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:
- Low-low class (bajo-bajo)
- Low class (bajo)
- Low-middle class (medio-bajo)
- Middle class (medio)
- Middle-high class (medio-alto)
- High class (alto)
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 over eight 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.
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.
In addition, the government considers the proximity to health services, education services and job opportunities and the estrato is determined on a 1 to 6 scale, with 6 being the highest. This model does not consider the income, the number of people who make up a family, the age, if any of residents have any type of disability or if they have a job.
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.
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.
For example, the following table shows the price for Claro’s following triple play service in Medellín, which has prices that vary by estrato:
- 10 Mbps Internet
- 100 regular TV channels + 60 HD channels
- Fixed line (fijo) telephone service with unlimited calls to fixed line phones
Also, the higher estratos 5 and 6 will have higher utility rates for electricity, gas and water services. While estrato 1, 2 and 3 have lower subsidized rates.
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.
In Medellín, 75.5 percent of homes are rated estrato 1, 2 or 3. And in Bogotá, 86.1 percent of homes are rated estrato 1, 2 or 3.
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.
In the above table, 74 percent of the homes in El Poblado are rated estrato 6. And in Laureles-Estadio, 64 percent of homes are rated as estrato 5. Also, note that about 95 percent of estrato 6 housing in the entire Aburrá Valley are located in El Poblado.
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?
Medellin Guru partnered with RE/MAX Coffee Realty to offer real estate services to foreigners and Colombians interested in buying and selling properties in Medellín and Colombia.
Several Medellin Guru readers have asked about real estate and advice about buying and selling real estate. So, we partnered with RE/MAX Coffee Realty to offer reliable real estate services to readers.
We decided to partner with RE/MAX Coffee Realty for services for buying and selling real estate for several reasons:
- RE/MAX is the largest real estate company in the world and is a well-known brand for foreigners.
- RE/MAX is one of the largest real estate companies in Colombia with 35 offices in four cities (Medellín, Bogotá, Cali and Barranquilla). So, RE/MAX can offer real estate services to readers in several locations in Colombia.
- In Colombia, RE/MAX has over 350 real estate agents including more than 70 agents in Medellín. Also, RE/MAX has agents that are bilingual and speak both English and Spanish.
- RE/MAX ensures properties are not overpriced by performing a study of market property prices known as an ACM (Análisis Comparativo del Mercado).
To use this real estate partner service from RE/MAX, just click on the button below.
Fill out a very short form and RE/MAX offers a free consultation to provide information about the local market, current pricing information and tips for buying or selling properties.
Medellin Guru’s Guide to Renting, Buying and Selling Apartments and Choosing a Neighborhood
On the Medellin Guru website, we have a comprehensive and up-to-date guide to renting apartments, buying and selling apartments and choosing a neighborhood in Medellín found in several articles, including:
Renting Unfurnished Apartments:
- Apartment Rental Guide: Renting Unfurnished Apartments in Medellín
- Guide to Finding Unfurnished Apartments in Medellín and Casas
- Guide to Overcoming the Fiador (Cosigner) Requirement in Colombia
- 2018 Unfurnished Apartment Rental Costs in Medellín
- 6 Inexpensive Neighborhoods for Unfurnished Rentals in Medellín
- Furnishing Apartments: A Guide to Furnishing Apartments in Medellín
- Apartment vs Casa (House) Rentals in Medellín: Pros and Cons
Renting Furnished Apartments:
- Furnished Apartment Rental Costs in Medellín – 2019 Survey Results
- Guide to Finding a Furnished Room for Rent in Medellín
Buying and Selling Apartments:
- Medellín Real Estate: 2020 Property Buyer’s Guide for Foreigners
- Selling Real Estate in Colombia: A Guide to Selling for Foreigners
- Top 17 Mistakes Foreigners Make When Buying Real Estate in Colombia
- Current Costs to Buy New Apartments in Medellín – 2019 Update
- Rent vs Buy: Downsides of Renting and Buying Property in Medellín
- 11 Things Real Estate Agents in Colombia May Not Tell You
- How to Obtain an Investment Visa for Investments in Real Estate
Choosing a Neighborhood in Medellín:
Also, we have several articles that can be used to help foreigners choose a neighborhood in Medellín:
- What are the Safest Neighborhoods in Medellín and the Aburrá Valley?
- 5 Best Neighborhoods in Medellín: A Guide to Choosing a Neighborhood
- 8 Downsides of El Poblado: Living in Medellín’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 Medellín in 5 Neighborhoods Popular with Expats
- 6 Inexpensive Neighborhoods for Unfurnished Rentals in Medellín
The Bottom Line: Understanding Estratos in Colombia
If you are coming to Colombia from another country, you likely won’t know what an estrato is. The system of estratos in Colombia is something unique. And is important to understand estratos when looking at real estate in Colombia either for purchase or rental.
The bottom line is the estrato rating for a property in Colombia will define the utility rates you pay. The homes in higher estratos 5 and 6 pay higher utility rates to subsidize the lower utility rates paid by homes in the lower estratos (1 to 3).
The estrato system in Colombia in some ways defines social classes. But there are some wealthy Colombians living in lower estratos such as estrato 3.
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