Key takeaways
- The notarial and registry schedule is the same percentages of the declared price whether the escritura describes a local, a bodega or an apartment, landing at roughly 2 percent for the buyer, plus your lawyer's fee.
- Annual predial runs 0.3 to 1.2 percent of cadastral value, and commercial values and rates tend toward the upper end.
- At 15 percent if held two years or more; below that, the gain is ordinary income at a materially higher rate.
- You need a NIT and a RUT to hold income-generating property; get the RUT before the escritura if you can.
- Short-term residential rentals have historically yielded 8 to 15 percent gross a year and long-term 5 to 9 percent gross, with no VAT and a simpler filing.
A commercial unit bought by a foreigner in Medellín pays the same closing costs as a home: about 2 percent of the price (0.27 percent notary, 0.67 percent registry, 1 percent beneficencia), plus the lawyer. The differences arrive later: VAT on the rent you charge, retención on each payment, and a 15 percent capital gains tax on exit.
Checklist · Before you sign a promesa
The 12 documents I check on every deal
Tick them off as you collect them. Saved on this device.
Superintendencia de Notariado y Registro, online; valid 30 days
The notaría where it was signed; ask for a certified copy
The municipality's tesorería or hacienda office
The building's or gated community's administración
From the seller; the RUT downloads from the DIAN site
Granted at a notaría, or at a consulate if the seller is abroad
Printed on the predial bill, or from the municipal catastro
In the deed and on the cadastral record
Latest paid bills from EPM or the local operator
Declared before the notary in the deed itself
Drafted by your lawyer or agent; never sign the seller's version unread
Curaduría urbana or the municipal planning office
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Where each document comes from
- Certificado de tradición y libertad: Superintendencia de Notariado y Registro, online; valid 30 days
- Prior deed: The notaría where it was signed; ask for a certified copy
- Property-tax good standing: The municipality's tesorería or hacienda office
- HOA good standing, if applicable: The building's or gated community's administración
- Seller's ID / RUT: From the seller; the RUT downloads from the DIAN site
- Power of attorney, if the seller is represented: Granted at a notaría, or at a consulate if the seller is abroad
- Cadastral appraisal: Printed on the predial bill, or from the municipal catastro
- Survey and boundaries: In the deed and on the cadastral record
- Utilities up to date: Latest paid bills from EPM or the local operator
- Family-home protection certificate: Declared before the notary in the deed itself
- Promesa de compraventa draft: Drafted by your lawyer or agent; never sign the seller's version unread
- Building permit, if applicable: Curaduría urbana or the municipal planning office
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Does buying a commercial unit cost more to close than an apartment?
No. The notarial and registry schedule is the same percentages of the declared price whether the escritura describes a local, a bodega or an apartment, landing at roughly 2 percent for the buyer, plus your lawyer's fee. The timeline is also the same: 30 to 45 days from agreed deal to registered escritura if the certificate of tradition and freedom comes back clean and the paz y salvos are current. Commercial costs more in preparation: the lease, the reglamento clause defining permitted use, the municipal land use certificate, and outstanding administración on a possibly empty unit.
What taxes apply to a Medellín commercial unit that an apartment does not?
- VAT on commercial rent. Leasing commercial property is a taxed service; residential rent is not. You collect and remit it, so the rent the tenant pays and the rent you keep differ.
- Withholding on rental payments. A company tenant withholds tax at source each month and pays it to the DIAN on your account. You recover it against your annual filing, but only if you file.
- Industry and commerce tax (ICA) falls on the business operating in the unit, not the owner who leases it, but matters if you run your own business there.
Annual predial runs 0.3 to 1.2 percent of cadastral value, and commercial values and rates tend toward the upper end.
How is capital gains taxed when a foreigner sells a commercial unit?
At 15 percent if held two years or more; below that, the gain is ordinary income at a materially higher rate. It is calculated on sale price minus your fiscal cost base: the declared purchase price in the escritura plus documented improvements. Underdeclaring at purchase to save on beneficencia inflates your taxable gain on exit by the same amount. Keep the escritura, registry receipt and improvement invoices.
Should I register in Colombia for tax before or after I buy?
You need a NIT and a RUT to hold income-generating property; get the RUT before the escritura if you can. A foreign owner leasing commercial space carries on an economic activity in Colombia: a RUT with the correct activity code, VAT registration past the threshold, and an annual filing. Holding through a Colombian company changes the arithmetic entirely; decide that before the promesa.
How do commercial costs compare to just buying residential?
Compare on net. Short-term residential rentals have historically yielded 8 to 15 percent gross a year and long-term 5 to 9 percent gross, with no VAT and a simpler filing. Commercial leases bring longer tenancies and corporate tenants, with VAT, withholding and a more active relationship with the DIAN. Appreciation has historically run 7 to 8 percent a year, history not a forecast. For the full checklist, see the full guide.
What to do before you sign anything
Pull the certificate of tradition and freedom with the registry number (registered owner, mortgages, liens, encumbrances). Read the reglamento's permitted use clause: a retail unit may not legally operate as a restaurant or gym. Confirm land use with the municipality. Request paz y salvo for predial and administración. Decide personal versus corporate ownership with an accountant. Budget 2 percent plus legal fees, and talk to a Colombian accountant about VAT and withholding before you have a tenant.
Frequently asked questions
Do foreigners pay higher closing costs on commercial property in Medellín?
No. About 2 percent for everyone: 0.27 percent notary, 0.67 percent registry and 1 percent beneficencia, plus your lawyer.
Is VAT charged on commercial rent in Colombia?
Yes. Leasing commercial property is a taxed service, unlike residential rent; the owner collects and remits it.
How much capital gains tax will I pay when I sell a commercial unit?
15 percent if held two years or more; otherwise ordinary income. The base is the declared purchase price plus documented improvements.
How long does it take to close on a commercial property in Medellín?
30 to 45 days from agreed deal to registered escritura.
Do I need a Colombian tax ID to own commercial property as a foreigner?
Yes, if the property generates income: a RUT with the correct activity code, VAT registration where applicable, and an annual filing.
