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Chile's property tax system is straightforward but requires understanding specific rates and regulations that vary by property type.
Property taxes in Chile are primarily based on the Impuesto Territorial (Territorial Tax), with rates ranging from 1.0% to 1.4% depending on the property type and value. The Chilean tax system uses fiscal values rather than market prices, and properties are reassessed every four years by the national tax authority.
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Chile operates a centralized property tax system with rates from 1.0% to 1.4% based on fiscal values, not market prices.
Most residential properties benefit from exemptions up to CLP 56.8 million, while high-value properties face additional progressive surcharges.
| Property Type | Tax Rate | Exemption Threshold |
|---|---|---|
| Residential Properties | 1.2% (up to threshold), 1.4% (above) | CLP 56.8 million (2025) |
| Commercial/Industrial | 1.4% | None |
| Agricultural/Rural | 1.0% | None |
| Vacant Urban Land | 1.23% | None |
| High-Value Surcharge | 0.075%-0.425% additional | Above CLP 450 million |
| VAT on New Properties | 19% | Developer purchases only |
| Stamp Duty | 0.2%-0.8% | Mortgage contracts |
What types of property taxes exist in Chile?
Chile has three main types of property taxes that affect real estate investors and homeowners.
The primary tax is the Impuesto Territorial (Territorial Tax), also known as Contribuciones de Bienes Raíces, which applies annually to all real estate including urban, rural, and vacant properties. This tax is calculated based on the fiscal value set by the Servicio de Impuestos Internos (SII).
Additionally, buyers face a 19% VAT on new constructions purchased directly from developers. This VAT does not apply to resale properties between private parties. For financing, there's also a stamp duty ranging from 0.2% to 0.8% on mortgage or financing contracts.
These taxes are collected nationally rather than by municipalities, creating a uniform system across Chile's regions.
How are property tax rates calculated in Chile?
Chilean property taxes are calculated using the fiscal value (avalúo fiscal), not the market value or purchase price.
The Servicio de Impuestos Internos (SII) sets these fiscal values by considering factors like location, size, construction quality, amenities, and periodic market assessments. Properties with luxury features such as pools or tennis courts receive higher fiscal valuations due to these improvements.
For residential properties, the rate is 1.2% on fiscal values up to CLP 56.8 million (as of 2025), then 1.4% on amounts above this threshold. Non-residential urban properties face a flat 1.4% rate, while agricultural and rural properties are taxed at 1.0% annually.
High-value properties exceeding approximately CLP 450 million face additional progressive surcharges ranging from 0.075% to 0.425% on the excess amounts.
What is the average property tax rate across Chile?
Most properties in Chile fall within the 1.2% to 1.4% tax rate range for urban and residential uses.
The majority of residential properties benefit from the lower 1.2% rate since many fall below the CLP 56.8 million exemption threshold. Properties above this threshold pay 1.4% on the excess value. Commercial and industrial properties consistently pay 1.4%, while agricultural properties enjoy the lowest rate at 1.0%.
For high-value properties, effective rates can reach up to 1.825% when including progressive surcharges. However, the typical homeowner or investor can expect to pay between 1.0% and 1.4% of their property's fiscal value annually.
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Do property tax rates vary by region or municipality in Chile?
No, property tax rates in Chile are set nationally and do not vary by region or municipality.
Unlike many countries where local governments set their own property tax rates, Chile operates a centralized system managed by the national tax authority (SII). This ensures uniform rates across all regions, from Santiago to Valparaíso to rural areas in Patagonia.
The only variations come from property type classifications and value thresholds, not geographic location. Whether you own property in expensive Santiago neighborhoods or rural agricultural land, the same rate structure applies based on property type and fiscal value.
This centralized approach provides predictability for investors and ensures consistent revenue collection for the national government.
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Are tax rates different for residential, commercial, or rural properties?
Yes, Chile applies different tax rates based on property classification.
| Property Classification | Tax Rate | Special Conditions |
|---|---|---|
| Residential Properties | 1.2% up to CLP 56.8M, then 1.4% | Exemption below threshold |
| Commercial Properties | 1.4% | No exemptions |
| Industrial Properties | 1.4% | No exemptions |
| Agricultural/Rural Properties | 1.0% | Lowest rate category |
| Vacant Urban Land | 1.23% | Intermediate rate |
| High-Value Properties (all types) | Base rate + 0.075%-0.425% | Progressive surcharge above CLP 450M |
| Educational/Religious Properties | 0% (exempt) | Special exemption status |
Is there a minimum or maximum tax rate set by law?
Chile sets both minimum and maximum property tax rates through national legislation.
The minimum rate is 1.0% annually, which applies to agricultural and rural properties. This represents the lowest property tax burden in the Chilean system. The standard maximum rate without surcharges is 1.4% for general non-agricultural properties including residential, commercial, and industrial real estate.
However, progressive surcharges for high-value properties can push effective rates up to 1.825%. These surcharges apply to properties exceeding approximately 670 UTA (roughly CLP 450 million as of 2025) and range from 0.075% to 0.425% on the excess value.
These rate limits are established by law and adjusted periodically by the government to account for inflation and policy changes.
How often are property taxes reassessed or updated in Chile?
Chilean properties undergo formal reassessment every four years by the Servicio de Impuestos Internos (SII).
During these reassessment cycles, the SII updates fiscal values to reflect current market conditions, inflation, and neighborhood improvements. This four-year cycle provides stability while ensuring tax assessments don't become too outdated compared to actual property values.
Between formal reassessments, the SII may make periodic adjustments for inflation and significant market trends. Tax thresholds, such as the residential exemption limit of CLP 56.8 million, are adjusted semi-annually to maintain their real value against inflation.
Property owners receive official notifications when their fiscal values are updated, and they have the right to appeal assessments they believe are incorrect.
Are there exemptions or reductions for certain groups in Chile?
Chile provides several property tax exemptions and reductions targeting specific groups and property types.
The most significant exemption applies to primary residences with fiscal values below CLP 56.8 million (as of 2025). This threshold is adjusted semi-annually for inflation, benefiting middle-class homeowners who pay no property tax on their primary residence.
Senior citizens receive substantial benefits based on income criteria. Those with income below 13.5 UTA receive complete exemption, while others may qualify for 50% reductions. Educational, religious, and certain public properties also receive special exemptions.
Properties developed under DFL-2 housing programs may receive limited relief, though this varies by specific program requirements. However, Chile does not offer specific national tax exemptions for first-time buyers beyond the general primary residence exemption.
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How is property value determined for tax purposes in Chile?
Property values for tax purposes in Chile are determined by the fiscal value (avalúo fiscal) set by the Servicio de Impuestos Internos (SII), not by purchase price or current market value.
The SII considers multiple factors when establishing fiscal values: property location, lot size, construction area, building quality, age of the structure, and available amenities. Properties with luxury features like swimming pools, tennis courts, or high-end finishes receive higher fiscal valuations due to these assessed improvements.
This system means your property tax is based on the government's assessment of your property's value, which may differ significantly from what you paid or what the property could sell for today. Fiscal values are typically more conservative than market values, especially in rapidly appreciating areas.
Property owners can challenge fiscal values through formal appeals if they believe the assessment is incorrect or unfair compared to similar properties in their area.
What is the payment schedule for property taxes in Chile?
Chilean property taxes are paid in quarterly installments throughout the year.
The four quarterly payments are typically due in April, June, September, and November, though exact dates may vary slightly each year. Property owners can check their specific payment schedule online using their property's tax identification number on the SII website.
Payments are made directly to the Servicio de Impuestos Internos (SII) rather than to local municipalities. The tax authority provides multiple payment options including online payments, bank transfers, and in-person payments at authorized locations.
Each quarterly payment covers 25% of the annual tax liability, making it easier for property owners to manage cash flow compared to a single annual payment.
Are there penalties for late or missed property tax payments?
Yes, Chile imposes penalties for late or missed property tax payments, with new rules introduced for 2025.
As of 2025, Chile implemented a daily interest rate system for delinquent tax payments. This rate is calculated using market rates plus a 3.5% increase, adjusted for inflation. The daily compounding means penalties can accumulate quickly for extended delays.
Additional fixed penalties may also apply beyond the daily interest charges. Previously, penalty rates typically ranged around 10%, but the new market-adjusted system can result in higher effective penalty rates depending on current financial conditions.
Property owners should prioritize timely payments since penalty interest compounds daily, making delayed payments increasingly expensive. The SII offers payment plans for taxpayers facing financial difficulties, which can help avoid or reduce penalties.
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How does Chile's property tax system compare with other Latin American countries?
Chile's property tax system is significantly more centralized and uniform compared to other Latin American countries.
Unlike Mexico or Argentina where municipalities set local property tax rates, Chile operates a national system ensuring consistent rates across all regions. This centralization provides greater predictability for investors but less local autonomy in tax policy.
Chile achieves higher property tax collection rates than most regional peers, with property taxes contributing 4-5% of Chile's overall tax burden versus 1-3% in many other Latin American countries. This efficiency stems from better administrative systems and regular reassessments.
Most other Latin American countries have lower property tax rates and less frequent reassessments, often leading to outdated valuations and lower effective tax collection. Chile's four-year reassessment cycle is more frequent than the decades-long gaps seen in some neighboring countries, ensuring fiscal values remain closer to market realities.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Chile's property tax system offers predictability through its centralized structure and regular reassessments every four years.
The combination of reasonable rates (1.0%-1.4%) and generous exemptions for primary residences makes Chilean real estate attractive for both investors and homeowners.
Sources
- Chile Property Taxes - The LatinVestor
- Chile Pay Tax - The LatinVestor
- KPMG Chile Tax Profile
- Property Tax Assessment in Chile
- Valparaíso Pay Tax - The LatinVestor
- Deloitte Chile Tax Highlights
- PWC Chile Tax Summaries
- Global Property Guide Chile
- Santiago Property Taxes - The LatinVestor
- Lincoln Institute Property Tax Latin America