Inheriting a Chilean property from the United States: the court, the tax and the registration

Short answer: where the person who died was living decides everything else. If their last domicile was in Chile and there was no will, the estate is processed at the Civil Registry, which is the quick route. If their last domicile was in the United States, or if there is a will, the estate goes to a Chilean court and needs a lawyer. In both cases the property stays frozen until a specific registration is made at the Registrar of Real Property, and in both cases the heirs can act from abroad with a power of attorney and apostilled documents.

The question that sorts every case

Chilean law opens a succession at the last domicile of the deceased. That single fact decides which body handles the estate, which procedure applies, whether a lawyer is required, and how long it takes.

Law 19.903 provides that estates arising from intestate successions opened in Chile are processed before the Civil Registry, and that all others are heard by the competent court under the Code of Civil Procedure. The same law adds that if the Registry receives an application that belongs to the courts, it returns it so that it can be filed before the judge.

So there are two doors, and they are not interchangeable. A family that files at the Registry when the case belonged in court loses the filing fee and several weeks, and usually discovers the problem only when the application comes back.

If the person who died was living in Chile and the heirs are the ones abroad, the route is the shorter one and we set it out step by step in the estate procedure step by step, with the version written for Chileans living overseas in the house still in your parents' names. This guide deals with the other case, the one where the deceased was living outside Chile.

Which Chilean court, when the estate was opened abroad

This is the question that stalls families for months, and the answer is written down in two places that say the same thing.

The Courts Organisation Code provides that where a succession is opened abroad and includes assets situated within Chilean territory, the estate must be applied for in the place where the deceased had their last domicile in Chile, or in the domicile of the applicant if the deceased never had one. The Inheritance Tax Act repeats the rule for tax purposes, and adds something important: where the succession is opened abroad, the estate must be applied for in Chile in respect of the assets situated in Chilean territory, notwithstanding the general rule of the Civil Code.

In plain terms. A Chilean father who emigrated to Florida in the nineteen eighties and died there, leaving a house in Chile, opens his succession in the United States, but the Chilean house still has to be processed in Chile, before the civil court of the commune where he last lived here. If he never had a domicile in Chile, then before the court of the domicile of whoever applies.

Why the property stays frozen until one specific registration

Obtaining the estate order is not the finish line. It is the first of three registrations, and families routinely stop after it because the paper looks conclusive.

Article 688 of the Civil Code says that the possession the law confers on the heir at the moment the inheritance is deferred does not enable the heir to dispose of a property in any manner until three things have happened. First, the registration of the judicial decree or the administrative resolution granting the estate. Second, the special registration of inheritance, which is the one that puts each property in the names of all the heirs at the Registrar of the place where the property is situated, and which is what enables the heirs to dispose of it acting together. Third, the registration of the allocation made in a partition, without which no single heir can dispose alone.

The test of whether it is finished is one document. Request a current title certificate for the property. If the name that appears is still the deceased's, the special registration of inheritance has not been made and nothing can be sold, let formally or mortgaged. If the names of the heirs appear, that stage is done. How to request that certificate from abroad is in the guide on checking your Chilean property from abroad.

Two further rules make the blockage real rather than theoretical. Notaries may not authorise deeds of allocation or disposal of inherited assets without the inheritance tax receipt inserted, and registrars may not register them. And the Tax Code forbids registrars from registering any transfer of ownership without proof that the taxes affecting the property have been paid.

The inheritance tax, and the two year clock

Each heir declares and pays the tax on their own share, although any one of them may pay the whole thing and then claim from the others. The tax must be declared and paid within two years counted from the date the inheritance is deferred, which as a rule is the date of death.

The rate is a progressive scale applied to the net value of each share, expressed in annual tax units. Spouses, civil partners, ascendants and descendants are exempt on the part of their share that does not exceed fifty annual tax units, and the scale then applies from its first bracket to the excess. Collateral relatives of the second, third and fourth degree have a much smaller exempt amount and a surcharge on the scale, and where the relationship is more distant or there is none at all the surcharge is larger still.

For the property itself the valuation rule is favourable and worth knowing: real property is valued at the assessed value it carried for property tax purposes at the date the inheritance was deferred. The exception is property acquired within the three years before that date, which is valued at its acquisition price when that is higher. The assessed value is normally well below market value, which is why the tax on a family home is often smaller than families fear. What that assessed value is today is something you can look up, and the annual tax charged on it is the subject of contribuciones in Chile.

Missing the two year deadline does not forfeit the inheritance. What it triggers is interest, charged after the second year at the penalty rate set in the Tax Code, on an amount that is itself restated for inflation. The law also allows the payment to be deferred in annual instalments over three years, applied for within the same two year window, and whoever takes that option cannot later ask for the interest to be waived.

Assets outside Chile, and tax paid outside Chile

A point that matters to a family split between two countries. The Inheritance Tax Act requires assets situated abroad to be included in the inventory for the purpose of determining the tax. There is an exception for the estates of foreign nationals: in those, assets abroad are included only where they were acquired with funds coming from Chile.

And tax paid abroad on the assets included in the inventory is credited against the total tax owed in Chile. That credit has a floor: the tax due in Chile cannot end up lower than it would have been had only the Chilean assets been included. Whether the United States side of the same estate produces anything to credit is a question for an adviser there.

Apostille: what needs one and what does not

Chile joined the Hague Apostille Convention and it has been in force here since the thirtieth of August 2016. The Code of Civil Procedure now provides that public instruments issued in a state party need not go through legalisation where an apostille has been issued by the authority designated by the state they come from.

For a United States estate, the documents that typically need an apostille are the death certificate, birth and marriage certificates where the events are not registered in Chile, notarial powers of attorney, and any affidavits or court certifications. In the United States the competent authority is generally the office of the Secretary of State of the issuing state, with the federal Department of State handling documents issued by federal agencies, consular reports of birth, death and marriage, and the clerks of the federal courts handling their own.

What does not get an apostille is anything signed before a Chilean consul. The Convention excludes documents issued by diplomatic or consular agents, and Chilean procedural law repeats the exclusion. Those follow the other route, described next.

The two ways to sign from the United States

You will need a power of attorney, because an estate cannot be processed by correspondence and because the sale or allocation that follows has to be signed before a Chilean notary. There are two routes and they are not equivalent.

The first is a public deed granted before a Chilean consul. Chilean consular officers are public officers for the notarial acts granted before them, by Chileans or foreigners, to take effect in Chile. What this route requires afterwards is that the signature of the consul be legalised at the Legalisations Department of the Ministry of Foreign Affairs in Santiago, which is free of charge. The consulates themselves warn that without that step the document has no effect.

The second is a power granted before a United States notary and apostilled. Chilean law was amended so that public documents authenticated by apostille do not require protocolisation to have the value of public instruments, and the apostille itself requires no further certification. The catch is what the notary actually did. If the notary only acknowledged a signature on a private document, the apostille certifies the acknowledgement and does not turn the document into a public instrument, which can fall short where Chilean law demands a public deed. That is why, for anything that will end in the disposal of a property, the consular route is usually the safer one.

Each heir needs a Chilean tax number

The estate application form requires every heir to be identified by name, national identity number, domicile and the capacity in which they inherit. The inheritance tax return is structured around the tax number of each beneficiary. And the Tax Code requires registration of everyone who causes or may cause taxes.

For an heir who was born abroad and has never had a Chilean identity number, this is the step to start early, because it conditions the two that follow it. It is obtained through a representative in Chile, and the route is set out in getting a Chilean RUT without travelling.

What happens after the registration

Once the special registration of inheritance is made, the property belongs to all the heirs in common. They can dispose of it together, and only together. One heir who refuses to sign blocks a sale, which is the most common source of family deadlock we see.

An empty house with owners on another continent is also the profile most exposed to occupation, and recovering it from abroad is its own procedure, described in a house occupied while you live abroad.

The way out is the partition, which ends with the property either divided or sold and the proceeds distributed, and which any co owner may demand. Short of that, what the heirs hold is an undivided share, with all the consequences we describe in shares and rights. If the plan is to sell the property afterwards, everything in selling Chilean property as a non resident then applies, including the withholding.

And if the title turns out to have never been properly registered in the first place, which happens more often than people expect with older rural property, the estate cannot fix that by itself. That is a separate procedure, and it is what our title regularisation service handles. A first reading of whether a property needs it can be had from the regularisation test.

How we handle it

We start by establishing the last domicile of the deceased and whether there is a will, because that decides the route and everything downstream of it. Then we list the documents that need an apostille in the United States, prepare the wording of the power of attorney so it covers the estate, the tax return and the later disposal in one instrument, and file. The property tax position is checked at the same time, because a debt there stops the registration, and that is our property tax service.

The estate itself, the tax return and the registrations are our inheritance service, and the reading of the title that comes before any of it is our title study service. No heir has to travel.

If any of the heirs is a national of a neighbouring country and the property is in a border zone, the estate carries an additional rule: one year from the death to sell or apply for authorisation. It is in whether an Argentine can buy land in Chile.

If the deceased also gave property away during life to one of the heirs or to an outsider, the calculation of the shares changes. We explain it in inheritance given away before death.

Frequently asked questions