Colombia Vows to Eliminate Its Wealth Tax: What It Means and What It Does Not

On August 7, in his inaugural address in Cali, President Abelardo De la Espriella announced his government will eliminate Colombia's wealth tax. It is a real political promise, backed by a finance minister with a filing date for Congress. It is also, still, only that: a promise. Here is what the law says today, what would change, and why the tax's recent volatility is the real lesson for anyone with net worth on the line.

What the new president announced

"I said it as a candidate, and today I confirm it as sitting president: the wealth tax will be eliminated," De la Espriella told the crowd at his swearing in ceremony. He framed the move as the centerpiece of a pro investment agenda, arguing that Colombia "must stop punishing those who invest and generate wealth" and pledging that "investing in Colombia will once again be a safe decision."

Finance Minister Miguel Gomez Martinez has indicated the government will table its tax reform bill in Congress in September, after first rolling out a fiscal adjustment plan through administrative measures. Repealing the wealth tax cannot happen by decree. The tax is anchored in statute, so elimination requires Congress to pass a reform.

What the law says today

Colombia's wealth tax was made permanent by the 2022 reform under outgoing president Gustavo Petro (Law 2277 of 2022). It applies to individuals holding net assets of at least 72,000 UVT (tax value units) on January 1 of each year, equivalent to roughly COP 3.77 billion, about US$1.2 million in 2026.

Marginal rates are 0.5%, 1%, and 1.5%. The top rate is scheduled to lapse after 2026, leaving 1% as the ceiling. Colombian tax residents owe the tax on worldwide assets, while non residents pay only on Colombian ones.

Why this matters: 6 months of whiplash

In late 2025, invoking a state of economic emergency, the Petro government issued a decree slashing the threshold to 40,000 UVT and raising marginal rates as high as 5%, at the time the steepest statutory wealth tax rate in any major economy.

Colombia's Constitutional Court struck down both the emergency declaration and the tax decree in April 2026, reviving the permanent rules in force today. A separate emergency decree imposing a one off net worth tax on companies remains under the court's review, and Petro's parting tax bill, filed in July to raise COP 21.9 trillion, now faces an incoming administration determined to shelve it.

In under six months, this tax swung from 1.5% to 5% by decree, then back to 1.5% by court ruling. That is the real lesson behind the August 7 announcement: a tax that can move like that, without ever going through Congress, is not something to plan around based on a campaign promise. It is exactly the kind of risk legal structure exists for.

What elimination would mean for residents and foreigners

The wealth tax has long complicated Colombia's pitch to foreigners. Anyone spending more than 183 days in the country within a 365 day period becomes a tax resident, exposing worldwide net assets to the levy once the threshold is crossed, a real consideration for holders of the country's investor visas and long stay expats alike.

Colombia is one of only four Latin American economies that still levy a recurring net wealth tax: Argentina, Bolivia, Uruguay, and Colombia. Meanwhile, popular expat destinations in the region such as Panama, Costa Rica, and Paraguay impose no wealth tax and tax income on a territorial basis.

What to do while Congress decides

The presidential promise does not change a single tax obligation today. If you already hold net worth above the threshold, you remain subject to the current rules until Congress passes something different, and that process can take months or fail entirely. With proper advice, the tax can already be legally mitigated today through appropriate structures, whether international vehicles, residency planning, or the right timing on wealth decisions.

And if you are weighing Colombia as a base, whether you already live there or are considering it, the conclusion does not change with this announcement: the right legal structure protects you regardless of what Congress does in September. Relying on a campaign promise is not a wealth strategy.

Frequently asked questions

This content is informational and educational. It is not legal or tax advice. Verify current regulations and consult a specialist about your case before making decisions.