Participation in land value increase when selling urban lots or properties in Colombia (Law 388 of 1997): when it arises, when it is paid, and how it differs from valorization and property tax

The betterment levy (participación en plusvalía) is the share of the increase in a plot of land's value that the local territorial entity keeps when an urban planning decision, rather than the owner, makes that land worth more. Many people look for it as the "plusvalía tax" and confuse it with what is paid to the DIAN on the profit from a sale. It is not the same, and knowing this spares you a last-minute surprise at the notary's office.

I think the most costly mistake here is assuming that every lot sale pays plusvalía. Most do not. But when it applies, it is paid before the deed is signed, not on the following year's income tax return.

What it is and what it is not

It is a municipal or district tax, created by Law 388 of 1997 (arts. 73 to 90). Each city council adopts it by ordinance, after the POT or its instruments identify the event that generates the increase in value. It does not operate just because the law exists.

What it is not : it is not the predial (property tax), not the contribución de valorización (betterment contribution), not the ganancia ocasional (occasional gains tax), and not the withholding at source. The last two are national taxes with their own logic, and I do not explain them here.

The three events in article 74

According to art. 74, plusvalía arises from administrative decisions, not from the sale. There are three:

1. Incorporating rural land into urban expansion, or treating part of it as suburban.
2. Establishing or modifying the land use regime or zoning.
3. Authorizing greater use of the land, raising the occupancy index, the construction index, or both.

Think of an urban lot to which a new rule allows more floors to be built: that is where event 3 appears. If the land is commercial or industrial and its use changes, event 2 may apply; for that case, see the guide on industrial and commercial warehouses. And if what you have is a rural property you want to subdivide, that is a different topic: read how to desenglobar un lote rural (split a rural lot from its parent title).

When it is settled and when it is paid

Three moments that people often mix up must be separated: the generating event, the settlement (liquidación), and enforceability (exigibilidad).

According to art. 83 (as amended by art. 181 of Decree Law 019 of 2012), the levy is enforceable against the owner or possessor only if the effect has already been settled and registered in the property registry folio (folio de matrícula inmobiliaria) and one of these situations occurs:

• application for an urbanization or construction license;
• effective change of use;
• act transferring ownership;
• acquisition of titles to additional construction and development rights.

A key detail: the transfer of ownership makes events 1 and 3 enforceable. The change of use (event 2) is collected with the effective change of use, not merely by the act of sale.

As for deadlines: the Minvivienda guide notes that, under art. 81, the settlement is made within 45 days and then there are 30 days to issue and notify the act. The Distrito Capital has its own calendar, so do not mix the two. That calendar belongs to Bogotá. Planeación requests the calculation within 5 business days, Catastro has 60 business days for reference prices, settles within 45 days, and issues the act within 30 business days.

What the notary or the curaduría may request

If the effect is already settled and registered, payment must be proven for the construction license to be issued and for the ownership transfer to be granted. The curaduría does not settle the tax: it requires proof when the effect is already registered.

If it is not settled and registered, the mayor must carry out the procedure of art. 81. That is why it is not true that every notary blocks every sale. Your best tool is the certificado de tradición y libertad: check whether there is a plusvalía annotation. And in the promise, define who proves the payment; in the guide to promesa de compraventa (promise of sale) you will see where to place that clause.

Watch out for "gestores" who charge you for a parallel settlement: the settlement is issued by the territorial entity. In the Distrito Capital, Catastro settles and Hacienda collects. That division belongs to Bogotá. Nothing more is worth paying.

How it is calculated (no pesos)

It is not a percentage of the sale price. The calculation starts from the increase in value per m² generated by the rule. The council, on the mayor's initiative, sets a rate between 30% and 50% of that increase in value, and it may vary between zones. Once the settlement becomes final, the property amount is adjusted with the IPC (consumer price index).

Example from the Distrito Capital. That rate belongs to Bogotá. The rate was 30% in 2004, 40% in 2005, and 50% since January 1, 2006, and the Secretaría Distrital de Hacienda sheet was still publishing it on October 16, 2026. It is a figure for the Distrito Capital only: another territorial entity may be at another point in the range.

Plusvalía is also independent of valorización. Valorización finances a public works project and is distributed among benefited properties according to cost and benefit; plusvalía follows the urban planning rule. If the administration settles plusvalía for the same public works of art. 87, it cannot also charge valorización for them.

Exclusions: be careful about generalizing

In the Distrito Capital, transfer by forced alienation or expropriation in favor of the Distrito, succession by death, the liquidation of marital property, adverse possession (prescripción adquisitiva), and the mandatory early assignment to the Distrito are not moments of enforceability (Decree 790 of 2017, art. 8). It is a district rule, not a national exemption. That exclusion belongs to Bogotá. Do not assume an automatic exemption just because the property is social interest housing either: verify the figure and the rule in force in your territorial entity.

The person who must pay is the owner or possessor; a tenant is not liable for that reason alone. In Bogotá there is joint liability. There, the possessor and the owner are jointly liable.

How to close the sale without surprises

1. Request the certificado de tradición y libertad and check whether there is a plusvalía annotation.
2. Ask the municipal treasury (in the Distrito Capital, Catastro and the Secretaría Distrital de Hacienda) whether there is a settlement and which event of art. 74 caused it.
3. Before the promise, agree in writing who assumes the payment and who provides the receipt.
4. When you publish, state in the listing whether plusvalía is pending, paid, or does not apply; a serious buyer asks about the folio.

A real nuisance: each territorial entity has its own procedure, and official information is scattered across planning, cadastre, and treasury offices.

According to the active listings on Colombia Move (October 2026), there are 39 active listings of lots for sale.

To put together the listing, see how to publish a lot for sale.

Frequently asked questions

❓ Does every sale of a lot or apartment pay plusvalía?

No. It is only paid if the territorial entity adopted the charge, the effect is already settled and registered in the folio, and a moment of enforceability occurs. Check the certificado de tradición and ask the municipal treasury. (verify with the official source)

❓ Can the notary office stop the deed?

It can require proof of payment when the effect is already registered in the folio and the act transfers ownership under events 1 or 3 of art. 74. If there is no registration, it is not an automatic block. (verify with the official source)

❓ Is the change of use charged when selling?

Not by the sale alone. That event is required with the effective change of use; the transfer of ownership covers events 1 and 3 of art. 74. Confirm with your municipal treasury which event appears in your folio. (verify with the official source)

❓ Is it the same as valorización or the predial?

No. The predial is the periodic levy on the property; valorización finances a public works project; plusvalía shares in the increase in value created by the urban planning rule. They are independent of each other. (verify with the official source)

❓ Is 50% the rate for all of Colombia and taken from the sale price?

No. The law allows the council to set between 30% and 50% of the increase in value per m². The 50% since 2006 is the district rate, not a percentage of the sale price. It belongs to Bogotá. (verify with the official source)

❓ In a succession or when liquidating marital property, is it also paid?

In the Distrito Capital, those transfers are excluded as moments of enforceability. That belongs to Bogotá. That exclusion is district-level and should not be extended to the rest of the country; check the rule of your territorial entity. (verify with the official source)

❓ Can I publish the lot while I find out whether there is plusvalía?

Yes, as long as the listing states that the status is pending confirmation in the folio and does not present the property as free of that charge. This helps avoid misunderstandings with buyers and the notary office. (verify with the official source)