Buying real estate in Chile as a foreigner?

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Buying property in Chile as a foreigner: a full guide

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Everything you need to know is included in our Chile Property Pack

Chile is a popular destination for foreigners who want to invest in real estate.

It has stunning landscapes, a vibrant cultural history, and welcoming people. But purchasing property in a foreign country can be complicated, particularly when it comes to the laws and regulations.

This guide is here to assist foreign buyers in understanding how the property market works in Chile. It covers all the necessary information in an easy-to-follow way.

Also, for a more in-depth analysis, you can check our property pack for Chile.

Can you purchase and own a property in Chile as a foreigner?

If you are American, we have a dedicated blog post regarding the property buying and owning process in Chile for US citizens.

Buying real estate in Chile as a foreigner is quite feasible, and there are several aspects to consider which I'll explain in a clear and interconnected way.

Firstly, foreigners can indeed own land in Chile. There's no distinction in property rights between Chileans and foreigners, which means as a foreign buyer, you have the same property rights as a local.

This is an important point because it ensures that your investment is protected under the same laws that protect Chilean citizens.

Now, regarding the difference in treatment based on your nationality, Chile does not generally discriminate against foreigners based on their country of origin when it comes to real estate purchases.

However, it's always wise to check for any specific bilateral agreements or restrictions that might apply to citizens from your specific country, just to be on the safe side.

Residency is not a prerequisite for buying property in Chile. You can purchase real estate even if you don’t reside in the country. This flexibility is great for investors or those looking to buy vacation homes.

However, if you plan to stay in Chile for an extended period, or if your real estate purchase is connected to a business investment, you might need to consider the appropriate visa or residency status.

Regarding visas and permits, you don't need a specific visa just to buy property. But, if you're planning to live in Chile or conduct business, the type of visa you'll need depends on your particular circumstances.

There are various visas, such as the retirement and periodic income visa, the investor visa, and others. Each has its own requirements and benefits.

In terms of governmental authorization, generally, there's no need for special permission from Chilean authorities for foreigners to buy property.

However, there are some exceptions, especially if the property is near national borders or in certain protected areas. In such cases, you may need to seek special permission from the Chilean Ministry of National Defense.

As for minimum investment, there's no set minimum amount required to invest in real estate as a foreigner in Chile. The market is quite open, and you can invest as much or as little as you wish, depending on your budget and goals.

Can you become a resident in Chile by owning a property?

Chile does not offer a direct residency-by-investment program specifically tied to real estate purchases.

This means that simply buying property in Chile won't automatically grant you residency. There are pathways to residency that can be related to your investment in Chile, including real estate, but they are not as straightforward as a direct 'buy property, get residency' scheme.

For those interested in gaining residency in Chile, there are several visa options, and one of these is the Investor Visa. The Investor Visa is designed for individuals who plan to invest in Chile, which can include real estate investments.

However, it's important to note that this visa is not solely based on the amount of money invested in property. The Chilean government evaluates each application based on the overall contribution to the Chilean economy, which includes job creation and other economic impacts beyond the investment amount.

The process typically involves presenting a business or investment plan to the Chilean authorities, demonstrating how your investment will benefit the country. This plan is one of the key requirements and should be detailed and well-structured.

The minimum investment amount isn’t fixed and can vary depending on the nature and potential impact of your project.

Once you obtain an Investor Visa, you initially get temporary residency. This residency is typically valid for one year and can be renewed. After a certain period, usually a few years of continuous residence in Chile, you can apply for permanent residency.

The duration and specific conditions can vary, so it's essential to stay updated on the latest requirements and regulations.

Permanent residency is a significant step as it offers more stability and rights, and after holding permanent residency for a specified period, you can apply for Chilean citizenship.

Obtaining citizenship would grant you the right to live, work, and study in Chile indefinitely, and it comes with additional benefits like the ability to travel to certain countries without a visa.

It's worth noting that a relatively small number of people use the Investor Visa compared to other types of visas, mainly because it requires a significant commitment both financially and in terms of contributing to the Chilean economy.

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Market data

You can find fresh and updated data in our pack of documents related to the real estate market in Chile.

If we check the the GDP per capita indicator, it seems that Chilean people have become 3.2% richer over the last 5 years.

As people's wealth increases, their interest in real estate also grows, and that can make prices increase down the road.

If we check the data displayed on Numbeo, we see that residential real estate in Chile offer gross rental yields between 2.9% and 5.6%.

These values for rental yields can be considered as "moderate", which means they fall within a reasonable range and are neither exceptionally high nor exceptionally low.

To know more, you can also read our dedicated article: is it a good time to buy a property in Chile?

The life as an expat

Life as an expat in Chile can be both rewarding and challenging.

On the one hand, Chile is a beautiful country with a diverse landscape, friendly people, and a vibrant culture that is sure to captivate anyone who visits. On the other hand, living in a foreign country can be daunting, especially if you don’t speak the language. Fortunately, most Chileans are quite welcoming to foreigners, and many are eager to help you adjust to life in their country.

Chile is a great place to live if you’re looking for a low cost of living. The country has a well-developed infrastructure and a stable economy, making it a great place to invest in real estate and other assets. The cost of living in Chile is generally much lower than in other parts of the world, and expats can often find great deals on apartments, groceries, and other necessities. Additionally, Chile is known for its excellent healthcare system, so expats can rest assured that they will receive quality care when needed.

The Chilean culture is quite unique, and expats can expect to experience a wide variety of cultural activities and events. From traditional music and dance performances to modern art galleries and festivals, there’s something for everyone in Chile. Additionally, Chile is home to some of the world’s most stunning natural wonders, from the Atacama Desert to the Patagonian glaciers. With its many attractions and activities, Chile is a great place to explore and experience life as an expat.

What are the best places to buy real estate in Chile?

This table summarizes some of the best places to buy a property in Chile.

City / Region Population Average Price per sqm (CLP) Strengths
Santiago ≈ 5.6 million 1,500,000 - 4,500,000 Capital city, economic center, cultural attractions, modern infrastructure
Valparaíso ≈ 300,000 1,200,000 - 3,500,000 Historic port city, UNESCO World Heritage Site, bohemian culture
Viña del Mar ≈ 330,000 1,800,000 - 4,000,000 Resort town, beautiful beaches, entertainment options, lively festivals
Concepción ≈ 900,000 1,200,000 - 3,000,000 University city, industrial center, vibrant cultural scene, nearby natural beauty
Puerto Varas ≈ 35,000 1,800,000 - 4,000,000 Scenic town, lake and volcano views, outdoor activities, German heritage
La Serena ≈ 200,000 1,200,000 - 3,500,000 Coastal city, mild climate, sandy beaches, nearby Elqui Valley
Pucón ≈ 30,000 2,000,000 - 4,500,000 Adventure tourism, Villarrica Volcano, Lake Villarrica, natural hot springs

Do you need a lawyer when buying a property in Chile?

When purchasing a property in Chile, engaging a local lawyer can provide valuable assistance in navigating the legal aspects and ensuring a successful transaction.

One key document they can help you with is the Purchase Agreement (Contrato de Compraventa), which is a legally binding contract between the buyer and seller, outlining the terms and conditions of the sale.

The Chilean lawyer can also assist with conducting a Title Search (Estudio de Títulos) to verify the property's ownership status and identify any potential legal issues or encumbrances.

Furthermore, they can guide you through the process of obtaining necessary permits and approvals, such as approval from the local municipality.

They will ensure that all applicable taxes and fees, such as the Property Transfer Tax (Impuesto de Timbres y Estampillas) and Notary Fees (Honorarios Notariales), are paid correctly and in compliance with Chilean laws and regulations.

What are the risks when buying a property in Chile?

We've got an article dedicated to the risks associated with purchasing property in Chile.

The main risk when buying a property in Chile is the possibility of buying a property with a lien or mortgage.

This is because in Chile, a property can be sold with a lien or mortgage in place without the buyer being aware of it. This means that the buyer may be responsible for the payment of the lien or mortgage when they purchase the property.

Another risk is the possibility of buying a property with a structural defect. In Chile, it is not legally required that a property seller disclose any structural defects to the buyer, so the buyer may not be aware of any potential problems until after they have purchased the property.

Finally, there is a risk of buying a property with an unclear title. In Chile, it is not uncommon for property titles to be unclear or for there to be discrepancies between the title and the actual property. As a result, buyers should always be sure to check the title of a property before making a purchase.

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Everything you need to know is included in our Chile Property Pack

What is the list of documents needed for a real estate transaction in Chile?

When buying a property in Chile, you will need the following documents:

1. An authenticated copy of the deed of the property.

2. An authenticated copy of the title deed of the property.

3. An authenticated copy of the owner’s identity card.

4. An authenticated copy of the owner’s passport.

5. An authenticated copy of the property tax assessment.

6. An authenticated copy of the title deed of the neighbor’s property.

7. An authenticated copy of the certified survey of the property.

8. An authenticated copy of the local municipality’s zoning plan.

9. An authenticated copy of the local municipality’s building permit.

10. An authenticated copy of the local municipality’s environmental certificate.

We review each of these documents and tell you how to use them in our property pack for Chile.

How should you approach negotiations with people from Chile?

When negotiating with a local in Chile, it is important to be aware of the cultural nuances of the country.

It is best to be patient and polite, and to use language that is respectful. Chileans tend to be wary of people who are too aggressive or pushy, so it is important to take the time to build trust and rapport with the seller.

It is also important to be flexible and accommodating in the negotiations. Chilean culture values fairness and negotiation is seen as a process of finding the best solution for both parties.

Finally, keep in mind that Chileans do not expect to get the best deal right away. They typically prefer to take time to reach an agreement, and they appreciate being given the opportunity to work towards a mutually beneficial outcome.

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Can foreigners obtain a bank loan in Chile?

Yes, foreigners can obtain property loans in Chile. The Chilean banking system allows non-residents to apply for property loans, subject to certain conditions and requirements.

To obtain a property loan in Chile as a foreigner, you typically need a valid residence permit, a stable income, a good credit history, and may be required to make a down payment of a certain percentage of the property's value.

Some banks in Chile that can grant mortgages to foreigners include Banco Santander Chile, Banco de Chile, and Scotiabank Chile.

Moreover, in Chile, mortgage rates for a 20-year term range between 3% and 7%, providing borrowers with highly competitive conditions for securing financing.

What are the taxes related to a property transaction in Chile?

Here is a breakdown of taxes related to a property transaction in Chile.

Tax Description Calculation Who pays
Rental Income Tax Tax on rental income generated from the property 27% of the rental value after deducting income-generating expenses Owner
Property Tax Annual tax on the property's value 1.2% of the property value for urban properties and 1% for rural properties Owner
Capital Gains Tax Tax on the profit made from the sale of a property 27% on the net capital gain if held for less than four years Seller
Value Added Tax (VAT) Tax on the sale of new properties 19% of the property value Seller or Developer

What fees are involved in a property transaction in Chile?

Below is a simple breakdown of fees for a property transaction in Chile.

Fee Description Calculation Who pays
Registration Fee Fee for registering the property transfer with the Real Estate Registry 0.2% to 0.3% of the property value Buyer
Notary Fees Fee for the notary's services in handling the property transfer Around 0.1% of the property value, with a maximum charge of CLP128,000 Buyer
Real Estate Agent Commission Fee paid to a real estate agent for facilitating the property transaction Around 2% to 3% of the property value, depending on the location of the property Seller

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Buying real estate in Chile can be risky

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