Selling Real Estate in Colombia 2026 — Taxes, Retención, and the Valor-Escritura Practice

Selling Colombian property is mechanically the mirror of buying — same promesa → escritura → ORIP sequence, run by a Notaría. The complications are entirely on the tax side, plus a long-running custom of under-declaring the deed price that deserves an honest treatment. This page covers the real numbers and the real risk.

If you have not read it yet, start with the main overview for the no-MLS, multi-agent, lawyer-mandatory framing.

The Selling Process

1. List the property — through one or several agents (multi-agent listing is normal here, see our agents guide), or owner-direct via FincaRaiz / Facebook / a "Se Vende" sign.
2. Receive offer + sign promesa de compraventa — binding pre-sale with a 10-30% deposit. Negotiate the closing date, who pays which closing costs, and any contingencies.
3. Cooperate with the buyer's due diligence — provide CTL, paz y salvos, original escritura chain, building documents. If you have a tenant in place under Ley 820, disclose it now.
4. Sign the escritura pública at the Notaría — both parties present, buyer hands over cashier check or wire, you sign over title.
5. Notary withholds retención en la fuente — 1% of the deed price is held back at signing as advance capital-gains tax.
6. ORIP files the new deed — title transfers legally.
7. You file the gain on your next annual tax return — ganancia ocasional declared, retención credited against final liability.

Ganancia Ocasional (Capital Gains)

Colombian tax law splits real estate sale profit into two buckets depending on holding period:

• Held more than 2 years → ganancia ocasional: Flat 15% tax rate on the profit. Profit = sale price − inflation-adjusted cost basis − eligible improvements − selling costs. The adjustment for inflation (reajuste fiscal) is published annually by DIAN and matters significantly on long holds. Governed by Estatuto Tributario Art. 300-305.
• Held 2 years or less → ordinary income: Profit added to your annual taxable income and taxed at your marginal rate (up to 39% at the top bracket — see our taxes guide).

The 2-year holding period is a real planning consideration. Selling at month 23 versus month 25 can mean a difference of 20+ percentage points on the marginal tax of the profit.

Retención en la Fuente

At the moment you sign the escritura, the notary withholds 1% of the declared deed price as advance income tax (retención en la fuente). This amount is paid to DIAN on your behalf and shows up as a credit on your next annual tax return, applied against the ganancia ocasional liability calculated above.

On a COP 500,000,000 deed, the notary withholds COP 5,000,000. If your actual ganancia ocasional tax came out to COP 7,500,000 (15% of a COP 50M profit), you owe DIAN an additional 2.5M the next April. If your tax came out to less than 5M (e.g. you sold at a small profit), you get the difference back as a refund.

The retención is on the deed price (valor escritura). This is part of why under-declaration is tempting — every COP 100M shaved off the deed price saves COP 1M in retención plus a larger share of the 15% ganancia ocasional. That math is exactly what the next section unpacks.

Valor Escritura ≠ Valor Real (The Tax-Avoidance Custom)

How the math works in practice (illustrative, COP, 2026):

• Real sale price: 500,000,000
• Real cost basis (purchase price + improvements, inflation-adjusted): 380,000,000
• Real profit: 120,000,000
• Real ganancia ocasional tax (15%): 18,000,000
• Real retención en la fuente (1% of 500M): 5,000,000

Under valor-escritura under-declaration, the parties agree to file a deed at 380,000,000 (matching cost basis or close to it):

• Filed deed price: 380,000,000
• Declared profit: 0
• Declared ganancia ocasional tax: 0
• Retención en la fuente (1% of 380M): 3,800,000 (vs 5,000,000 — saves 1.2M)
• Buyer's registration tax saving (~1.5% of 120M off-book): 1,800,000
• Total combined savings ≈ 18M for seller + 1.8M for buyer ≈ 20M short-term

This is real money. It is also why the practice is hard to kill culturally. But the risk side compounds.

Why Under-Declaring Is Dangerous

Six reasons, ordered roughly by likelihood of catching up to you:

1. The buyer's future tax basis is the under-declared figure. When the next buyer eventually sells, their cost basis is the price they filed on the deed — not what they actually paid. They inherit your tax dodge as their own tax bill. Sophisticated buyers know this and now negotiate against under-declaration.
2. DIAN reassessment authority lasts 5 years. Estatuto Tributario gives DIAN a 5-year window to reassess any tax return. The agency has been upgrading its real-estate market index (referencia catastral + transaction databases) and increasingly cross-references deed prices against market comparables.
3. Bank records reconstruct the real price. If either party is ever audited (income tax, money-laundering inquiry, divorce proceeding, business audit, IRS request for tax-treaty info), the off-book payment is reconstructed from bank deposits and wires. The "muebles" label fools nobody.
4. UIAF anti-money-laundering reporting. Notaries, banks, and real estate brokers all have UIAF (Unidad de Información y Análisis Financiero) reporting obligations on large or suspicious real-estate flows. Under-declared deeds plus off-book payments are exactly the pattern UIAF flags.
5. Future buyer cannot get a mortgage on the under-declared price. If the next buyer wants to finance, their bank appraises the property at market and will not lend against a deed showing a much lower value. This narrows your future buyer pool to cash-only.
6. Criminal exposure on large amounts. Tax evasion of large amounts (currently > 250 SMMLV) can be prosecuted criminally under Art. 434A and 434B of the Código Penal. Prosecutions are rare but not zero.

Bottom line: the short-term savings are real, the risk is also real, and the legal/professional advice from any reputable Colombian tax accountant is to declare the full value. If your seller insists on under-declaration to close the deal, treat it as a signal to negotiate the price down (so the legal tax stack still works for you) or walk away.

Repatriating Funds Abroad

If you registered your original purchase capital with Banco de la República Form 4 (covered on the buying page), repatriation is straightforward:

• Your Colombian bank files an outbound Form 4 / Declaración de Cambio referencing the original FDI registration number.
• The original invested capital plus realized gains can be wired out in foreign currency.
• Standard bank wire fees and the day's exchange rate apply.

If you did NOT register the original capital with Form 4 at purchase, you have two harder options: route through a Cuenta de Compensación (a personal foreign-currency account at a Colombian bank, requires Banco de la República registration of its own), or repatriate at a less favorable rate via the market route. Talk to your bank's international wire desk and your tax accountant early — repatriation planning starts the day you decide to sell, not after closing.

Related Guides

• Real Estate Overview — no-MLS reality, multi-agent norm, lawyer-mandatory framing
• Buying Real Estate — promesa → escritura → ORIP, closing costs 4-7%, Banco República Form 4 (the step that lets you repatriate proceeds at sale time)
• Agents & Listings — multi-agent listing strategy, commission negotiation, going owner-direct
• Scams & Pre-Purchase Checks — the pre-purchase document checklist your buyer's lawyer will run on you
• Colombian Taxes — broader DIAN context, UVT, residency, and the marginal-rate stack that applies if you sell within 2 years