Published on and written by Cyril Jarnias
Chile, with its diverse landscapes ranging from the Atacama Desert to the Patagonian fjords, is attracting more and more foreign investors in the real estate sector. Whether you want to acquire a second home or make a rental investment, here is a detailed guide to the property buying process in Chile for non-residents.
Welcome to Chile: A Real Estate Market Open to Foreigners
Good news for international investors: Chile allows foreigners to buy real estate without major restrictions. Whether you are a resident or not, you enjoy the same rights as Chilean citizens when it comes to property acquisition. This open policy makes Chile an attractive destination for foreign real estate investment.
However, there is one important exception to be aware of: border areas are subject to special rules. In these regions, non-Chileans must obtain prior authorization from the government to buy property. This measure aims to preserve national security in sensitive areas.
To successfully carry out your property purchase project in Chile, you will need to prepare several essential documents:
- Valid passport
- Chilean tax identification number (RUT) – to be obtained from the Internal Revenue Service (SII)
- Proof of income and assets
- Bank statements from recent months
- Birth certificate translated into Spanish and legalized
Expert tip: Hire a local lawyer specializing in real estate law to guide you through these administrative procedures. Their expertise will be invaluable in avoiding pitfalls and securing your transaction.
Real Estate Taxation: What You Need to Know to Optimize Your Investment
Real estate taxation in Chile has several aspects to consider:
- Property tax: It varies depending on the value and location of the property, with rates ranging from 1% to 1.4% per year.
- Capital gains tax: Upon resale, you will be subject to tax on the realized capital gain. The standard rate is 35%, but exemptions exist under certain conditions.
- VAT: The purchase of a new property is subject to 19% VAT.
Good to know:
Chile has signed tax treaties with many countries to avoid double taxation. Check the agreements in force with your country of residence to optimize your tax situation.
Key Steps in the Buying Process: From Search to Signing
1. Property search: Hire a local real estate agent to target the best opportunities.
2. Purchase offer: Once you find the ideal property, submit a written offer to the seller.
3. Promise of sale: If the offer is accepted, sign a promise of sale (promesa de compraventa) that sets the terms of the transaction.
4. Due diligence: Your lawyer will carry out the necessary checks on the property and the seller.
5. Financing: If needed, obtain a mortgage loan from a Chilean bank. Note that terms may be less favorable for non-residents.
6. Deed of sale: Signing the deed of sale (escritura de compraventa) before a notary finalizes the transaction.
7. Registration: The property must be registered in your name with the local Conservador de Bienes RaÃces.
Expert Tips for a Successful Real Estate Investment in Chile
– Study the local market: Prices and trends vary significantly by region. Santiago, Viña del Mar, and northern beach resorts are particularly popular with foreign investors.
– Anticipate additional costs: Budget about 3-5% of the purchase price to cover notary fees, registration costs, and legal fees.
– Think long-term: The Chilean real estate market offers promising long-term capital appreciation prospects, especially in developing tourist areas.
– Master the language: Although many professionals speak English, a basic knowledge of Spanish will greatly facilitate your procedures.
Good to know:
Some regions like Pucón in AraucanÃa or Puerto Varas in the Lake District are experiencing a real estate boom and offer excellent investment opportunities.
Conclusion: Chile, a Land of Opportunities for Real Estate Investment
With its political stability, economic growth, and breathtaking landscapes, Chile stands out as a top destination for foreign real estate investment. Although the buying process may seem complex at first, careful preparation and support from local professionals will allow you to realize your project under the best conditions.
Whether you dream of a house with a view of the Pacific Ocean, an apartment in the heart of Santiago, or a vineyard estate in the Central Valley, the Chilean real estate market offers a multitude of opportunities for all budgets and all projects.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
