Send Money From the US to Buy in Colombia

Most foreigners who buy an apartment in Colombia pay for it with money that starts in a US bank account. Getting those dollars to the seller is not hard, but the order of operations matters. The way the money enters Colombia determines whether your purchase is on record as a foreign investment, and that record is what you will lean on years later when you sell and want to send the proceeds home. This guide walks through the sequence from the US side to the notary, plus the US reporting points to raise with your tax preparer. It is education, not legal or tax advice.

The one rule behind every step

Money for a Colombian property bought by a non-resident should arrive from abroad through the regulated exchange market (a Colombian bank or other authorized exchange intermediary) and be declared as foreign investment, in the name of the person or company that will hold title. Banco de la República's guide to its exchange information system lists real estate (inmuebles) among the assets a non-resident's foreign investment can go into (Banrep guide, PDF), and Banrep's question-and-answer guide on the investment regime explains that an investment made in foreign currency is registered through the exchange declaration that the exchange intermediary transmits when the currency is channeled through the exchange market (Banrep FAQ, 2017, PDF). Why this matters, and what registration means, is covered in our guide on registering your foreign investment. Here we focus on the practical sequence.

Step by step

Decide who the buyer is before you move money. The name on the wire, the investor in the exchange declaration and the buyer in the escritura should be the same person or entity. If you are weighing buying through a company, settle that first; see personal name vs. SAS.
Choose the receiving intermediary early. Before you sign the promesa de compraventa, identify which Colombian bank or authorized exchange intermediary will receive your dollars. Ask them, in writing if possible: what wiring instructions to use (beneficiary, account, SWIFT/BIC, any reference text), what documents they need from you (this may include your passport and something showing the purchase, such as the promesa), and how the pesos will reach the seller. Options and requirements differ between institutions, so do not assume what worked for a friend applies to you.
Ask about identification numbers. Some banks or notaries may ask a foreign buyer for a Colombian tax ID (NIT) or another identifier. Banrep's guide to its exchange information system lists the passport among the document types for individual investors, and lists the NIT as applicable only to foreign investors who do not have a Colombian cédula de ciudadanía (Banrep guide, PDF), but practice varies, so ask your intermediary and notary what they will require and how long it takes to obtain.
Line up timing with the promesa. Purchases are often paid in more than one installment, for example a deposit when the promesa is signed and the balance at or around the signing of the escritura. Pre-construction purchases may have many installments. Each payment from abroad should be handled and declared the same way. See the promesa de compraventa guide for how payment terms are usually written.
Wire from your own US account. Send the funds from an account in the buyer's name. Avoid paying from a relative's account, a business account that is not the buyer, or a third-party app. Before sending, confirm the wiring instructions by phone with a contact you already know at the receiving institution; changed instructions sent by email are a classic fraud pattern.
Complete the exchange declaration when the dollars are converted. When the intermediary converts the funds to pesos, the transfer is declared as foreign investment using the form and code the intermediary indicates. Banrep's 2013 instructions for the investment exchange declaration (Formulario No. 4) included specific handling for real estate purchases (Banrep instructions, PDF). Banrep has since moved to a new exchange information system under its Circular DCIP-83 (Banrep guide, PDF), so rely on the intermediary for the current form and code. Our Formulario 4 guide goes deeper. Ask for a copy of the completed declaration and any confirmation the intermediary issues.
Pay the seller from Colombia. The pesos should go from the intermediary (or your account there) to the seller in Colombia, in the amounts and on the dates the promesa and escritura describe. Ask your intermediary which payment methods it offers. Do not pay the seller in the US or to an account outside Colombia: that leaves no Colombian exchange record of your investment.
Budget separately for closing costs. Notary, registration and tax costs at closing are paid in pesos too. Plan how you will fund them and keep the receipts; see closing costs in Colombia.
Close the loop after registration. Once the escritura is registered, download a current certificado de tradición y libertad from the Superintendencia de Notariado y Registro and confirm the owner matches the investor in your declarations. See the certificado de tradición y libertad explained.

Keep one paper trail

For each payment, keep together: the outgoing wire confirmation from your US bank (with the USD amount and date), the intermediary's conversion receipt showing the peso amount and exchange rate, and the exchange declaration. Add the promesa, the escritura and the registered certificado. The amounts and dates should reconcile. This file supports the outbound transfer when you eventually sell and repatriate the money, and it is the same evidence your accountants on both sides will want.

The US side: reporting pointers

A few US reporting rules often come up for US persons who buy in Colombia. Treat these as pointers to discuss with your tax preparer, not a complete list.

FBAR (FinCEN Form 114). If you open a Colombian bank account (or have signature authority over one), a US person must file an FBAR when the combined value of foreign financial accounts exceeds $10,000 at any time during the calendar year (FinCEN). It is filed electronically with FinCEN, not with your tax return, and is due April 15 with an automatic extension to October 15 (IRS FBAR page). Ask whether any account the intermediary opens or uses for you counts.
Form 8938. Foreign bank accounts can also count toward Form 8938, which is attached to your annual return. For example, an unmarried taxpayer living in the US files if specified foreign financial assets exceed $50,000 on the last day of the year or $75,000 at any time during the year; other filers have different thresholds (Form 8938 instructions).
The property itself. Foreign real estate held directly is not reported on either the FBAR or Form 8938. If you hold it through a foreign entity, your interest in that entity may be reportable on Form 8938 (IRS comparison; IRS Form 8938 Q&A).
Dollar records. Amounts on a US return are reported in US dollars, generally using the exchange rate prevailing when you pay or receive the item (IRS currency guidance). Keep the USD amount and date of every wire; your preparer will need them to work out your cost and, later, any gain.

Rental income, depreciation and sale reporting are covered in US tax reporting for Colombian property.

Common ways it goes wrong

Paying outside Colombia, for example a US-to-US transfer to the seller or the seller's relative.
Routing money through someone else's Colombian account, such as an agent's, a friend's or a developer's informal account, instead of a declared transfer in your name.
Name mismatches between the wire sender, the investor in the declaration and the buyer in the escritura.
Not asking for a copy of each exchange declaration at the time of conversion.
Acting on emailed wiring instructions without verifying them by phone.

If money already came in the wrong way, see unregistered foreign investment and talk to a Colombian lawyer or accountant who handles the exchange regime.

Quick checklist

Buyer, wire sender and investor are the same person or entity.
Receiving Colombian intermediary chosen; instructions and document list confirmed before signing the promesa.
Wiring instructions verified by phone before each transfer.
Each transfer declared as foreign investment; copy of every declaration on file.
Seller paid in Colombia, matching the promesa and escritura.
Wire confirmations, conversion receipts, escritura and certificado stored together.
FBAR and Form 8938 questions raised with your US tax preparer.

Frequently asked questions

Can I pay the seller from my US account to theirs?

That is a common mistake. Paying outside Colombia leaves no Colombian exchange record of your investment. The money should come in through a Colombian bank or authorized exchange intermediary, be declared as foreign investment, and then be paid to the seller in Colombia.

Whose name should the wire be in?

The buyer's. The wire sender, the investor in the exchange declaration and the buyer in the escritura should be the same person or entity.

Do I need to file an FBAR because I bought property in Colombia?

Not for the property itself: directly held foreign real estate is not reported on the FBAR or Form 8938. But if you have Colombian bank accounts whose combined value with your other foreign accounts exceeds $10,000 at any time in the year, a US person must file an FBAR. Confirm with your tax preparer.

What if I pay in several installments?

Each payment from abroad should be sent and declared the same way, and you should keep a copy of every exchange declaration together with the wire confirmations.

What records should I keep?

For each payment: the US wire confirmation with the USD amount and date, the conversion receipt, and the exchange declaration, plus the promesa, escritura and registered certificado de tradición y libertad.

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