Bogotá Tax Reform Passes in Colombia, Seeking About US$324 Million a Year
ECONOMY · COLOMBIA
Key Facts
- —The country Colombia. Bogotá, the capital and largest city, sets its own property tax and ICA, a municipal tax on business revenue.
- —What happened On 28 September 2026 the city council passed Mayor Carlos Fernando Galán’s tax reform in its second and final debate. It now awaits his signature.
- —The numbers The city finance office expects about COP 1.08 trillion (about US$324 million) a year from 2027. ICA rates fall for 275 activities and rise for 169.
- —What it means for you Homes in estratos 4 to 6 pay a lighting surcharge of about COP 11,000 to 29,000 (about US$3.30 to US$8.70) a month from 2027.
- —Still open The signing date, and whether promised lawsuits over the council procedure reach the administrative courts. Debt relief runs until 21 December 2026.
The Bogotá tax reform cleared the city council on 28 September, after its second and final debate. Mayor Carlos Fernando Galán’s plan funds smart street lighting through higher-value homes and reshapes the main business tax.
The city finance office expects about COP 1.08 trillion (about US$324 million) a year in extra revenue from 2027. Critics on the left say the burden falls on households, and two councillors signalled legal challenges.
What the Council Approved
The text is formally called the Agreement for a Smart City and merges draft accords 709 and 724 of 2026. It becomes law only after Galán signs it and it is published, El Espectador and KienyKe reported.
Several measures then apply from 1 January 2027. Conversions here use the rate of 29 September 2026, COP 3,334 per US dollar.
The administration also projects COP 78.3 trillion (about US$23.5 billion) in private investment and 215,000 jobs over ten years.
Who Pays More and Who Pays Less
The core of the Bogotá tax reform is a property-tax surcharge for LED street lighting with sensors and remote management. Homes in estratos 4 to 6, the upper tiers of Colombia’s six-level housing scale, pay 0.4 per 1,000 of their value.
That averages about COP 11,000 (about US$3.30) a month in estrato 4 and COP 19,000 (about US$5.70) in estrato 5. Estrato 6 homes pay about COP 29,000 (about US$8.70), La República and El Espectador reported.
Estratos 1 to 3 are exempt unless a home is valued above 20,000 tax units, about COP 1,047 million (about US$314,000). Commercial, industrial and financial properties pay 1 per 1,000.
The reform cuts the number of ICA rates from 13 to nine, with 275 activities paying less and 169 paying more. Finance rises from 14 to 20 per 1,000 in 2027, easing to 18 from 2029.
Alcohol and tobacco trade rises to 19 per 1,000, and car dealers pay more, most for conventional vehicles. Bars fall from 13.8 to 11 per 1,000, restaurants to 12 and book publishing from eight to four.
The outdoor-advertising tax and a unified tax on gambling and public shows disappear from 2027.
Supporters and Critics
Finance Secretary Ana María Cadena said Bogotá “prepares for the future, attracts private investment and creates jobs” over the next decade.
Pacto Histórico councillor Jairo Avellaneda said the administration was putting its hand in residents’ pockets. He argued that merging the two drafts broke council rules and could ground a lawsuit, El Espectador reported.
His colleague Heidy Sánchez said she will sue over procedure and substance, Infobae reported. She put the cost of incentives for large investors and property projects at about COP 146 billion (about US$44 million) a year.
MIRA party spokesman Samir Bedoya said the reform also removes a cap that limits yearly property-tax increases. That change, he argued, was not explained in any reform document.
What It Means for Residents and Investors
For residents who own homes in estratos 4 to 6, the 2027 property-tax bill carries the new surcharge. An estrato 6 home adds about COP 348,000 (about US$104) a year, according to La República.
Taxpayers with overdue debts get a 60% cut in interest and penalties if they settle by 21 December 2026. The city says more than two million taxpayers could qualify.
New firms investing at least COP 4,610 million (about US$1.4 million) in 92 strategic activities can win ICA exemptions if they create 30 direct jobs. Banks face the heaviest new cost, as Bogotá Moves to Raise Its Bank Turnover Tax by Half reported during the debate.
What Is Not Yet Known
It is not yet known when Galán will sign the accord. Each property’s surcharge depends on its value, because the published monthly figures are averages.
No lawsuit had been filed as of 29 September, and no court has ruled. The revenue and jobs figures remain official estimates until the first 2027 bills and investment data arrive.
Frequently Asked Questions
What does the Bogotá tax reform change?
It adds a property-tax surcharge for smart street lighting, cuts ICA rates from 13 to nine and offers debt relief. The council approved it on 28 September 2026.
Who pays the new lighting surcharge?
Homes in estratos 4 to 6 pay about COP 11,000 to 29,000 (about US$3.30 to US$8.70) a month on average. Estratos 1 to 3 are exempt unless valued above 20,000 tax units.
When does the Bogotá tax reform take effect?
It applies after the mayor signs and publishes it, with several measures from 1 January 2027. The debt-relief window closes on 21 December 2026.
Sources: El Espectador; KienyKe; La República; Infobae. Exchange rate: open.er-api.com, 29 September 2026.
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