Transferring Funds:
International money transfer to buy Colombia real estate:
Today, local banks have representatives all over the world. Ask you bank the time it is going to take transferring the money, the name of the local partner overseas, and the ways to track your money transfer.
In many ways, Colombia is very progressive. The banking system is one of them. You can work through a Colombian bank with no doubts…..
But, one of the things that North Americans and some foreigners are accustomed to when conducting real estate transactions… that's the use of Title Insurance Companies with their typical third party escrow services, etc. and 'how' to handle deposits sometimes becomes complex and needs to be considered and anticipated in advance? Be sure to talk to your real estate agent and/or attorney in advance about how the deposit and final payment will be handled when purchasing a 're-sale' property from an individual?
When buying a 'new' house or apartment, in some cases the developer can have an international account and you will be able to do a money transfer directly to the Seller's overseas account.
In most of the cases you can wire the money from your bank to the developer's Fiduciary Account in Colombia (similar to an Escrow Account). The process is simplified because there is already established a relationship between the bank and the developer.
Money transfer overseas has some requirements, as you know, to prevent money laundering. The Colombian government is not the exception…. The normal precautions are taken.
Your home bank can document your credibility because they already know you and they have your transactions records, your credit history with them and so on.
This cash transfer is not subject to any taxes, whenever it is registered as a foreign investment, So….. be sure, when transferring funds for real estate purposes you should know that it is your responsibility to assure the correct forms are filed. Be sure you register the money as a Foreign Investment.
For example, if you wish to repatriate the funds in the future then you must file Form #4 (Formulario No. 4).
Your professional real estate agent can assist you to make sure your money is received in Colombia with a form #4 at a Colombian Bank.
If you don't want to register as a foreign investment, banks will automatically file Form No. 5 (Formulario No. 5). This is OK whenever you have no need to repatriate the money.
Once the Deed (Escritura) is registered, within 60 days you must register using Form 11(Formulario No. 11) the foreign investment with the Central Bank (Banco de la Republica) and attach the property's ownership history.
This registration is mandatory if you want to exercise your foreign exchange rights, such as remitting the money abroad when you resell the property.
The Buyer will receive an official document with confirmation of the registration of the investment.
Compliance with both Forms 4 and 11, entitles Buyer's and foreign investors to take the cost of their original investment out of Colombia, tax free. Just as simple as that.
WE HOPE THIS INFORMATION HELPS ANSWER SOME OF YOUR QUESTIONS AND/OR CONCERNS REGARDING THE PROSPECT OF PURCHASING REAL ESTATE IN COLOMBIA? For any additional specific questions not covered here, please e-mail us…. info@cartagenafirstamericanrealty.com
