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FIRPTA for Colombian Sellers: Selling Your US Property

When a Colombian sells their US property, the sequence is predictable: FIRPTA withholds 15% of the gross sale price at closing, the Form 8288-B certificate (filed at listing) reduces this to the actual tax, and the remaining proceeds wire to Colombia. The DIAN declaration captures the gain on the Colombian annual return. The Colombia-US Double Taxation Agreement coordinates the two tax systems. No surprises if the sequence is managed correctly from day one of the listing.

FIRPTA at the Colombian Buyer’s Price Tier

Colombian buyers at the Miami market’s $400K–$800K tier face meaningful FIRPTA withholding: On a $500,000 sale with $150,000 gain: FIRPTA withholds $75,000. Actual US tax at 15% of gain: $22,500. Without 8288-B: $75,000 held, $52,500 refunded after annual return. With 8288-B filed at listing: $22,500 held, $52,500 released at closing. At the Doral price tier ($350K–$700K), this difference is material. Full FIRPTA guide: FIRPTA complete guide.

Colombian DIAN Tax on US Property Gains

Colombian tax residents who sell US property must report the gain on their Colombian declaración de renta: (1) The gain in COP: calculated using the COP/USD rate at purchase date and sale date. COP depreciation may mean the COP gain is proportionally larger than the USD gain. (2) Colombia-US DTA: US capital gains tax paid is credited against Colombian tax on the same gain. (3) Colombian ganancias ocasionales tax: Colombia taxes capital gains (ganancias ocasionales) at a flat 15% rate. US tax paid above this reduces the Colombian bill to zero or near zero. (4) Work with a Colombian contador: the annual declaración de renta and the ganancias ocasionales calculation require a Colombian tax professional with international transaction experience.

Repatriating Proceeds to Colombia

After the US closing, net USD proceeds return to Colombia: (1) Wire from US account to Colombian bank account. (2) Declare the incoming transfer as return of capital from foreign investment to Banco de la República. (3) Convert USD to COP through a Colombian bank or currency service. (4) Declare the sale on the Colombian declaración de renta for the tax year of the sale. COP/USD conversion at the time of repatriation determines the COP received. If the peso has weakened since purchase, the seller receives more COP than they originally sent — in addition to the USD capital gain.

Guides: Sending Money from Colombia — FIRPTA Guide — Find an Agent

Frequently Asked Questions

What is FIRPTA for Colombian sellers of US property?

15% withheld from gross sale price by the buyer at closing. Form 8288-B certificate, filed at listing, reduces this to the actual capital gains tax owed.

Does Colombia also tax the gain when a Colombian sells US property?

Yes. Colombian ganancias ocasionales tax: flat 15% on the gain. US tax paid is credited against the Colombian bill through the Colombia-US DTA.

How does COP/USD rate affect Colombian sellers' proceeds?

Determines how many COP the USD proceeds convert to. If the peso has weakened since purchase, sellers receive more COP per dollar — amplifying returns in local currency terms.