Tax Benefits for Real Estate Investors in Chile

Published on April 26, 2026 and written by Cyril Jarnias

Chile, a South American country renowned for its economic and political stability, offers numerous tax advantages to foreign real estate investors. This article explores in detail the tax opportunities that make Chile a top destination for international real estate investment.

A Favorable Local Tax Regime for Investors

The Chilean tax system is designed to attract foreign investment, particularly in the real estate sector. Here are the main tax benefits available to investors:

Attractive Corporate Tax Rate Chile applies a corporate tax rate of 27%, which is relatively low compared to many developed countries. For companies that reinvest their profits, this rate can even drop to 25%.

VAT Exemption on Rental Income Rental income from residential real estate is exempt from VAT in Chile. This measure significantly boosts the profitability of rental investments.

Generous Tax Deductions Investors can deduct expenses related to maintenance, repairs, and improvements of real estate properties from their taxable income. Additionally, property depreciation can be deducted over a period of 20 to 40 years, depending on the type of property.

Favorable Capital Gains Taxation Capital gains realized from the sale of a property are taxed at a flat rate of 20%, which is lower than the income tax rate for many investors.

Favorable International Taxation: Double Taxation Agreements

Chile has signed numerous double taxation agreements with countries around the world, further enhancing its appeal to international investors.

A Vast Network of Tax Treaties Chile has concluded double taxation agreements with over 30 countries, including France, Spain, the United Kingdom, Canada, and Australia. These agreements prevent real estate income from being taxed both in Chile and in the investor’s country of residence.

Reduced Withholding Taxes Thanks to these agreements, withholding tax rates on dividends, interest, and royalties are often reduced, increasing the net return on investments.

Facilitated Exchange of Tax Information These agreements also provide mechanisms for exchanging information between tax authorities, simplifying administrative procedures for investors and reducing the risk of tax disputes.

Protection Against Changes in Tax Legislation Double taxation agreements offer a degree of tax stability, protecting investors from potential unfavorable changes in Chilean tax law.

Property and Housing Taxes Among the Lowest in Latin America

Chile stands out for its particularly advantageous property and housing taxes for property owners.

Moderate Property Tax The property tax in Chile, known as “Contribución de Bienes Raíces,” is calculated based on the property’s tax value, which is generally lower than its market value. The rate ranges from 1% to 1.4% of this tax value, which is relatively low compared to other countries in the region.

Exemptions for Residential Properties Residential properties with a tax value below approximately USD 80,000 are exempt from property tax. This measure benefits many owners of mid-sized real estate properties.

No Housing Tax Unlike many countries, Chile does not impose a housing tax on property occupants. This absence of an additional tax makes rental investment particularly attractive.

Infrequent Tax Reassessment The tax values of real estate properties are reassessed every 5 years, providing some stability in property tax calculations and preventing sudden increases.

Chile: A Tax Haven Compared to Its South American Neighbors

Compared to other South American countries, Chile positions itself as one of the most tax-attractive destinations for real estate investment.

Argentina: Heavier Taxation In Argentina, real estate investors face higher tax rates, with a corporate tax rate of 35% and property taxes that can reach 1.5% of the property’s market value. Additionally, the country imposes a personal property tax that can apply to real estate holdings.

Brazil: Increased Tax Complexity The Brazilian tax system is known for its complexity. Real estate investors must navigate different levels of taxation (federal, state, and municipal), which can make tax management more difficult and costly than in Chile.

Colombia: Higher Tax Rates Colombia applies a corporate tax rate of 31%, higher than Chile’s. Additionally, non-residents are subject to a 20% withholding tax on rental income, compared to just 15% in Chile under certain double taxation agreements.

Peru: Less Developed Tax Benefits Although Peru offers some tax advantages, its system is less favorable than Chile’s. Tax rates are generally higher, and tax deductions for real estate investors are less generous.

Conclusion: Chile, a Land of Tax Opportunities for Real Estate Investment

Chile offers a particularly attractive tax environment for foreign real estate investors. With its competitive tax rates, numerous double taxation agreements, moderate property taxes, and relatively simple tax system, the country positions itself as a top destination for real estate investment in South America.

The tax advantages, combined with the country’s economic and political stability, make Chile a promising real estate market for investors looking to diversify their portfolio internationally. However, as with any foreign investment, it is crucial to thoroughly research local specifics and consult professionals to optimize your tax strategy.