Colombian President Abelardo De La Espriella used his August 7 inaugural address to announce, among other things, that his government will abolish the country’s wealth tax and present a structural reform of the tax system. “I said it as a candidate, and today I confirm it as sitting president: The wealth tax will be eliminated,” he told the crowd at his swearing-in ceremony in Cali.
The president 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.”
Prosperity, in his words, “is not born of taxing success but of creating conditions” for Colombians to build businesses and progress.
Finance Minister Miguel Gómez Martínez 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 that Congress pass a reform.
Mikkel Thorup, founder of Expat Money, is “more optimistic about the proposed wealth tax repeal than I would be about a typical campaign promise,” citing conversations with partners on the ground.
The new government, he notes, is entering the first-100-day “legislative honeymoon,” when major reforms have historically faced less resistance; “that same window helped make the wealth tax permanent in 2022.”
If repeal is prioritized early and the revenue gap addressed, he sees “a credible path” to taxpayers seeing relief “as early as 2027.”
A Tax in Legal Limbo
Colombia’s wealth tax was made permanent by the 2022 reform of 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 COP 3.77 billion (approximately US$1.2 million) in 2026, with marginal rates of 0.5%, 1%, and 1.5%; the top rate is scheduled to lapse after 2026, leaving 1% as the ceiling.
Residents owe the tax on worldwide assets, while non-residents pay only on Colombian ones.
The dollar value of that threshold has climbed as the peso has rallied more than 20% against the dollar over the past year, up from roughly 4,050 per dollar to about 3,140 today.
The levy briefly became far harsher at the end of 2025. Invoking a state of economic emergency, Petro 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.
The Constitutional Court struck down both the emergency declaration and the tax decree in April 2026, reviving the permanent rules. 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.
What Elimination Would Mean for Foreign Residents
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 his 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.
For Brendan Metcalfe of MyLatinLife, a Latin America relocation specialist, the timeline is the test: if De La Espriella “can remove it by the end of the year, that would be a positive signal.”
Elimination, he contends, “would greatly increase Colombia’s popularity” as a relocation destination, further noting that the country “attracts a lot of tourists but has a difficult time retaining them long-term due to the tax system,” with many expats “opting for Panama instead due to tax concerns.”
Thorup argues the bigger benefit would be simplicity rather than savings. With proper fiscal advice, the tax “can already be legally mitigated,” he explains, but that requires “sophisticated structures that cost money to establish and maintain.”
For many high-net-worth individuals, he adds, “the real burden isn’t necessarily the tax itself; it’s the complexity of planning around it,” meaning elimination would “lower the barrier to entry” for those who don’t want to structure their affairs around a single tax.
Colombia in the Regional Tax Picture
Colombia is one of a dwindling group of wealth-tax holdouts in the region: among Latin American economies, only Argentina, Bolivia, Uruguay, and Colombia still levy recurring net wealth taxes, and Argentina has been winding its bienes personales rates down under Javier Milei.
Meanwhile, popular expat destinations in the region, such as Panama, Costa Rica, and Paraguay, do not impose a wealth tax and tax income on a territorial basis.
Metcalfe doubts Colombia will ever join that last camp, saying that it’s hard to imagine “a 40-million-plus person country going from residence-based taxation to territorial; it’s too big a change,” and the OECD, which Colombia joined in 2020, “wouldn’t like it either.”
Scrapping the wealth tax “is a great step,” he grants, but without territorial treatment the country won’t be “super appealing to high earners.”
The bigger potential prize, in his view, is retirees. With “a decent double taxation treaty network and an exemption for foreign pensions of Canadians, Americans, Europeans,” Colombia “has potential to be a retiree hotspot,” combining good healthcare, low costs, and a favorable climate.
Asked whether the September reform could go further, perhaps with reduced income tax rates for foreigners or some form of tax holiday, Metcalfe was enthusiastic about the latter: “If Colombia did a Portugal NHR-style tax holiday program, it would be oversubscribed.”
Thorup’s list of what would make Colombia genuinely competitive runs longer: “a more attractive regime for new residents, lowering income-tax rates, expanding the treaty network, reducing transaction taxes, and simplifying compliance.”
But he cautions against measuring the country by its neighbors’ tax codes. Colombia’s real advantage “is the complete package: climate, culture, cities, opportunity, resource security, and quality of life,” and the goal “shouldn’t be to out-Panama Panama or out-Uruguay Uruguay” but to offer the best value-for-money it can, with “real tax efficiency through proper legal planning.”
