You’ve decided to take the leap, and Build a Home in Pereira. Or maybe you are looking to buy and remodel. Your dream summer home in a perfect climate to escape winters in North America. Maybe you plan to relocate and enjoy your retirement. Or, maybe you have been sent abroad by your job and liked it enough to stay permanently. Could there even be romance involved?
How to Build a Home in Pereira
Whatever the case we are going to guide you through the process and impart information to anyone who wants to buy property and/or build a Home in Pereira. We interviewed Thomas Zilly, the main architect/owner of G.E.T. Global Constructions, and he helped us understand the situation a bit better.
Check out Thomas’ page here: pereiracityguide.com/places/german-engineering-technologies-constructions-thomas-zilly/
As property values continue to rise, there are still a few affordable tracts of land that can be had in the Pereira area if you know where to look. And, there are a few flood plains and landslide zones which you should also watch out for too. Always ensure you don’t have any natural features which lend themselves to erosion, or that it is something you can affordably control over time.
The most important thing to be aware of, is the new VAT tax (Value Added Tax), known as “IVA” (Impuesto Valor Adicional) in Spanish, and its application to real estate. Current land-owners/purchasers do not pay this tax. Anyone who is buying land, in 2017 and onward, will be responsible to pay VAT/IVA on anything over 800,000,000 pesos or $274,108 USD. This data is based on the analysis by Richard McColl on Colombia Calling Episode 170: “Everything You Need to Know About Colombian Tax Reform 2017”, the Podcast is embedded at the bottom of this article. Do listen to it.
If you are using your life’s savings to buy property in Colombia, definitely avoid paying the VAT tax by buying a cheaper property, of which there are still many options that are really nice starting around $90-100,000 USD. For those to whom money isn’t an issue, make sure you plan for a 19% tax upon filing your purchase. Fortunately, you can greatly reduce or even avoid yearly taxes if you invest in certain types of agricultural properties (such as cocoa), or by having a natural forest preserve on your land.
Click this link to see a property listing for a high-end property, with a natural forest preserve which reduces yearly taxes by over 50% on this Home in Pereira: pereiracityguide.com/places/country-estate-spa-hotel-lodge-potential/
Finalizing the Purchase
The most stressful part of the whole process is this one step. Finalizing the purchase. It will require you to pay the down payment in cash directly to the property owner (typically 10-20% of value), and then trust that owner to go file a document with the notary office saying that he received payment. Once he does file this paper, the property is yours as long as your bank is ready to step in and pay the balance, or you already have the rest of the money.
If you are buying from a real estate agent, then things are much cheaper. Our expert, Thomas, works with a good lawyer who can help you navigate the purchase safely, and secure your visa. After this, everything is finished within a week or two, and you are the owner of a Home in Pereira.
For real estate in Pereira, we recommend: Gestion Inmobiliaria del Eje Cafetero pereiracityguide.com/places/gestion-inmobiliaria-del-eje-cafetero/
Getting the Proper Permits and Permissions
A piece of advice which Thomas had for me during our chat was this:
“In Colombia you find good companies and skilled workers. You have to know them. (There have been) many unhappy adventures and you will lose money. Of course you will not be able to do the supervision by yourself. There is a language problem and you must have the right people on your side.” – Thomas Zilly, G.E.T. Global Constructions
You can build pretty much anything you want in Colombia. This is due to a very loose law about final inspections. Don’t let this loophole result in a poorly built home. Many people have lost their money due to a low local standard of quality and lack of skilled labor.
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Constructing Your Home in Pereira
The homebuilding process is different for everyone, but there are a few commonalities which you will see in Colombia. Many builders opt to pour rebar reinforced concrete as support columns with brick or cinderblock. And, many still use Guadua Bamboo, a sustainable natural material that is earthquake resistant.
For an idea of How to Build a Home in Pereira, here’s what the construction looks like, check out this blog article by Michael and Graciela, a blogger team located in Bogota
When you contract with an architect/homebuilder such as Thomas Zilly, you are working with someone who can help navigate the language barrier, who is knowledgable of which local builders have a good reputation. You will be receiving a product which meets international standards in both safety and quality.
Typical Homebuilding Materials: Tropical hardwoods, concrete, brick, cinderblock and guadua.
Materials to Avoid: Anything that is banned internationally, such as asbestos. The common roof sheeting which is used throughout Colombia has asbestos in it. Watch out for paint which is lead-based.
Securing Your Home in Pereira
Home security in Pereira is very important. And, here is what Thomas (who has lived in Colombia for 20+ years) had to say about securing a home:
“If it is outside a condominium and you buy a 4-6,000 square meter lots and build your own house. It could be a problem in the future. As a foreigner you should be aware that people will know you. They will study your habits so they know maybe when you are at home and when you are not. So first you should have your land somehow protected.”
Here is the shortlist of considerations for home security in the outlying/rural areas of Colombia:
- The lot should be difficult to enter, (if not inside a condominium or fenced area). Invest in a gate.
- It should be difficult or impossible for others to observe you and your family’ habits, play arFeas, parking zones.
- Consider having a privacy fence or natural hedge/barrier around the property, called: swingla.
- Consider working together with your neighbors to pay a security company.
- Consider owning 2-3 dogs. Thomas recommended Rhodesians, Dobermans or Rottweilers.
- Consider having a CCTV, or closed circuit security camera system which monitors the property.
Long Term Considerations for Real Estate in Colombia
As always, real estate is the gold standard in overseas investments. Colombia is a country that is very mineral rich, with many areas which have been made fertile due to volcanic soils, and a biodiversity that is unmatched anywhere else. Pereira is a farm zone which is a bit overused due to monoculture, but still full of potential, for people who are willing to take the time to revive the soil. Lots of love needed. But, compared to many American farm areas, the soil here is still fertile in comparison.
This region is quickly racing towards overpriced from a Colombian perspective. From an expat/immigrant perspective it is still very low-priced, especially for people who can come with dollars in bank ready-to-spend. Even those who come from meager origins, have potential to find extremely affordable properties which will retain, and even increase in value, over time. Which brings us back around to expected economic growth and the new tax reforms in Colombia.
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The outlook is quite positive. In spite of current infrastructure shortcomings. The 2017 expectation for tourism is higher than ever and could result in a higher number of visitors. This is also an advantage for people who want to invest in real estate, where cultural building habits tend to diverge from those coming from more developed countries.
For example, many kitchens in Colombia, even in fancy apartments, do not come with an oven. Many bathrooms do not come with heated water, even in some upper-class homes and fincas. The smart American-style builder will have a really nice long-term home or investment, which could very easily out-class the competition if/when the time comes to sell it.
Colombia is a vast well of opportunity for people who can come with an open mind and a sustainable outlook. You must be oriented towards long-term investments. Steer away from short-term expectations. Hyper-inflation has happened in the past. But, we also have vast natural resources, climate and biodiversity. Especially in many post-collapse scenarios, we have some great advantages which include wet/dry seasons and a nice year-round spring/summer climate and almost constant local food production.
This article is sponsored by G.E.T. Global Constructions, and guided by the expert advice of Thomas Zilly who answered our questions about how to build a home in Colombia. Below is a Slideshare which tells Thomas’ story about the Armenia earthquake and his first experience with Guadua bamboo 18 years ago.
Colombian Tax Reform
Colombian Economic Growth