It is very important to understand estratos when looking at real estate in Colombia. Residential properties in Colombia are ranked in a socioeconomic scale, which are known as “estratos” (stratum).
Estratos in Colombia run from 1 to 6, as follows:
If you are planning to become an expat in Colombia, you should find out the estrato of the area you are planning to move to. Estrato 1 or 2 may put you in a neighborhood that is less than desirable. And you should be aware that estrato 5 or 6 will have higher utility rates.
Also, it is important to understand that middle class in Colombia is not the same as middle class in a wealthy country like the U.S.
Several Medellin Guru readers have recently asked questions about estratos. So, we now look at estratos in Colombia in detail.
In the past years I have lived in Medellín, I lived for one month in estrato 6, three years in estrato 5, five years in estrato 4 and over three months in estrato 3. Most foreigners living in Colombia tend to live in estratos 3 to 6.
Also, when we looked at unfurnished apartment rental prices in Medellín, we only included properties in estratos 3 to 6. If you want personalized advice and review a wide range of properties by strata, click on the green button below to get advice with our partner specialized in real estate.
Medellin Guru Real Estate Service
Our reliable partner, a leading real estate company, offers a wide range of services:
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What is an estrato? History of Colombia's estrato system
The estrato system in Colombia was devised in the mid-1990s, in a country that at the time which had poverty rates close to 40 percent. And the estrato system in Colombia is reportedly unique in the world.
A 1994 law provides the instrument that allows a municipality to classify its population in distinct groups or estratos, which established subsidies that would help those in the lower estratos pay for utilities.
In order to decide which estrato a home belongs to, the government limits itself to evaluating the façade, the materials with which the roof is built and the conditions of the road in front of the home.
So, it is important to understand that estrato does not correlate to income. According to DIAN, the IRS of Colombia, about 20 percent living in estrato 3 are in the top 20 percent of the incomes in Colombia but they receive utility subsidies (lower utility rates) for living in estrato 3.
In 2024, new housing evaluation projects have been announced that imply the end of stratification in Colombia. But that will take years or even decades to change how the whole economic system works.
Higher estratos pay higher utility rates
It is important to understand that homes in the higher estrato neighborhoods in Colombia pay higher utility rates to help subsidize lower utility rates in the lowest estratos.
Homes in estrato 5 and 6 pay higher utility rates to subsidize lower utility rates in estrato 1, 2 and 3. And homes in estrato 4 doesn’t pay extra or receive subsidies.
With the new stratification projects, some things have changed. For example, The following table shows an approximate the price for Claro Hogar, Tigo Hogar and Movistar Hogar plans which in the past, prices varied by estrato, but now, varies by quality.
Internet price comparison in Colombia by Estratos
From 500mbps to 900gbps, TV and phone (TRM rate reference 4.000 COP/USD)
In relation to public services, the higher estratos 5 and 6 still have higher utility rates for electricity, gas and water services. While estrato 1, 2 and 3 have lower subsidized rates that high strata bills cover.
Also, in general, homes in higher estratos tend to have higher rental prices and purchase prices per square meter than in lower estratos. Also, property taxes can be higher in the higher estratos. If you rent, property taxes are typically paid by the owner.
Where do Colombians live? Which estrato?
The majority of Colombians live in estrato 1, 2 or 3 homes, which represents about 80 percent of the housing in Colombia. In addition, the wealthy estrato 6 in Colombia represents only about 3 to 4 percent of the housing in Colombia.
The distribution of homes in estratos in cities in Colombia varies by the city. And some small pueblos in Colombia may not have all six estratos. The following table shows the percentage of homes in the four largest cities in Colombia in each estrato.
If you are an expat, you should select a neighborhood in a suitable stratum that offers security, comfort and a cost of living in line with your income. We advise you to speak directly with a real estate agent. Whether you are looking to buy or rent, it is best to get professional advice before deciding where to live.
Estratos in Medellín and the Aburrá Valley
The distribution of homes in estratos in the comunas in Medellín and municipalities also varies. The following table shows the percentage of homes in each estrato in the comunas in Medellín as well as the average estrato.
The distribution of homes in estratos in cities in Colombia varies by the city. And some small pueblos in Colombia may not have all six estratos. The following table shows the percentage of homes in the four largest cities in Colombia in each estrato.
In Medellín, 42% percent of the population belongs to the lower strata, 46% to the middle level and 12% expressed that they belong to the high level of social and economic stratification.
Can you change the estrato for an apartment or casa?
Is it possible to change an estrato for an apartment or casa (house)? Perhaps you will find that the home across the street is a lower estrato and you may want the estrato of your home re-evaluated.
Sometimes the estrato ratings don’t make sense. For example, when we lived in Belén, a neighbor didn’t understand why his building was rated estrato 5 when we were in a nicer and newer building a block away that was rated estrato 4.
Any person or group of people can file a claim for the estrato assigned by the mayor’s office for your home. This claim is filed with the mayor’s office of your municipality, which has the legal obligation to address the claim and resolve it within a maximum period of two months.
Once the notification of the mayor’s office decision has been received, if the user is not in agreement it can be appealed to the Comité Permanente de Estratificación, which also has two months to resolve it.
Are you looking to buy or sell Real Estate in Colombia?
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To access this real estate partner service from Real Estate by expatgroup.co, click the button below, complete a brief form, and receive a complimentary consultation offering insights into the local market, current pricing, and tips for buying or selling properties.
Medellin Guru Real Estate Service
Our reliable partner, a leading real estate company, offers a wide range of services:
- Transfer funds to Colombia
- Legal analysis property background checks
- Sales agreement
- Deed registration
- Legal representation
- Investment visa
Medellin Guru Blogs: Real Estate Series
On the Medellin Guru website, we have a comprehensive and up-to-date guide to buying, selling, and renting apartments and choosing a neighborhood in Medellin found in several articles, including:
Buying and Selling Apartments
- Medellin Real Estate: Property Buyer’s Guide for Foreigners
- Selling Real Estate in Colombia: A Guide to Selling for Foreigners
- Mistakes Foreigners Make When Buying Real Estate in Colombia
- Current Costs to Buy New Apartments in Medellin
- Rent vs Buy: Downsides of Renting and Buying Property in Medellin
- 13 Things Real Estate Agents in Colombia May Not Tell You
- How to Obtain a Colombia Investment Visa
Renting Unfurnished Apartments:
- Apartment Rental Guide: Renting Unfurnished Apartments in Medellin
- Guide to Finding Unfurnished Apartments and Casas in Medellin
- Guide to Overcoming the Fiador Requirement in Colombia
- Unfurnished Apartment Rental Costs in Medellin
- 6 Inexpensive Neighborhoods for Unfurnished Rentals in Medellin
- Furnishing Apartments: A Guide to Furnishing Apartments in Medellin
- Apartment vs Casa (House) Rentals in Medellin: Pros and Cons
Renting Furnished Apartments:
Choosing a Neighborhood in Medellin:
Also, we have several articles that can be used to help foreigners choose a neighborhood in Medellin:
- Laureles: The world’s coolest neighborhood for 2023 by ‘Time Out’ is in Medellin, Colombia
- What are the Safest Neighborhoods in Medellin and the Aburrá Valley?
- 5 Best Neighborhoods in Medellin: A Guide to Choosing a Neighborhood
- 9 Downsides of El Poblado: Living in Medellin’s Expensive Neighborhood
- Estratos: A Guide to Understanding Estratos in Colombia
- El Poblado vs Laureles: Which is the Better Neighborhood to Live in?
- El Poblado vs Envigado: Which is the Better Neighborhood to Live in?
- El Poblado vs Sabaneta: Which is the Better Neighborhood to Live in?
- El Poblado vs Belén: Which is the Better Neighborhood to Live in?
- 2018 Unfurnished Apartment Rental Costs in Medellin in 5 Neighborhoods Popular with Expats
- 6 Inexpensive Neighborhoods for Unfurnished Rentals in Medellin
Airbnb in Colombia:
- 9 Strategies to Find Killer Deals on Airbnb in Colombia
- 15 Things to Know Before Investing to Become an Airbnb Host in Colombia
- 10 Airbnb Best Practices for Airbnb Hosting in Colombia
- 9 Tips to Attract Long-Term Airbnb Guests in Colombia
- 7 Strategies for Airbnb Slow Season in Colombia
- How to Identify Problem Airbnb Guests in Colombia Before They Book
- 15 Ways to Increase Your Airbnb Search Rank In Colombia
- How Safe is Airbnb in Colombia? Is it Safe to Use Airbnb in Colombia?
- Airbnb Travel Itinerary for Your Airbnb Guests in Colombia
- How to Get Started on Airbnb in Colombia: A Guide
The Bottom Line: Estratos - A Guide to Understanding Estratos in Colombia
An “estrato” in Colombia is a stratification system that classifies residential properties into different socioeconomic strata. This classification is crucial for the provision of public utilities, as it allows for differential charging for services based on the economic capacity of the residents in each stratum.
The goal is to ensure that those with higher economic capacity contribute more towards public services while also enabling subsidies to be assigned to those in lower strata, thereby assisting them in paying their utility bills. Overall, the estrato system is a mechanism to promote equity in access to public services and utility payments.
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