Chile is an attractive country for foreign investment and offers a favorable legal environment for the acquisition of property, with a strong right to property, whether for residential or investment purposes.
In this detailed guide, you will find the requirements, the step-by-step process for buying real estate in Chile as a foreigner, as well as the tax benefits available when doing so as a natural person (including DFL2, which involves a tax exemption for the leases of the first two residential properties of less than 140 square meters and the exemption for capital gains on the sale of 8,000 UF, approximately 345,000 USD, among others).
We also cover the possibility of buying commercial properties or land and some final recommendations for any nationality interested in investing in the Chilean real estate market.
The first essential step is to obtain a Single Tax Role (RUT) in Chile. Any foreigner who wishes to purchase a property must register with the Internal Revenue Service (SII) and obtain this tax identification number.
It is not necessary to have a visa or residence to process the RUT; even a tourist can obtain it and buy a property, since the SII allows the online application with a valid passport and an address in Chile (which can be that of a lawyer or representative).
The SII generally requires a foreigner to appoint a representative resident in Chile to make the RUT request and represent him in tax proceedings. This representative, through a power of attorney (or advanced electronic signature), will manage the obtaining of the RUT over the internet and will be responsible for the corresponding tax obligations of the foreign investor.
In Chile, it is not required to reside or have a visa to purchase a property; however, if the property will generate income (for example, leases), the law requires a foreigner to appoint a representative resident in Chile for tax purposes. This legal representative will be responsible for reporting and paying taxes derived from rental income on behalf of the foreign landlord.
If the buyer will not reside in Chile, having a trusted representative or proxy is also important for other post-purchase procedures, such as paying contributions (land tax) and receiving official notifications. In practice, many people hire a local lawyer or manager to act as their representative and assist them with these duties.
It should be noted that the vast majority of Chilean territory is available for purchase by foreigners without restrictions. There are only limitations in certain border areas for reasons of national security.
For example, nationals of neighboring countries (Argentina, Bolivia or Peru) cannot acquire real estate located on the 10 km wide border strip without express authorization from the President of the Republic.
In addition, the legislation imposes restrictions on acquiring fiscal land on coastal (5 km from the coast) and border strips, unless special permits are obtained from the authorities. In common urban areas, these restrictions do not apply.
With the initial procedures in place, the next step is to research the Chilean real estate market and search for the right property.
Foreigners can purchase all types of real estate in Chile: from apartments and houses (urban properties) to offices, commercial premises or rural land. In the case of urban properties, there are no special restrictions, and they are in fact the most common among foreign investors.
When searching, it is recommended to analyze different cities and neighborhoods, considering factors such as security, infrastructure, capital gain and projected return (if it is investment). There are numerous real estate portals (e.g.: Real Estate Portal, TocToc, Yapo.cl) where you can explore properties for sale.
It is also useful to have a trusted local real estate agent or broker, who can advise on market prices, sectors with growth potential and practical buying and selling procedures.
Buying property is a significant transaction, so it's essential to act with caution and have adequate legal support. It is recommended to hire an attorney with experience in Chilean real estate law before signing final documents.
The lawyer will be able to help:
This due diligence process includes obtaining key legal certificates, such as: current domain certificate, mortgage and encumbrances certificate, certificate of non-expropriation and other municipal records.
A thorough review will prevent fraud or subsequent legal problems in real estate investment.
Once the ideal property has been found and the initial checks have been carried out, an offer is usually submitted to the seller. If both parties agree on price and conditions, the next step is usually to sign a Promise to Buy and Sell before a notary.
The promise to buy and sell is a preliminary contract in which the buyer and seller agree in writing to celebrate the sale in the future, establishing the price, terms and any agreed conditions.
When signing the promise, it is customary to pay a foot or reserve (for example, 10% - 20% of the value) as a sign of seriousness. This document sets the basis for the transaction and allows time to manage pending procedures (obtaining mortgage credit, studying securities, etc.), while reserving the property for the buyer.
TIP: It is important that the promise includes clear clauses about what happens if any of the parties does not comply (for example, loss of reservation or compensation), and to leave in writing all the agreed conditions (deadline for signing the writing, what furniture or equipment is included in the sale, etc.).
Always sign this contract before a notary to give it a certain date.
Once the conditions of the promise have been fulfilled, the Deed of Purchase and Sale is signed. This is the definitive document that transfers ownership of the real estate and must be signed before a notary public.
The public deed will include the full details of the parties, a description of the property, the agreed sale price and the form of payment, among other legal clauses.
At the time of signing the deed, the buyer must make the final payment to the seller as stipulated (usually done through the issuance of a voucher that remains in notarial custody).
Additionally, taxes and expenses associated with the transaction must be covered, such as:
All of these sums (price, taxes, notary fees and Conservator) must be paid or guaranteed to successfully complete the purchase.
After the writing has been signed and the payment has been made, the notary issues authorized copies of the writing to proceed with the registration with the Real Estate Conservator (CBR) of the municipality where the property is located.
Registering the domain in the CBR is the step that gives the buyer the title of owner of the property. This process usually takes between 1 and 3 weeks, depending on the workload of the local conservator, after which a valid domain certificate can be obtained in the name of the new owner.
With the registration made, legally the property already belongs to the buyer. However, some important subsequent procedures remain:
With these steps completed, the property is already in the hands of the foreign investor legally and securely.
Below, we review the most relevant tax benefits available to foreigners who invest in real estate in Chile as natural persons.
Buying real estate in Chile as a foreigner in a personal capacity allows access to important tax advantages that do not apply if the investment is made through a company.
Here are the key benefits:
These tax benefits, together with the economic stability and strength of institutions in Chile, make investing in real estate as a natural person highly convenient.
Keep in mind that if you set up a company to buy property, these franchises will not be available (companies are usually taxed on sales and leases). For this reason, many foreigners choose to buy directly in their personal capacity to take advantage of the available tax exemptions.
Buying real estate in Chile as a foreigner is an accessible and safe process as long as you follow the right steps.
With a RUT in hand, the right advice and knowledge of the available tax benefits, you can successfully invest in Chilean properties, taking full advantage of the advantages that the country offers to international investors.
Good luck with your real estate investment in Chile!
