations with Official Data
• Compliance and Reporting: Filing, Deadlines, and Avoiding Penalties
• Foreign Investors: Special Rules and Double Taxation Agreements
• Enforcement and Audit Trends: What DIAN Is Watching Closely
• Future Outlook: Projected Reforms Through 2030
• Case Studies: Real-World Tax Scenarios for Residential and Commercial Owners
• Official Resources and Where to Get Help (DIAN, Superfinanciera, Local Government)
• Sources & References

Executive Summary: Key Takeaways on 2025 Real Estate Taxes

Colombia’s real estate tax landscape in 2025 is shaped by a combination of longstanding property tax laws, recent reforms, and robust compliance measures. Property owners—both individuals and legal entities—face several direct and indirect taxes. The principal tax is the municipal “Impuesto Predial Unificado” (IPU), an annual property tax assessed on the cadastral value of urban and rural real estate. In 2025, municipalities continue to set rates within the national framework, typically between 0.3% and 3.3% of cadastral value, with larger cities like Bogotá and Medellín enforcing stricter collection and digital payment systems (Alcaldía de Bogotá).

Capital gains from real estate sales (“ganancia ocasional”) are taxed at a national flat rate of 15%, introduced in the 2022 tax reform and confirmed for 2025. Regular income from property leasing is subject to progressive income tax rates for individuals and corporate tax for entities. Non-residents and foreign investors are liable for these taxes when holding Colombian property, with treaty benefits available in some cases (Dirección de Impuestos y Aduanas Nacionales – DIAN).

Recent legal developments emphasize compliance and anti-evasion. The DIAN has intensified property registration audits and digitalized reporting mechanisms, requiring accurate property registration and disclosure of beneficial ownership. Failure to comply can trigger significant penalties, including fines and property liens (Dirección de Impuestos y Aduanas Nacionales – DIAN). Local governments are also leveraging cadastral modernization programs to reassess property values, leading to higher taxable bases in several urban areas.

Statistically, property tax collection accounted for over 1% of Colombia’s GDP in 2023, with projections for modest growth as reassessments expand. The government’s 2025 fiscal plan anticipates continued enhancements in digital tax administration and enforcement, aiming to reduce evasion and increase municipal revenues (Ministerio de Hacienda y Crédito Público).

Looking ahead, the outlook for Colombian real estate taxation through 2027 involves ongoing cadastral updates, stricter compliance checks, and potential alignment with OECD recommendations for property tax policy. Investors and owners should expect increasing transparency requirements and the possibility of higher effective tax rates arising from improved property valuations and enforcement.

Current Tax Structure: Property, Transfer, and Capital Gains Explained

Colombia’s real estate tax framework comprises several distinct levies, each governed by national and local regulations. Property owners, buyers, and sellers must be aware of these taxes to ensure compliance and accurate financial planning.

• Property Tax (Impuesto Predial): This annual municipal tax is imposed on real estate holdings. The rate varies by municipality and property classification, typically ranging from 0.3% to 3.3% of the property’s cadastral value. In Bogotá, for example, residential properties are taxed on a progressive scale, with lower rates for social interest housing and higher rates for luxury assets. Municipal authorities regularly update cadastral values, with significant revaluations expected to continue through 2025 as part of ongoing efforts to align fiscal values with market realities. Taxpayers can consult their property’s value and rates directly with the Secretaría Distrital de Hacienda.
• Transfer Tax (Impuesto de Registro e Instrumentos Públicos): The transfer of real estate ownership triggers a registration tax, generally set at 1% of the transaction value, plus notarial and registration fees. The parties to the transaction typically share these costs, and payment is required to formalize the transfer in the public registry. Local registries, such as the Superintendencia de Notariado y Registro, provide up-to-date fee schedules and compliance guidance.
• Capital Gains Tax (Impuesto de Ganancia Ocasional): When a property is sold for more than its acquisition cost, the resulting gain is taxed at a flat rate of 10%. Certain exemptions apply, including for principal residences held for more than two years, subject to conditions stipulated in the Dirección de Impuestos y Aduanas Nacionales (DIAN) guidelines. Notably, the government’s 2022 tax reform (Law 2277 of 2022) expanded the definition of capital gains and clarified taxable events, with continued enforcement expected through 2025.

Recent legislative attention has focused on boosting local tax collection, improving cadastral accuracy, and closing loopholes in capital gains reporting. The tax authorities have enhanced digital platforms for filings and payments, and increased scrutiny is anticipated in 2025 and beyond. Foreign owners and investors should pay particular attention to compliance, as audits and enforcement actions are likely to intensify, especially in major urban centers. Overall, the outlook is for gradual rate adjustments and stricter adherence to declared values, with municipalities seeking to increase revenues from the growing real estate sector.

Recent Legal Reforms: New Laws and Changes Impacting 2025

Colombia’s real estate tax framework has undergone substantial changes leading up to 2025, reflecting broader government initiatives aimed at fiscal modernization and increased public revenue collection. The most impactful legislative development is the enactment of Law 2277 of 2022, commonly referred to as the 2022 Tax Reform, which introduced amendments to several tax bases, including those affecting property ownership and transactions.

A central feature of Law 2277 is the revision of the Impuesto Predial Unificado (IPU), or unified property tax, which is levied by municipal governments. The reform authorized municipalities to update cadastral values more frequently, bringing property valuations closer to market values and thereby expanding the tax base. This adjustment aims to reduce the historic gap between official and real property values, a long-standing challenge in Colombian tax administration. As a result, owners of real estate in urban centers, particularly in Bogotá and Medellín, have observed significant increases in their property tax bills for 2024 and 2025. Municipalities are now required to conduct cadastral updates at least every five years, ensuring that property tax assessments remain current and reflective of real market conditions (Ministerio de Hacienda y Crédito Público).

In addition, Law 2277 increased the tax rate on capital gains (ganancias ocasionales) derived from the sale of real estate, raising the standard rate from 10% to 15% from 2023 onward. This measure is expected to generate additional tax revenue from real estate transactions, particularly in the high-value segment, and incentivize long-term property holding. Exceptions remain for principal residences under certain value thresholds and for transfers between direct family members (Dirección de Impuestos y Aduanas Nacionales (DIAN)).

Compliance requirements have also tightened. Enhanced reporting obligations for foreign owners and stricter documentation for capital gains declarations are now enforced. Taxpayers must ensure timely and accurate reporting of property transactions to avoid penalties. Municipalities are investing in digital platforms to facilitate online declarations and payments, streamlining compliance and improving transparency.

Looking ahead, Colombian authorities are expected to continue refining real estate tax policy to align with international standards and fund infrastructure spending. The increased frequency of cadastral updates will likely lead to further property tax adjustments in the coming years, with a focus on urban areas. Market participants should anticipate greater scrutiny of valuations and transaction reporting as tax authorities enhance their technological capabilities and data integration (Instituto Geográfico Agustín Codazzi).

How Much Will You Pay? Key Tax Rates and Calculations with Official Data

In Colombia, real estate taxes are primarily governed by municipal authorities, with regulations set by national law. The most significant tax is the Impuesto Predial Unificado (IPU), or Unified Property Tax, which is levied annually on both residential and commercial properties. The applicable rates, assessment methods, and compliance requirements are updated periodically, with 2025 reflecting recent adjustments outlined by authorities.

• Impuesto Predial Unificado (IPU): For 2025, the annual property tax rates generally range from 0.3% to 3.3% of the official cadastral value (avalúo catastral) of the property. The exact rate depends on the property’s use (residential, commercial, industrial) and its assessed value bracket. Major cities, such as Bogotá and Medellín, publish their own detailed rate tables each year, with Bogotá’s 2025 schedule accessible from the Secretaría Distrital de Hacienda de Bogotá.
• Valuation Basis: The taxable base is the cadastral value, which is updated periodically by municipal cadastral authorities. For 2025, recent reforms have increased the frequency and accuracy of these updates, aiming to align taxable values more closely with market prices, as mandated by Instituto Geográfico Agustín Codazzi (IGAC).
• Additional Taxes: For property transactions, a registration tax (Impuesto de Registro) is imposed, generally ranging from 0.5% to 1% of the transaction value, depending on property use and location. Capital gains realized on the sale of property are subject to a capital gains tax (up to 10%), as set by the Dirección de Impuestos y Aduanas Nacionales (DIAN).
• Compliance and Deadlines: Property owners must pay the IPU annually, usually in the first semester. Municipalities offer discounts for early payment and impose surcharges for late payment. Digital payment options and online declarations have become standard, streamlining compliance.
• Key Statistics: In 2023, Bogotá collected over 3.5 trillion COP in property taxes, and forecasts for 2025 indicate continued growth as cadastral updates expand the taxable base (Secretaría Distrital de Hacienda de Bogotá).
• Outlook: For the coming years, expect further cadastral modernization and stricter enforcement. The government aims to reduce tax evasion and improve fiscal sustainability, in line with national tax reform objectives (Ministerio de Hacienda y Crédito Público).

Compliance and Reporting: Filing, Deadlines, and Avoiding Penalties

Compliance with real estate tax obligations in Colombia is governed by national and local regulations, emphasizing timely filing, accurate reporting, and adherence to payment deadlines. The principal tax applicable to property owners is the Impuesto Predial Unificado (IPU), a municipal property tax collected annually by local authorities. The process for filing and payment is managed at the municipal level, with each city or municipality—such as Bogotá, Medellín, or Cali—setting its own schedules and procedures.

For 2025, property owners must file and pay the IPU according to the official calendar published by each municipality. For example, in Bogotá, the filing and payment deadlines are typically established in the first quarter of the year, with possible discounts for early payment and surcharges for late payment. In 2024, the deadlines for payment with discount in Bogotá were set in April, with the full rate due in June; similar timelines are expected for 2025. Property owners are required to declare the cadastral value of their properties, which forms the basis for calculating the tax due. This value is updated periodically by the relevant cadastral authority, and owners are responsible for verifying its accuracy each year (Secretaría Distrital de Hacienda de Bogotá).

Failure to file or pay the IPU on time results in penalties and interest charges. Penalties are calculated as a percentage of the unpaid tax and increase the longer the delay persists. Interest is based on the tasa de interés moratorio set by the national tax authority, which is adjusted periodically. In addition to financial penalties, persistent non-compliance may lead to enforced collection measures, including asset embargoes and legal action. Municipal tax authorities provide online portals for filing and payment, and property owners are urged to use these systems to ensure compliance and maintain records of their submissions (Secretaría de Hacienda de Medellín).

For non-resident property owners, compliance can be more complex due to the need to monitor deadlines and regulatory changes remotely. It is advisable to appoint a local representative or engage professional tax advisors familiar with municipal requirements. Authorities have increased digitalization efforts, offering virtual assistance and automated reminders to facilitate greater compliance (Secretaría de Hacienda de Cali).

Looking ahead to 2025 and beyond, ongoing regulatory updates and digital modernization are expected to further streamline compliance, but also increase enforcement and detection of non-compliance. Property owners should remain vigilant regarding updates from municipal authorities to avoid penalties and ensure full compliance with real estate tax obligations.

Foreign Investors: Special Rules and Double Taxation Agreements

Foreign investors seeking to participate in Colombia’s real estate sector must navigate a complex framework of tax rules, special requirements, and international agreements. The Colombian tax regime treats foreign individuals and entities as either residents or non-residents for tax purposes. Generally, non-residents are taxed only on their Colombian-source income, including gains and income from real estate, while residents are taxed on worldwide income. For non-resident investors, rental income and capital gains derived from Colombian real estate are subject to withholding tax, typically at a flat rate of 20% on gross income or the applicable progressive rates for individuals, depending on the nature of the income and the investor’s status (Dirección de Impuestos y Aduanas Nacionales – DIAN).

Importantly, Colombia has progressively expanded its network of Double Taxation Agreements (DTAs) to prevent the same income from being taxed in both Colombia and the investor’s country of residence. As of 2025, Colombia has ratified DTAs with more than a dozen countries, including Spain, Switzerland, Canada, the United Kingdom, Mexico, and Chile, among others. These treaties typically offer reduced rates of withholding tax on real estate income and capital gains, or in some cases, assign exclusive taxing rights to the country where the property is located—usually Colombia (Universidad Externado de Colombia). Investors must submit appropriate tax residency certificates and comply with local DTA procedures to benefit from treaty relief.

Recent years have seen the Colombian government enhance disclosure and compliance mechanisms for foreign investors. Under the Foreign Exchange Statute and tax regulations, foreign buyers must register their real estate investments with the Central Bank (Banco de la República) and report rental or sale proceeds through authorized intermediaries (Banco de la República). Compliance failures can result in penalties, inability to repatriate profits, or loss of treaty benefits. Additionally, the tax authority (DIAN) has intensified audits to ensure accurate reporting of income, capital gains, and wealth related to real estate holdings.

Looking ahead, Colombian authorities are expected to maintain this strict compliance environment and potentially expand DTA coverage in line with OECD recommendations. As the market continues to attract foreign capital, especially in commercial and tourism-linked real estate, investors should anticipate ongoing regulatory updates and a focus on transparency. Staying informed about evolving treaty benefits, registration obligations, and local tax changes will be essential for optimizing investment returns and managing tax risks.

Enforcement and Audit Trends: What DIAN Is Watching Closely

The Colombian National Tax and Customs Directorate (DIAN) has intensified its oversight of real estate tax compliance in recent years, and this trend is set to continue into 2025 and beyond. Several legislative updates and enforcement initiatives have shaped the current landscape, as DIAN adapts to increased transaction volumes and changing taxpayer behaviors within the real estate sector.

A key area of focus for DIAN has been the accurate declaration of property values in purchase and sale transactions. Efforts to clamp down on underreporting intensified following the introduction of stricter rules under Law 2277 of 2022, which reinforced DIAN’s authority to cross-check reported transaction values with cadastral appraisals and third-party data. In 2025, DIAN is expected to further leverage its data analytics capabilities to identify discrepancies between declared values and market trends, flagging suspicious cases for audit (DIAN).

Real estate capital gains tax (Impuesto a la Ganancia Ocasional) remains a prime target. DIAN has increased scrutiny of capital gains declared on property sales, especially where properties are sold at prices significantly above their acquisition cost, or where holding periods affect the applicable rate. DIAN’s audit teams are paying special attention to exemptions and deductions claimed by taxpayers, ensuring they are supported by proper documentation and truly applicable under current law (DIAN).

Nonresident taxpayers and foreign investors are another group under closer review. DIAN has reinforced compliance requirements around the withholding tax obligation for property transactions involving nonresidents, as well as the proper declaration of rental income from Colombian real estate. Cross-border information exchange agreements and digital monitoring tools are being deployed to identify cases of nonreporting or underreporting by foreign owners (DIAN).

Looking ahead, DIAN projects that real estate will remain a high-risk sector for tax evasion through 2025 and into the following years. Its 2023–2026 Strategic Plan emphasizes the expansion of digital audits, integration of property registry and cadastral databases, and ongoing taxpayer education campaigns. Taxpayers involved in real estate transactions should anticipate increased requests for supporting documentation and more rigorous audits as DIAN continues to refine its enforcement strategies (DIAN).

Future Outlook: Projected Reforms Through 2030

Colombia’s real estate tax landscape is poised for notable changes as the government continues to address fiscal needs, urbanization, and economic modernization. As of 2025, real estate taxes in Colombia primarily encompass the property tax (“impuesto predial unificado”), transfer tax (“impuesto de registro”), and capital gains taxes associated with real estate transactions. These taxes are administered at both national and municipal levels, with significant variation in rates and assessment practices across jurisdictions.

The property tax base is determined by the cadastral value (“avalúo catastral”), which municipalities are currently updating through reforms launched in 2022. The Instituto Geográfico Agustín Codazzi (IGAC) is actively leading a nationwide modernization of cadastral registries, aiming for more accurate valuations by 2027. This process is expected to increase assessed values, thereby raising property tax revenues for local governments. The Ministerio de Hacienda y Crédito Público has signaled that these reforms are critical to improving municipal fiscal autonomy and public investment capacity.

On the legislative front, the Colombian Congress has considered further reforms to harmonize municipal tax rates and simplify compliance for real estate investors—particularly foreign and institutional players. Proposals under review for 2025-2027 include digitalization of tax filings, enhanced data sharing between notaries and tax authorities, and the introduction of progressive property tax brackets for high-value holdings. These measures are intended to reduce evasion, increase transparency, and align with international standards as Colombia deepens integration with the Organisation for Economic Co-operation and Development (OECD).

Key statistics reflect a property tax collection of approximately COP 9 trillion in 2023, with expected growth to over COP 12 trillion by 2027, driven by revaluations and compliance improvements (Departamento Administrativo Nacional de Estadística (DANE)). Meanwhile, real estate transfer and capital gains taxes are under review to ensure fairness in rapidly appreciating urban markets, especially in Bogotá, Medellín, and the Caribbean coast.

Looking toward 2030, the Colombian government is likely to pursue a more progressive and digitized real estate tax system. Priorities include closing the gap between cadastral and market values, strengthening enforcement, and creating targeted relief for low-income homeowners. These reforms are anticipated to support fiscal sustainability, boost local infrastructure funding, and promote transparency in the real estate sector (Ministerio de Vivienda, Ciudad y Territorio).

Case Studies: Real-World Tax Scenarios for Residential and Commercial Owners

Colombia’s real estate tax regime presents distinct considerations for residential and commercial property owners. The property tax, known as Impuesto Predial Unificado, is administered at the municipal level and is a core revenue source for local governments. As of 2025, reforms and digitalization efforts are shaping compliance and enforcement, with implications for both domestic and foreign investors.

• Residential Property: Bogotá Example (2024–2025)
  In Bogotá, property tax rates for residential properties are progressive, generally ranging from 0.3% up to 1.6% of the property’s cadastral value, depending on assessed value brackets. For instance, an apartment valued at COP 500 million is taxed at approximately 0.75%. New digital platforms have improved tax assessment transparency and provided online payment options, reducing late payment surcharges, which stand at 2% monthly for overdue amounts. The capital city also offers discounts (up to 10%) for advance or timely payments, encouraging compliance among homeowners. Recent years have seen increased audits targeting under-declared property values, with authorities leveraging updated cadastral surveys and property registry data to combat evasion (Secretaría Distrital de Hacienda de Bogotá).
• Commercial Real Estate: Medellín Case (2023–2025)
  Commercial properties in Medellín face higher property tax rates than residential assets, typically between 0.5% and 3.3% of cadastral value. For example, a retail space with a cadastral value of COP 2 billion would incur an annual tax at the upper end of the rate scale. The city intensified enforcement in 2024–2025 by cross-referencing business licenses and utility records to identify non-compliance and underreported values. Failure to comply can result in property liens and legal actions. Additionally, commercial owners are subject to the Industry and Commerce Tax (ICA) if the property generates rental income, adding a further compliance layer (Alcaldía de Medellín).
• Foreign Owners: Cartagena and the Caribbean Coast
  Increasing foreign investment in residential and tourism properties has prompted coastal municipalities to tighten property registration and tax collection. In Cartagena, foreign buyers must ensure cadastral registration and annual payment of property tax, with non-compliance potentially resulting in sales restrictions or fines. Municipalities are collaborating with the national tax authority to monitor transactions and ownership by non-residents (Alcaldía de Cartagena de Indias).

Looking forward, continued digitalization and inter-agency data sharing are expected to strengthen enforcement and improve compliance rates in the coming years. Property owners—domestic and foreign—should remain vigilant on municipal updates to avoid penalties and benefit from available discounts.

Official Resources and Where to Get Help (DIAN, Superfinanciera, Local Government)

Colombia’s real estate tax landscape is shaped by both national and local authorities, making compliance a multifaceted process. Property owners and investors must navigate regulations enforced by the national tax authority, DIAN (Dirección de Impuestos y Aduanas Nacionales), sector-specific oversight by the financial regulator Superfinanciera (Superintendencia Financiera de Colombia), and the local governments responsible for property tax (predial) administration.

• DIAN (Dirección de Impuestos y Aduanas Nacionales): As the principal tax authority in Colombia, DIAN manages the administration and enforcement of national taxes, including capital gains tax (impuesto de ganancia ocasional) and income tax on rental income. DIAN’s official portal provides up-to-date forms, guides, and annual calendars for tax declarations. Taxpayers can consult legal frameworks, verify obligations, and access virtual assistance to resolve doubts about filing, payment, or penalties (Dirección de Impuestos y Aduanas Nacionales).
• Superfinanciera (Superintendencia Financiera de Colombia): While not directly administering real estate taxes, Superfinanciera supervises entities involved in real estate finance (such as banks and mortgage providers) and ensures compliance with anti-money laundering regulations. It also provides consumer guidance on financial products related to real estate, which can impact tax deductions and reporting (Superintendencia Financiera de Colombia).
• Local Government (Gobiernos Locales / Alcaldías): The property tax (impuesto predial) is a municipal levy, and its rates, calendars, and exemptions vary by city and municipality. Local government websites—such as the Secretaría Distrital de Hacienda de Bogotá and Secretaría de Hacienda de Medellín—offer online payment platforms, tax calculators, and information on property appraisals. These portals also provide details on early payment discounts, appeals, and regularization programs.

For 2025 and beyond, official resources are increasingly digital, with virtual channels for tax filing and payment gaining traction. Taxpayers are encouraged to consult the respective authorities’ websites for updates on new regulations, changes in tax rates, and compliance deadlines. Personalized assistance is available through call centers, online chat, and physical service points in major cities.

Property owners should regularly check these official resources to ensure timely compliance and take advantage of potential benefits or relief measures as Colombia’s tax rules evolve.

Sources & References

• Alcaldía de Bogotá
• Dirección de Impuestos y Aduanas Nacionales – DIAN
• Ministerio de Hacienda y Crédito Público
• Secretaría Distrital de Hacienda
• Superintendencia de Notariado y Registro
• Instituto Geográfico Agustín Codazzi
• Secretaría Distrital de Hacienda de Bogotá
• Secretaría de Hacienda de Medellín
• Secretaría de Hacienda de Cali
• Banco de la República
• Departamento Administrativo Nacional de Estadística (DANE)
• Ministerio de Vivienda, Ciudad y Territorio
• Alcaldía de Cartagena de Indias
• Superintendencia Financiera de Colombia