La participación en la plusvalía (PP) como instrumento de financiación de desarrollo urbano en Colombia: fortalezas, debilidades y lecciones aprendidas

Abstract

The 1991 Political Constitution of The Republic of Colombia promoted both administrative and tax decentralization of the country, as well as it strengthened land-use planning policies. In this regard, it established that Special Districts and other municipalities must generate their own revenues in order to guarantee self-sustainability and development. For doing so, it gave local and regional governments a free hand in terms of financial strategies for land-use management and capital gains tax (CGT) for the attainment of economic revenues.

In terms of land-use management and planning policies, the surplus value allows to regulate the economic benefits and prevents land speculation by the owner, as well as it assigns a percentage of this surplus value to local administrations to be then redistributed among the community and obtain a collective benefit. In light of Law 388 of 1997, the tax-generating fact is stablished by administrative decisions that authorize a property a more profitable land use or increase the use of the land by permitting a larger built-up area to be profited.

This research, based on a hermeneutic and descriptive-qualitative methodology, analyzes CGT in a critical and argumentative manner as an instrument to collect the necessary economic incomes for the development of districts and municipalities in Colombia. Therefore, its potential strengths, weaknesses, its context of application as well as relevant lessons learned through the investigation are here discussed. In conclusion, it is important to raise public awareness regarding the potential of this instrument as a collective right since more than two decades after the establishment of this tax, its implementation has been very low, not only due to institutional incapacity but also due to lack of political will.