For foreign buyers arriving in Armenia for the first time, we hope there aren’t many, and why would we say that when we are in the business of selling?? It’s because our advice has always been to learn about Colombia first, in our case Armenia and area, rent for as long as it takes to have the information necessary to make a decision, and then purchase if you feel totally comfortable doing so. The “Wow” factor that we discussed in a previous blog can mesmerize one into buying within a very short period of time, and that can turn into a serious problem later.
The market here is like nothing you have ever seen, there is no MLS service where comparables can be verified, of course, that would be a useless exercise because many sales are reported for less than the funds that actually change hands. That has tax implications for both the seller and the buyer. The seller pays less tax on his capital gain and the buyer assumes that liability and will have to pay it when he sells the property as his capital gain will also include the one the seller dodged. As an example, a buyer pays 400 million Colombian pesos on a purchase that is reported as 300 million, 100 million less. He sells years later for 600 million, his actual gain is 200 million, but he is required to report the capital gain as 300 million and will pay tax on that, his capital gain of 200 plus the original purchase difference of another 100. As you can imagine, there are legal issues in entering into a transaction such as this and the penalties for doing so can be severe.
There is also no required education or registration of agents, one can become an agent by deciding early in the morning that they want to sell real estate and create a Facebook page, for example, in a few minutes, that says they are. Many have no business experience and only a very few speak English. A legal firm in Medellin states their opinion of real estate in Colombia on one of their blogs as a “horrible mess”. We concur.
Moving to a foreign country is a huge decision and can be daunting for many. Our firm has pioneered a concept that supports our clients as they move through the system from airport pickup on arrival to the day they receive their keys. Renters are encouraged to take advantage of the service, as are those purchasers that are already familiar with Armenia. Our team are professionals, experts in their fields, and are at hand to deal with every possible issue an expat could face.
We have positioned ourselves uniquely in the Armenia real estate market, we offer services no one else is capable of. Call us today with any questions or concerns, your inquiry will be responded to quickly.