Selling property in Chile as a non resident: the gain, the 35 per cent and the withholding

Short answer: you can sell a Chilean property without setting foot in Chile, and the tax is on the gain, not on the price. Three numbers decide what reaches your account. The first 8.000 units of account of gain are not income at all, and the Chilean tax authority has confirmed that a seller with no domicile or residence in Chile is entitled to that. Anything above it is taxed at 35 per cent. And separately from the tax, whoever pays you has to withhold, either 10 per cent of the whole amount or 35 per cent of the gain, depending on whether the gain can be established before the money moves.

The gain is what is taxed, not the price

The most expensive misunderstanding in this whole area is thinking that Chile taxes the sale price. It does not. What is taxed is the difference between the price and what the law calls the tax cost of the property.

That tax cost is the acquisition value plus the disbursements on improvements that increased the value of the property, and the whole thing is restated for inflation using the consumer price index, from the month before the acquisition or the improvement to the month before the sale. Two consequences follow. A property held for twenty years has a much larger tax cost than the number written on the old deed. And improvements only count if they were declared to the tax authority before the sale, which is the trap dealt with further down.

This is a different tax from the annual one levied on the property itself, which we covered for foreign owners in property taxes in Chile for foreign owners. One is charged every year on the assessed value, the other once, on the gain, when the property changes hands.

The first 8.000 units of account are not income

Article 17 number 8 letter b) of the Income Tax Act provides that the part of the gain which does not exceed a total of 8.000 unidades de fomento is not income. The unidad de fomento is Chile's inflation-indexed unit of account, and the value used is the one for the last day of the year in which the sale took place.

Two features of this allowance are regularly missed. It is a lifetime allowance for the person, not a per property one: the gains from every sale accumulate against the same ceiling, whatever the number of properties or the number of years. And there is no time limit for using it up.

The requirements are cumulative. The buyer must not be a related party in the sense the article defines, and more than one year must have passed between acquisition and sale, extended to four years where the property comes from the subdivision of land or from the construction of buildings by floors or apartments. For the date, what counts is the registration at the Registrar of Real Property, not the signing of the deed.

The point that decides most of these cases: a non resident seller does get the 8.000 unit allowance. This is not a reading of ours. The tax authority said so in its Circular 43 of 2021, which states that the rules of article 17 number 8 apply to the natural person regardless of the place of their domicile or residence, and it repeated it in rulings addressed to sellers resident in the Netherlands and in Spain. There is an older page of frequently asked questions on the tax authority website that says the opposite, and it is worth knowing it exists before an argument starts at the counter.

What happens above the allowance

The excess over 8.000 units is taxed with what Chile calls the additional tax, at a rate of 35 per cent, on a received basis. That is the rate set for natural persons with neither residence nor domicile in Chile who obtain Chilean source income, and a property situated in Chile is Chilean source income by definition.

There is a 10 per cent substitute tax available in the same article, and it is the one that residents often mention. It is not available to you. The text reserves it expressly to natural persons with domicile or residence in Chile. The same goes for the option of spreading the gain over past years, which is written for the resident income tax and has no non resident equivalent.

The withholding that surprises everyone

This is separate from the tax and it is what actually determines how much money leaves the closing table. Article 74 number 4 of the Income Tax Act obliges whoever remits abroad, pays, credits to an account or places at the disposal of a seller without domicile or residence in Chile the proceeds of the sale of a property, to withhold.

Read the first row again. Ten per cent of the whole price, not of the gain. On a property that has barely appreciated, that withholding can be several times the tax actually owed. It is provisional and creditable, and any excess is recoverable, but recovering it means filing in Chile and waiting, which is exactly what a seller who has just left the country does not want.

How to avoid the 10 per cent on the whole price

The law provides the way out, and it is under used because few people know it is there. The selling taxpayer may apply to the tax authority, before the deadline for declaring and paying the withholding, for a prior determination of the gain on which the withholding is to be calculated.

The mechanics are worth memorising. Filing the application suspends the withholding deadline until it is resolved. The authority must rule with reasons within twenty working days from the date the taxpayer has put all the necessary background in its hands. If the deadline passes without a ruling, the application is deemed accepted and the withholding is calculated on the taxpayer's own proposal. And the gain determined that way cannot afterwards be audited, unless the material supplied was maliciously false, incomplete or erroneous.

There is a second route for the case where the whole gain fits inside the allowance. The same article allows the withholding not to be made where it is evidenced, in the manner the authority establishes, that the amounts correspond to non taxable income. In practice this route requires the seller to be registered for tax purposes first, and it is worth confirming the exact form of the evidence with the regional office before building the closing timetable on it.

Improvements only count if you declared them in time

This is where long term owners lose money. The law only recognises improvements in the tax cost if they were declared to the authority, in the form it establishes, to be incorporated into the assessed value of the property for property tax purposes, and declared before the sale.

The declaration is made on a specific form, and the rule sets the timing: improvements made in a year are declared by the thirtieth of June of the following year, and where the property is sold before that date, the declaration must be filed by the thirty first of December of the year of the sale. Filing late has one stated consequence: the improvements are not treated as part of the acquisition value, even if they were later incorporated into the assessed value.

So a house that was extended, roofed, walled and rewired over fifteen years can end up being taxed as if none of it had happened. If you are thinking of selling, this is the first thing to look at, before the price is even discussed. What the assessed value currently reflects is something you can read yourself, and we explain how in the guide on checking your Chilean property from abroad.

You need a tax number and a representative in Chile

Two separate requirements, and both are obligations of the seller rather than of the buyer.

The first is registration in the Chilean tax roll, which the Tax Code imposes on everyone who causes or may cause taxes. The second is the appointment of a representative domiciled or resident in Chile with sufficient power to make the filings and declarations before the tax authority. The authority's own resolution on obtaining a tax number states both for foreign investors without domicile or residence, and adds that the registration itself is done through that representative.

What you do not need is to register a business activity. Merely holding and selling a property does not require it. If you never obtained a tax number when you bought, that is the first gap to close, and the route is the one described in getting a Chilean RUT without travelling. The same requirement applies on the way in, as we set out in buying property in Chile as a foreigner.

If the property is held through a Chilean company rather than in your own name, almost none of what is written above applies, starting with the 8.000 unit allowance, which is reserved to natural persons. That comparison is the subject of holding Chilean property personally or through a company.

Getting the money out, under the rules that changed in 2026

Here is something most guides on the subject are now wrong about. The Central Bank of Chile approved a new Compendium of International Exchange Regulations effective from the first of January 2026, replacing the previous compendium and repealing each of its chapters. The old Chapter XIV, which everyone in the market still names, no longer exists as such.

Its content moved to Chapter II, Letter B, Section IV of the new compendium, and the new text says expressly that every reference made in laws, decrees, administrative acts or contracts to the old Chapters XII and XIV is to be understood as made to that Section, for all legal purposes. So the substance survived the renumbering.

What that substance means for you. Operations of ten thousand dollars or more, or the equivalent in other currencies, fall under these rules. They must be carried out through the Formal Exchange Market, meaning a bank or an authorised exchange entity, and reported to the Central Bank. In the ordinary case you do not file anything yourself: the bank through which the funds are remitted reports it, and your obligation is to give that bank the correct description of the operation.

The practical rule: tell the bank what the money is before you send it, not after. The description of the operation is what determines how it is reported, and correcting a description afterwards is far more work than getting it right at the counter. If the property was not originally bought with funds brought in from abroad, for example because it was inherited, the classification is different and worth confirming with the bank in advance.

The tax treaty does not reduce the Chilean tax

The tax treaty between Chile and the United States entered into force on the nineteenth of December 2023. It is genuinely useful, and it does not help here. Its article on capital gains provides that gains a resident of one state obtains from the disposal of immovable property situated in the other state may be taxed in that other state, with no rate cap. Chile therefore keeps the full 35 per cent on the direct sale of a Chilean property.

Where the treaty does matter is on the United States side of the same transaction, for the credit and for proving residence. That is United States tax law and a matter for your adviser there. What we can tell you precisely is the Chilean figure, which is the one that has to be withheld and paid here.

The order that works

1. Reconstruct the tax cost first. Purchase deed, its date of registration, and every improvement with documentary support. This is what decides the size of the gain.
2. Declare pending improvements on the proper form, before the sale, within the deadlines above.
3. Obtain the tax number and appoint the representative in Chile, because both the prior determination application and any evidence of non taxable income depend on the seller existing in the tax system.
4. Apply for the prior determination of the gain, so the buyer withholds on the real gain instead of on the whole price.
5. Agree in the deed who withholds and when, because the twelfth day of the following month is a hard deadline and the buyer is the one exposed to it.
6. Give the bank the correct description of the remittance before sending the funds.

Title problems belong before all of this, not after. A property that cannot be registered cannot be sold, and finding that out during the closing is the most expensive moment to find it out. A frequent version of the problem is that what is registered is an undivided share rather than a defined plot, which we explain in shares and rights, and another is that the title never completed its regularisation, covered in regularisation of title. The reading is done with the certificates described in the checks before money moves, and if the title needs work first, that is our title regularisation service. A first indication of whether a property needs it can be had from the regularisation test.

How we handle it

We take the sale as one file rather than as a set of errands. That means reconstructing the tax cost from the deeds, filing the improvements that are still missing, obtaining the tax number and the power of attorney, applying for the prior determination of the gain so the withholding lands on the right figure, and coordinating with the buyer's notary so the deed and the withholding do not fall out of step. The standing property tax position is checked at the same time, because a debt there stops the registration, and that is the subject of contribuciones in Chile.

For the tax and registry side of the operation, that is our title study service working together with the property tax service. None of it requires you to travel: a power of attorney granted at a Chilean consulate is enough to sign the deed itself.

Frequently asked questions