OFFPLAN NEWS

(06.08.2007 )
Property in Colombia Registering Property in Colombia
STANDARDIZED PROPERTY
Property value: 296,904,261
City: Bogota

Registration Requirements:

Procedure 1. Obtain certificate about history of the property 
Time to complete: 1 day
Cost to complete: COP 7,000
Comment: A certificate with the history (at least 20 years) of the property ("Certificado de Tradición") is obtained at the corresponding registry office.
Procedure 2. A certificate of existence of the company must be obtained at the Chamber of Commerce
Time to complete: 1 day
Cost to complete: COP 3,000
Comment: When the parties are companies, a certificate of existence and representation ("Certificado de Existencia y Representación de la Compañia") of the company must be requested at the Chamber of Commerce.
This certificate has a validity of 1 month and it works as the ID of the company to enter the transaction.
 
Procedure 3. A study of the titles of the property is done by a lawyer
Time to complete: 5 days
Cost to complete: COP 1,060,000
Comment: A lawyer, usually external to the company, will make a study of the past titles of the property and about the history of the owners to check there is nothing wrong with them for the transaction.
The study of the titles is not mandatory, but it takes place almost always for the transactions that follow these assumptions.

The documentation shall include:
The lawyer must be provided with the certificates obtained in Procedures 1 and 2 and with a copy of the company's shareholders act authorizing its representative to act on their behalf.
Procedure 4. Obtain certificates at the Municipality that the property is up to date on tax payments
Time to complete: 2 days
Cost to complete: COP 30,000
Comment: The buyer must obtain at the Municipality a certificate that all municipal taxes on the property have been paid ("Paz y Salvo Predial") and that all taxes related to increases in the value of the property due to constructions, roads, etc. have been paid ("Paz y Salvo de Valorización").
Since 2004, the tax on the increases of property value due to public works has started to be charged in Bogotá. This affects only a small portion of properties. This tax was introduced by law in 1997, but it has only been taken effect recently and it is already working in some parts of the country.
 
Procedure 5. A preliminary deed ("minuta") is prepared by a lawyer
Time to complete: 2 days
Cost to complete: COP 1,060,000
Comment: The same lawyer that worked in the study of titles in Procedure 4 will prepare the preliminary version of the deed ("minuta") that will be presented later to the notary.
Again, this is usual only for these types of transactions.
The documentation shall include:
Certificates obtained in procedure 4.
Procedure 6. The notary prepares the public deed
Time to complete: 8 days
Cost to complete: 0.25% of property value (notary's fees) + 1% of property value (Retención en la Fuente) 
Comment: The notary public will prepare the final public deed with all the documentation previously obtained by the parties
The participation of a notary in the preparation of the public deed is mandatory by law, and his fees are also established by law (0.25% of property value)
The notary will also keep 1% of the value of the transaction from the seller as an advance payment to be applied to the Income Tax ("Retención en la fuente")
A 16% VAT is also paid to the notary public.
 
Procedure 7. The public deed must be registered at the Registry Office
Time to complete: 4 days
Cost to complete: 1% of property value (Registry Tax) + 0.5% of property value (Registration Fee)
Comment: The "registry tax" or "Impuesto de Registro" can be paid at the registry office in the city of Bogotá and other large cities, where the commercial bank in charge of collection of this tax has installed a branch for this purpose. In smaller cities it will have to be paid prior to registration in a commercial bank.
Despite its name, the "Impuesto de Registro" is a tax that goes to finance state-level programs on public health. It is not a fee for a service but a tax.
After the "registry tax" is paid, the public deed prepared by the notary must be registered at the Registry Office for its validity (3 days).
After registration, the new public deed is automatically sent (internal procedure) to the Office of the Cadastre to register the change of ownership.
 
 
Note: Procedures sometimes take place simultaneously. Instances of this are marked with an asterisk (*).

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