Colombia’s President Promised to Repeal the Wealth Tax and Announced a Structural Tax System Reform

Colombia’s President Abelardo de la Espriella, in his August 7 inaugural address, said the government plans to repeal the wealth tax and prepare a structural tax reform. According to the head of state, the decision was already communicated during the election campaign and is now being confirmed in his role as president.

The proposed changes were presented as a key element of a course focused on investment. He stressed that Colombia must stop “punishing those who invest and build capital,” and assured that investing in the country should become a safe decision again. In his view, prosperity does not come from taxing success, but from creating conditions for business growth and citizens’ development.

Finance Minister Miguel Gómez Martínez said the tax reform bill will be submitted to Congress in September. The plan is to start with a fiscal adjustment through administrative measures. Importantly, the wealth tax cannot be repealed “by decree”: it is established by law, meaning lawmakers will need to act for it to be removed.

Wealth Tax: Legal Uncertainty and Changes in Recent Years

Colombia’s wealth tax was made permanent after the 2022 reform under the previous president, Gustavo Petro (Law 2277 from 2022). The tax applies to individuals whose total net assets on January 1 each year are at least 72,000 UVT (tax units). In monetary terms, this is roughly COP 3.77 billion (about USD 1.2 million) in 2026.

Tax rates are set on a progressive scale: 0.5%, 1%, and 1.5%. The maximum rate is scheduled to be eliminated after 2026, and the top rate will be 1%.

For Colombian tax residents, the tax is assessed on worldwide assets; for non-residents, it applies only to assets located in Colombia.

At the same time, the dollar-equivalent threshold has shifted due to the peso exchange rate. Over the past year, the peso strengthened by more than 20% against the U.S. dollar. If the threshold was previously estimated at about COP 4,050 per dollar, it is now around 3,140.

By the end of 2025, the wealth tax temporarily became significantly stricter. Citing an economic emergency regime, Petro issued a decree that lowered the threshold to 40,000 UVT and raised the maximum marginal rates—up to 5%.

However, in April 2026, the Constitutional Court ruled both the emergency measure and the tax decree unconstitutional, restoring the permanent rules. A separate decree regarding a one-time tax on companies’ net worth is still under judicial review. In addition, Petro’s “tax package,” filed in July and designed to raise about COP 21.9 trillion, now appears likely to face resistance from the new administration.

What Repealing the Wealth Tax Could Mean for Foreign Residents

The wealth tax has long affected how attractive Colombia is for foreigners. The key factor is tax residency: if a person spends more than 183 days in the country within a 365-day period, they become a tax resident. That means once the threshold is crossed, they may need to take worldwide net assets into account when calculating the tax.

For holders of investment visas and long-term expats, this is especially sensitive: even when there is a legal basis to remain in the country, the risk of being taxed on worldwide capital can influence relocation decisions and trip length.

According to Brendan Metcalf from MyLatinLife (a Latin America relocation specialist), timing will test how serious the intentions are: if de la Espriella can get the repeal done before the end of the year, it would send a positive signal.

The expert also believes that repealing the tax will noticeably increase Colombia’s popularity as a relocation destination. He notes that while the country attracts tourists, keeping people there long-term is precisely where the tax system becomes an obstacle. Based on his observations, many expats choose Panama for tax-related reasons.

Colombia’s Position in the Regional Tax Landscape

Colombia remains one of the few countries in the region with an annual net wealth tax. Among Latin American economies, such levies are retained in only a limited number of jurisdictions: besides Colombia, they exist in Argentina, Bolivia, and Uruguay. At the same time, Argentina is gradually reducing the rates of its bienes personales tax as part of Javier Milei’s policy.

Meanwhile, many popular relocation countries—including Panama, Costa Rica, and Paraguay—do not impose a wealth tax and instead apply taxation on income under the territorial principle.

Metcalf doubts that Colombia will switch to a territorial model in the near term. In his view, it is hard to imagine a country with a population of over 40 million fully changing its approach to resident taxation—this would be too large a shift. He also notes that the OECD, which Colombia joined in 2020, is unlikely to support such a reversal.

That said, the expert acknowledges that repealing the wealth tax is a “big step.” However, without a territorial regime, the country will not become “super-attractive” specifically for high-income categories.

As the most promising group, he sees retirees. In his assessment, with a well-developed network of double tax treaties and exemptions for foreign pensions (in particular for citizens of Canada, the U.S., and European countries), Colombia has the potential to become a “hub” for relocating retirees. Affordable healthcare, relatively low cost of living, and a favorable climate could further strengthen the effect.

When asked whether the September reform could go further—for example, by reducing income tax rates for foreigners or introducing a preferential regime—Metcalf said yes. He noted that if Colombia implements a program similar to NHR in Portugal (tax holidays for certain categories), demand could be very high.

If you’re considering investment-based residence/citizenship as a way to relocate and legalize your capital, it’s crucial to understand the tax environment of the destination. Recent updates from Colombia point to a shift toward ending the wealth tax and implementing a broader tax system overhaul—changes that may affect investment decisions and long-term financial planning. To review what investment programs are available and what requirements matter for your situation, explore options at https://digital-nomad.gr/en/goldenvisa.

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