Aysen Tax Benefits for Property Owners: What Expires in 2035

TL;DR: Region XI (Aysen), Region XII (Magallanes), and the Province of Palena receive special tax incentives that expire in 2035. Combined with Chile’s standard 8,000 UF capital gains exemption and some of the lowest land prices in the country ($600 to $3,200 per acre), Patagonia remains one of the most tax-efficient places to own property in Chile. But the clock is ticking on several of these benefits.

Owning property in Chilean Patagonia comes with a set of tax advantages that most of Chile does not enjoy. These benefits were designed to encourage settlement and investment in the country’s remote southern regions. They apply to Region XI (Aysen), Region XII (Magallanes), and the Province of Palena in Region X. The problem: many of these incentives have expiration dates, and the most significant ones run out in 2035.

This article breaks down the current tax landscape for property owners in Aysen, explains what is changing, and outlines what you should plan for before these benefits disappear.

Property taxes in Aysen: lower than the national average

Annual property taxes in Chile are called “contribuciones.” They are calculated as a percentage of the property’s fiscal value (avaluo fiscal), which is the government’s assessed value. In Aysen, the effective rate ranges from 0.8% to 1.4% of fiscal value, depending on the property type and value bracket.

The key detail: fiscal value is typically much lower than market value. A property selling for CLP $150 million might have a fiscal value of CLP $40 million. At a 1% rate, annual contribuciones would be CLP $400,000 (roughly USD $420), a fraction of what the same market-value property would cost in taxes in Santiago or Valparaiso.

Example calculation:

Item	Amount
Market value	CLP $150,000,000
Fiscal value (avaluo fiscal)	CLP $40,000,000
Annual contribuciones (1.0%)	CLP $400,000
Monthly equivalent	CLP $33,333

Properties with fiscal values below a certain threshold (updated annually by the SII) are exempt from contribuciones entirely. Many rural parcels in Aysen fall below this threshold.

The special zone benefits: what they include and when they expire

Chile’s extreme zone (“zona extrema”) legislation grants several tax and economic benefits to Aysen, Magallanes, and Palena. These include:

Corporate and business tax reductions

Businesses operating in these regions can access reduced tax rates and special credits. With President Kast’s proposed corporate tax cut from 27% to 23% nationally, plus the restoration of full tax integration and the potential elimination of some capital gains taxes, businesses in Aysen could see compounding benefits. For details on how the new administration’s proposals affect property investors, see our analysis of the 2026 policy changes.

Zona franca proximity

While the zona franca (duty-free zone) operates primarily in Punta Arenas (Magallanes), its economic effects spill into Aysen. Reduced costs on imported goods and construction materials can lower the cost of building and renovating property in the region.

Infrastructure and development incentives

Government programs subsidize infrastructure development in extreme zones. Road improvements, telecommunications, and public services in Aysen have all received accelerated investment under this framework.

The critical date: Many of these benefits are legislated through 2035. After that, they require congressional renewal. There is no guarantee they will be extended, and the political landscape in 2035 is impossible to predict today.

Capital gains: the 8,000 UF exemption applies everywhere

The 8,000 UF capital gains exemption is not specific to Aysen. It applies nationwide. But it is especially relevant for Patagonia property owners because of the region’s price trajectory.

The exemption works like this: if you are a natural person (not a company), and you meet five specific conditions, gains up to 8,000 UF (approximately USD $300,000 in March 2026) across all property sales in your lifetime are tax-free.

Given that Aysen land prices remain between $600 and $3,200 per acre, many buyers can acquire substantial parcels and still have plenty of headroom under the 8,000 UF limit when they sell. A property purchased for CLP $30 million that sells for CLP $80 million generates a gain of CLP $50 million (roughly 1,300 UF), well within the exemption.

What happens above 8,000 UF?

Gains exceeding the lifetime 8,000 UF limit are taxed under one of two regimes the seller can choose. Rates can reach up to 40% depending on the seller’s income bracket. This is where planning matters, particularly for owners of multiple properties.

Transaction costs: what buyers and sellers actually pay

Beyond annual taxes, every property transaction in Chile involves a set of fixed costs:

Cost	Typical Range	On a CLP $100M property
Notary fees	0.3% to 0.4%	CLP $300,000 to $400,000
Legal fees	~1%	CLP $1,000,000
Agent commission	1% to 2%	CLP $1,000,000 to $2,000,000
Total	2.3% to 3.4%	CLP $2,300,000 to $3,400,000

These costs are relatively low by international standards. There is no transfer tax or stamp duty on residential property sales in Chile.

Foreign buyers: equal rights, higher rental tax

Foreigners have the same property rights as Chilean citizens for residential purchases. There are no foreign ownership quotas, no special permits, and no restrictions on resale. Chile’s 55 bilateral investment treaties provide additional legal protections for foreign investors. For a complete walkthrough of the buying process, see our guide for foreign buyers.

The one significant difference: non-resident rental income. If you own property in Aysen but live abroad and rent it out, rental income is taxed at a flat 35%. This is considerably higher than the progressive rates that Chilean residents pay (which can be as low as 0% for income below certain thresholds). This rate applies regardless of where the rent is deposited.

Planning tip: Some foreign owners structure their stays to qualify as tax residents (spending 183+ days per year in Chile), which can reduce their effective rental income tax rate significantly.

Mortgage rates and financing

Current mortgage interest rates in Chile range from 4.0% to 4.7% in UF terms. Because mortgages are denominated in UF (Unidades de Fomento, an inflation-adjusted unit), the real cost of borrowing remains relatively stable regardless of inflation fluctuations.

For Aysen properties specifically, securing a mortgage can be more challenging than in urban areas. Banks are cautious about rural and semi-rural properties. Expect:

Higher down payment requirements (often 20% to 30%)
Longer appraisal timelines
Fewer banks willing to lend on raw land

Many Aysen transactions, particularly for rural parcels, are completed in cash or with seller financing.

What to do before 2035

The 2035 expiration of extreme zone benefits creates a planning window. Here is what property owners and prospective buyers should consider:

Buy before benefits expire, not after. Properties purchased while incentives are active will have been acquired in a more favorable tax environment. This matters for cost basis calculations.
Structure ownership carefully. If you plan to hold property through 2035 and beyond, consult a Chilean accountant about whether individual or corporate ownership better suits your situation, especially given the proposed corporate tax changes.
Track your 8,000 UF lifetime usage. If you own multiple Patagonia properties, plan the order and timing of sales to maximize the capital gains exemption. Our investment guide for Patagonia covers portfolio strategy in more detail.
Monitor legislative developments. Chile’s congress may extend, modify, or allow the extreme zone benefits to lapse. Stay informed.
Review your tax residency. The 35% non-resident rental tax makes residency planning critical for foreign owners who rent their properties.

Frequently asked questions

Do I pay property tax if I own raw land in Aysen?

It depends on the fiscal value. Many rural parcels in Aysen have fiscal values below the SII’s exemption threshold, meaning zero annual contribuciones. Improved properties (with structures) typically exceed the threshold and do owe contribuciones at 0.8% to 1.4% of fiscal value.

Can a foreigner get a mortgage for property in Aysen?

Technically, yes. Chilean banks can lend to foreigners with a Chilean RUT (tax ID) and legal residency. In practice, financing rural Aysen property is difficult. Most banks prefer urban collateral. Expect to pay 20% to 30% down, and the process takes longer than for properties in Santiago or Concepcion.

What happens to my property taxes if the extreme zone benefits expire in 2035?

If the benefits are not renewed, property tax rates in Aysen could align with national rates, which are slightly higher. The exact impact depends on future legislation. However, because fiscal values in Aysen are already low relative to market prices, the practical increase in annual tax may be modest.

Is Aysen subject to border zone restrictions for foreign buyers?

Parts of Aysen fall within Chile’s border security zone, which restricts foreign nationals from purchasing property within certain distances of international borders. These restrictions require authorization from the Ministry of National Defense. Not all Aysen properties are affected, but parcels near the Argentine border often are. Check the specific property’s location before making an offer.

Disclaimer: Tax laws change. The information in this article reflects regulations as of March 2026. Chile’s tax code is subject to reform, and the proposed changes under the current administration have not all been enacted. Always consult a Chilean accountant or tax attorney (contador auditor) before making decisions based on tax considerations. The SII website (sii.cl) is the authoritative source for current rates and rules.