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- Real Estate and Taxes
13/01/2023, updated 11/09/2025
Rental Income Tax
Rental income generated by your real estate properties in Chile is subject to income tax and must be declared in your annual tax return (Form 22). This income is added to your other income sources and taxed according to the Chilean progressive income tax scale.
Possible Deductions
You can deduct from your rental income:
- Maintenance and repair costs
- Gastos comunes (condominium fees)
- Property insurance premiums
- Annual depreciation (3% of property value per year)
- Rental management fees
- Mortgage interest
Special Regime for Non-Residents
If you are not a Chilean tax resident, your rental income is subject to a flat tax of 35% on the gross amount, with no possibility of deductions.
Capital Gains Tax
Since the 2017 tax reform, the sale of real estate is subject to capital gains tax in Chile. This tax applies to all types of real estate (land, houses, apartments, commercial premises).
General Rules
- Properties purchased before 2004: exempt from capital gains tax
- Properties purchased after 2004: capital gains taxed at 10%
- Capital gain calculation: Sale price - Purchase price adjusted for inflation (IPC)
Exemption for Individuals
Individuals benefit from a cumulative lifetime exemption of 8,000 UF. This exemption works as a "credit" that decreases with each sale generating a capital gain.
Practical example:
- 1st sale: Capital gain of 5,000 UF → No tax, remaining credit: 3,000 UF
- 2nd sale: Capital gain of 4,500 UF → Tax on 1,500 UF (4,500 - 3,000) = 150 UF tax
Special Cases
Co-ownership
In case of shared ownership, the capital gain is distributed proportionally to each co-owner's share, each using their own exemption credit.
Inheritance
The inherited property is revalued at its market value at the time of succession. This new value serves as the basis for calculating future capital gains.
Tax Residency
- Tax residents: Benefit from the 8,000 UF exemption
- Non-residents: 35% tax on total capital gain, without exemption
Companies
Companies do not benefit from the 8,000 UF exemption. They pay corporate tax (27% in 2024) on their real estate capital gains.
Value Added Tax (IVA/VAT)
Chilean VAT (19% in 2024) applies in several real estate situations:
1. Furnished Rental
Any rental considered "furnished" is subject to 19% VAT. You must:
- Register with SII as a VAT taxpayer
- Issue electronic invoices
- Declare and pay VAT monthly
Important: An Airbnb rental with services (cleaning, linens) is generally considered furnished.
2. Sale of New Properties
The purchase of new real estate directly from a developer is subject to 19% VAT, in addition to the sale price.
3. "Habitual" Sales
A sale is considered "habitual" (and therefore subject to VAT) if:
- You resell within 12 months of purchase
- You resell within 12 months of delivery (off-plan purchase)
- You have regular buying-selling activity
How to avoid VAT: Rent the property for at least 12 complete months after acquisition before reselling.
Property Tax (CBR)
The Contribución de Bienes Raíces is the equivalent of French property tax. It is payable in 4 quarterly installments (April, June, September and November).
2024-2025 Calculation
The calculation base is the avalúo fiscal (tax assessment), which generally represents 50-70% of market value.
Progressive scale for residential use:
- Exemption: up to 26,840,000 CLP of tax assessment
- Bracket 1: 1.0% from 26,840,000 to 95,953,200 CLP
- Bracket 2: 1.2% above 95,953,200 CLP
Calculation Example
For a property with tax assessment of 120,000,000 CLP:
- Exempt bracket: 26,840,000 CLP → 0 CLP
- 1% bracket: (95,953,200 - 26,840,000) × 1% = 691,132 CLP
- 1.2% bracket: (120,000,000 - 95,953,200) × 1.2% = 288,564 CLP
- Annual total: 979,696 CLP (i.e., 4 payments of 244,924 CLP)
Adjustments
Amounts are adjusted semi-annually according to the IPC (Consumer Price Index). Updated values are available on the SII website.
Tax Assessment
The avalúo fiscal is determined by:
- Land area
- Built area
- Construction characteristics
- Location
Warning: Not declaring extensions to reduce the tax assessment constitutes an infraction punishable by fines.
Stamp and Seal Tax (Real Estate Credit)
Although not strictly a real estate tax, the impuesto de timbres y estampillas applies to all credits in Chile, including real estate loans.
2024 Calculation
- Rate: 0.066% of credit amount per month
- Cap: Maximum 0.8% of total credit amount
- Payment: In one payment at credit signature
Example
For a real estate loan of 100,000,000 CLP over 20 years (240 months):
- Calculation: 100,000,000 × 0.066% × 240 months = 15,840,000 CLP
- But capped at 0.8%: 100,000,000 × 0.8% = 800,000 CLP
- Tax to pay: 800,000 CLP
Declaration Obligations and Penalties
Mandatory Declarations
- Rental income: Annual declaration in April (Operación Renta)
- Capital gains: Declaration within 3 months of sale
- VAT: Monthly declaration if applicable
- Property taxes: Automatic payment, no declaration required
Penalties
In case of non-compliance with tax obligations:
- Fines: 10% to 30% of tax due, plus late interest
- Serious cases: Up to 200% fine and possible criminal prosecution
- Undeclared VAT: Possible administrative closure
Practical Advice
- Keep rigorous accounting of your income and expenses
- Keep all receipts for at least 6 years
- Consult a specialized accountant to optimize your taxation
- Systematically declare your furnished rentals to the SII
Rental Income Tax
Rental income must be declared in your annual tax return (Form 22). It is added to your other income and taxed according to the progressive income tax scale.
Yes, you can deduct necessary expenses to generate income: maintenance, repairs, common expenses (gastos comunes), insurance, depreciation (3% per year), and rental management fees.
Furnished rental: subject to VAT (19%) and must be declared to SII. Unfurnished rental: no VAT but income still taxable under income tax.
Capital Gains Tax
Capital gains tax applies when selling property purchased after 2004. The rate is 10% on capital gains, with a cumulative lifetime exemption of 8,000 UF for individuals.
Capital gain = Sale price - Purchase price adjusted for inflation (IPC). If the capital gain exceeds your remaining exemption credit, the excess is taxed at 10%.
Yes, but only if you are a Chilean tax resident at the time of sale. Non-residents pay 35% tax on the total capital gain.
The inherited property is revalued at its market value at the time of inheritance. This new value serves as the basis for calculating future capital gains.
Real Estate VAT (IVA)
VAT (19%) applies to: 1) Purchase of new properties directly from developers, 2) Sales considered 'habitual' (resale within the year following purchase or delivery).
You must rent the property for at least 12 months after delivery before selling it to avoid being considered 'habitual'.
If considered furnished rental with services (cleaning, linens), yes. An Airbnb rental without services may be unfurnished depending on circumstances.
Property Tax (CBR)
Based on the avalúo fiscal (tax assessment). 2025 rates: exemption up to 26,840,000 CLP, then 1% up to 95,953,200 CLP, and 1.2% above. Payable in 4 quarterly installments.
No, the avalúo fiscal is generally 50-70% of market value. It is based on built area and land area, determined by the SII.
Yes, you can file a complaint with the SII if you consider the assessment excessive, with supporting evidence (independent appraisals, comparable sales).
Tax Optimization
Companies lose the 8,000 UF capital gains exemption and pay 27% corporate tax. Advantageous for large estates or complex estate planning.
Declare all deductible expenses, consider annual 3% depreciation, and keep rigorous accounting of property-related expenses.
Flat 35% tax on gross rental income, 35% on total capital gains, obligation to appoint a tax representative in Chile.
Declaration Obligations
Annual declaration in April (Operación Renta). Property taxes payable in April, June, September and November. Monthly VAT if applicable.
Fines of 10% to 30% of tax due, plus interest. In serious cases: up to 200% fine and possible criminal prosecution.
For simple rental income: income/expense record sufficient. For habitual activity: complete accounting mandatory with electronic invoicing.
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