Not All Sales of Property Held for More Than Two Years Are Occasional Gains

Tax attorney Alberto Posada wrote an article for Asuntos Legales about a ruling from Colombia's Supreme Court regarding the tax effects of sales of real property. Mr. Posada explains that the general rule is if the property was held for more than two years, profits from selling it are considered occasional gains taxed at 15 percent; if this were not the case, they would be considered ordinary income taxed at a higher rate. However, in Sentence No. 28994 of May 8, 2025, the Fourth Section of the Supreme Court affirmed the National Tax and Customs Directorate's (DIAN) decision to reclassify a real estate sale as ordinary income, even though the property in question was owned for more than 40 years by the same company. In this article, the author analyzes the court's reasoning and the implications of its conclusions for taxpayers and businesses.

READ: Not All Sales of Property Held for More Than Two Years Are Occasional Gains