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Understanding property taxes in Chile is crucial before investing in Chilean real estate. Property owners face multiple tax obligations including annual property tax (impuesto territorial), VAT on new purchases, and income tax on rental income. The total tax burden varies significantly based on property value, location, and how you use the property.
If you want to go deeper, you can check our pack of documents related to the real estate market in Chile, based on reliable facts and data, not opinions or rumors.
Property tax in Chile is calculated at 1.4% annually on the fiscal value for residential properties, with additional surcharges applying to high-value properties above CLP 541 million.
New property purchases are subject to 19% VAT, while transaction costs including notary and registration fees typically total 1-1.5% of the purchase price.
| Tax Type | Rate/Amount | Basis |
|---|---|---|
| Annual Property Tax (Standard) | 1.4% | Fiscal value (SII assessment) |
| Property Tax Surcharge (CLP 541M-948M) | 0.075% | Additional on high-value properties |
| Property Tax Surcharge (CLP 948M-1,290M) | 0.15% | Additional on high-value properties |
| Property Tax Surcharge (Above CLP 1,290M) | 0.425% | Additional on high-value properties |
| VAT on New Properties | 19% | Purchase price |
| Transaction Costs | 1-1.5% | Purchase price |
| Rental Income Tax (Non-residents) | 20% | Net rental income |
| Rental Income Tax (Residents) | 0-40% | Progressive income tax rates |
What's the purchase price range for properties you're considering in Chile?
Property prices in Chile vary dramatically depending on location and property type.
In Santiago's premium neighborhoods like Las Condes and Vitacura, apartments typically cost between CLP 4,000-8,000 per square meter (roughly $120,000-240,000 USD for a 100 sqm unit). Houses in these areas can reach CLP 500-800 million ($500,000-800,000 USD).
Viña del Mar and Valparaíso coastal properties range from CLP 2,500-5,000 per square meter for apartments, while beachfront houses can cost CLP 300-600 million. In emerging markets like La Serena or Puerto Varas, you'll find apartments from CLP 1,500-3,000 per square meter.
The key factor for tax calculation is the fiscal value (valor fiscal) set by Chile's Internal Revenue Service (SII), which typically ranges from 50-80% of market value. For a CLP 400 million market-value property, expect a fiscal value around CLP 200-320 million.
It's something we develop in our Chile property pack.
What is the annual property tax rate in your specific Chilean municipality?
Chile applies a standard property tax rate of 1.4% annually on the fiscal value for all residential and urban properties.
This rate is uniform across all municipalities in Chile - whether you buy in Santiago, Valparaíso, Concepción, or smaller towns. Agricultural land receives a lower rate of 1.0%.
However, high-value properties face additional surcharges on top of the base 1.4% rate. Properties with fiscal values exceeding CLP 541 million pay progressive surcharges ranging from 0.075% to 0.425%.
Municipal governments cannot independently set different property tax rates, as this is controlled at the national level by Chilean tax law. The revenue is split between the local municipality (typically 60-65%) and the national Municipal Common Fund.
How is property tax calculated and what fiscal value applies to your property?
Chilean property tax is calculated exclusively on the fiscal value (valor fiscal) determined by the SII, not on market value or purchase price.
The SII conducts periodic reassessments every 3-5 years, updating fiscal values based on location, property characteristics, and market conditions. For example, a property purchased for CLP 500 million might have a fiscal value of CLP 300 million.
The calculation is straightforward: Fiscal Value × 1.4% = Annual Property Tax. A property with a fiscal value of CLP 200 million pays CLP 2.8 million annually (CLP 200M × 1.4% = CLP 2.8M).
You can check your property's current fiscal value on the SII website using the property's rol number (tax identification number). This fiscal value serves as the basis for all property tax calculations and determines which tax brackets apply.
Which progressive tax brackets apply to your Chilean property?
| Fiscal Value Range (CLP) | Additional Tax Rate | Cumulative Rate |
|---|---|---|
| Up to CLP 541 million | 0% | 1.4% |
| CLP 541M - 948M | 0.075% | 1.475% |
| CLP 948M - 1,290M | 0.15% | 1.55% |
| Above CLP 1,290M | 0.425% | 1.825% |
| Luxury properties (above CLP 2B) | Additional luxury tax | Variable |
What municipal surcharges and local taxes should you expect annually?
Most Chilean municipalities do not impose significant additional surcharges beyond the standard property tax.
Municipal service fees typically range from CLP 30,000 to CLP 100,000 annually, covering waste collection, street lighting, and basic municipal services. In Santiago's premium communes like Las Condes, these fees can reach CLP 150,000 annually.
Some municipalities charge small administrative fees (derechos municipales) for permits or certificates, but these are usually under CLP 50,000 per year. Coastal municipalities like Viña del Mar sometimes add beach access or tourism-related fees of CLP 20,000-60,000 annually.
The majority of your property-related taxes flow to the municipality through the standard property tax revenue sharing, so additional local taxes remain minimal compared to the base property tax amount.
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How long do new properties qualify for tax exemptions?
Newly constructed residential properties in Chile receive a complete property tax exemption for the first 2 years after construction completion.
This exemption applies from the date the property receives its final habitability certificate (certificado de recepción final) from the municipality. During these 2 years, you pay zero property tax regardless of the property's fiscal value.
After the 2-year period expires, the full property tax rate of 1.4% (plus any applicable surcharges) takes effect immediately. There is no gradual phase-in period - you transition from zero tax to full tax liability.
The exemption only applies to newly built properties, not to renovated or significantly modified existing properties. If you purchase a 1-year-old new construction property, you would still benefit from the remaining 1 year of tax exemption.
What are the annual waste collection and municipal service fees?
Municipal service fees in Chile are typically billed quarterly alongside your property tax installments.
In Santiago's premium communes (Las Condes, Providencia, Vitacura), annual fees range from CLP 80,000 to CLP 150,000. Mid-tier communes like Ñuñoa or San Miguel charge CLP 50,000 to CLP 80,000 annually.
Coastal cities like Valparaíso and Viña del Mar charge CLP 60,000 to CLP 120,000, often including beach maintenance and tourist area upkeep. Smaller municipalities typically charge CLP 30,000 to CLP 60,000 annually.
These fees cover waste collection, street cleaning, public lighting, green area maintenance, and basic municipal services. The billing appears as a separate line item on your quarterly property tax statement from the municipality.
How often do you pay property tax and what are the installment amounts?
Chilean property tax is paid in four quarterly installments throughout the year.
Payment dates are typically April, June, September, and November, though exact dates may vary slightly by municipality. Each installment equals 25% of your annual property tax liability.
For example, if your annual property tax is CLP 3.2 million, each quarterly payment would be CLP 800,000. Late payments incur penalties and interest charges, typically 1.5% per month on the outstanding amount.
You can pay at authorized banks, online through the SII website, or at municipal offices. Many property owners set up automatic bank transfers to ensure timely payments and avoid penalties.
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What tax deductions and exemptions could reduce your annual burden?
Several exemptions and deductions can significantly reduce your Chilean property tax liability.
Low-value properties with fiscal values below approximately CLP 50 million (roughly $50,000 USD equivalent) may qualify for complete or partial exemptions. This threshold is updated annually by the SII.
Primary residence exemptions apply to certain income levels - families earning below specific thresholds may receive 25-50% reductions on their main residence. Seniors over 65 often qualify for additional discounts of 25% on property tax for their primary residence.
Properties qualifying for social housing programs (DFL2 or DS1) receive substantial tax benefits. If you rent out qualifying affordable housing units, you may receive tax credits reducing your overall tax burden by CLP 500,000 to CLP 1.5 million annually.
Disabled property owners may qualify for additional exemptions ranging from 25% to complete exemption depending on the degree of disability and property value.
What VAT applies when buying new Chilean properties?
New property purchases in Chile are subject to 19% VAT (IVA) on the full purchase price.
This VAT applies to all newly constructed properties sold for the first time by developers or construction companies. For a CLP 400 million new apartment, you would pay CLP 76 million in VAT (CLP 400M × 19% = CLP 76M).
Used properties sold between individuals are exempt from VAT - you only pay transfer taxes and notarial fees. However, if a company or developer sells even a previously owned property, VAT may apply depending on their tax status.
Some buyers can recover VAT through specific programs if the property qualifies for social housing benefits (DFL2), potentially reducing the effective VAT rate to 0% for qualifying buyers and properties under certain price thresholds.
What are the total notary, registration, and stamp duty costs?
| Cost Category | Rate | Example (CLP 400M property) |
|---|---|---|
| Stamp Duty (Impuesto al Timbre) | 0.066% monthly (max 0.8%) | CLP 3.2M |
| Notary Fees (Escritura) | 0.2-0.4% | CLP 800K-1.6M |
| Property Registry Fees | 0.1-0.2% | CLP 400K-800K |
| Legal Documentation | 0.1-0.3% | CLP 400K-1.2M |
| Certificate Fees | Fixed amount | CLP 100K-300K |
| Total Transaction Costs | 1.0-1.5% | CLP 4M-6M |
How does rental income taxation affect your total annual tax burden?
Rental income taxation in Chile depends heavily on your tax residency status and income level.
Non-resident property owners pay a flat 20% tax rate on net rental income after deducting allowable expenses like property management, maintenance, and depreciation. For monthly rent of CLP 1.5 million, annual tax would be approximately CLP 3.6 million.
Chilean tax residents face progressive income tax rates from 0% to 40% on rental income, combined with their other income sources. Most residential rental income falls into the 20-35% brackets for middle and upper-income owners.
Properties qualifying for DFL2 social housing status receive preferential treatment with reduced tax rates, but this applies only to specific property types and rental amounts below market rate. You can typically deduct 10-20% of gross rental income for standard maintenance and management expenses.
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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.
Understanding the complete tax structure is essential for making informed property investment decisions in Chile.
As of September 2025, these tax rates and regulations provide the framework for calculating your total annual property ownership costs in Chile.