Buying Property in Chile as a Swiss Citizen: Complete Guide

Switzerland and Chile: a strong bilateral relationship

Switzerland and Chile enjoy one of the most developed bilateral frameworks of any European country with Chile. This goes beyond diplomatic ties: the legal and financial infrastructure connecting the two countries provides Swiss property buyers with protections that are genuinely stronger than those available to most other European nationalities.

The 2025 Bilateral Investment Treaty

In 2025, Switzerland and Chile signed a new Bilateral Investment Treaty (BIT) that replaced the earlier agreement. This treaty provides Swiss investors with protections including fair and equitable treatment, protection against expropriation without prompt and adequate compensation, free transfer of funds related to investments, and access to international arbitration for investment disputes.

For property buyers, this means that if Chile were to enact measures that effectively deprive you of your property rights (regulatory expropriation, discriminatory treatment, or restrictions on repatriating sale proceeds), you have recourse to international arbitration under the treaty. While the likelihood of such events in Chile is low given its stable institutional framework, the BIT provides an additional layer of security that German, French, and Spanish buyers do not have at this level.

Switzerland-Chile DTA for property income and capital gains

The double taxation agreement between Switzerland and Chile provides clear rules for the taxation of immovable property income. Under the treaty, income from property located in Chile (rental income) may be taxed by Chile. Switzerland also taxes worldwide income but applies the exemption with progression method to avoid double taxation, as explained in detail below.

For capital gains on the sale of immovable property, Chile has primary taxing rights under the treaty. The gain is subject to Chile’s non-resident rate (currently 35%), and Switzerland applies its domestic relief mechanism.

How Chilean property affects your Swiss taxes

This is the most complex area for Swiss buyers, and the one where professional advice is most essential. Swiss taxation of foreign real estate involves several interacting concepts that vary by canton.

Exemption with progression (Satzbestimmung)

Switzerland uses the exemption with progression method for foreign real estate income. This means your Chilean rental income or imputed rental value is exempt from Swiss income tax, but it is included in the calculation of your tax rate on your remaining Swiss income.

In practice: if your Chilean property generates CHF 20,000 in annual rental income, that income is not taxed in Switzerland. However, your Swiss taxable income is taxed at the rate that would apply if the CHF 20,000 were added to it. If you earn CHF 100,000 in Switzerland, your Swiss income is taxed at the rate applicable to CHF 120,000, even though only CHF 100,000 is actually subject to Swiss tax.

This progression effect is modest for taxpayers with low foreign income relative to Swiss income, but it can be meaningful for retirees or part-time workers whose Swiss income is already in a lower bracket.

Imputed rental value (Eigenmietwert) for self-used foreign properties

If you use your Chilean property yourself rather than renting it out, Switzerland imputes a rental value (Eigenmietwert) for the purpose of calculating your tax rate under the Satzbestimmung. The imputed rental value is based on what the property could reasonably earn if rented to a third party.

Each canton has its own methodology for determining Eigenmietwert for foreign properties. Some cantons use a percentage of the property’s market value, others use comparable rental rates. The Swiss Federal Tax Administration provides general guidelines, but the cantonal tax authority makes the final determination.

This is not a tax you pay directly, but it increases the rate at which your Swiss income is taxed. Declare your Chilean property to your cantonal tax authority and provide a reasonable estimate of its rental value.

Cantonal variations

Swiss taxation is highly cantonal, and the treatment of foreign property varies across cantons. Some examples of how this can affect your situation:

Vaud: Applies a wealth tax rate of approximately 0.6% (cantonal and communal combined) on worldwide assets, including foreign real estate. Foreign property is exempt from wealth tax but included in the rate calculation (Satzbestimmung for wealth tax).
Geneva: Similar approach with slightly different rates (approximately 0.45% combined cantonal and communal wealth tax). Geneva is known for more aggressive assessment of foreign property values.
Zurich: Uses a more conservative approach to Eigenmietwert for foreign properties. Wealth tax rates are lower than in Vaud or Geneva.
Bern: Follows the federal guidelines closely. Moderate cantonal tax rates.

Your cantonal tax authority is the definitive source. Discuss your planned purchase with your Treuhander or Steuerberater before completing the transaction so you understand the full Swiss tax implications.

Mortgage interest allocation between Swiss and foreign assets

If you have a mortgage on your Swiss residence and also own a Chilean property, there are allocation rules for mortgage interest deductions. Switzerland generally allocates mortgage interest proportionally between Swiss and foreign assets based on their relative values.

This means that part of your Swiss mortgage interest deduction may be allocated to your Chilean property and therefore lost for Swiss tax purposes (since the Chilean property income is exempt under Satzbestimmung, the corresponding expenses are also excluded). The larger your Chilean property is relative to your total real estate portfolio, the more significant this allocation effect becomes.

AEOI (Automatic Exchange of Information)

Switzerland and Chile participate in the AEOI (Automatic Exchange of Information) framework. This means Chilean financial institutions report information about Swiss-held accounts to the Swiss Federal Tax Administration, and vice versa. Ownership of a Chilean bank account (which you may need for property management, tax payments, or rental income collection) will be visible to Swiss tax authorities.

Full transparency is the only appropriate approach. Declare all Chilean assets and income on your Swiss tax return. The days of undeclared foreign assets are long past, and the penalties for non-compliance under Swiss tax law are severe.

Chilean taxes for Swiss property owners

Annual property tax (contribuciones)

Chile levies an annual property tax (contribuciones de bienes raices) based on the fiscal valuation (avaluo fiscal) of the property, which is determined by the SII and is typically lower than market value. The rate varies:

Residential properties: Approximately 1.0% to 1.2% of the fiscal valuation
Agricultural land: Approximately 1.0% of the fiscal valuation
Properties with fiscal valuation below a threshold (approximately CLP 40 million, updated annually) are exempt

For many rural properties in the Aysen Region, the fiscal valuation is quite low, resulting in modest annual tax obligations. Contribuciones are paid in four quarterly installments.

Capital gains: 35% non-resident rate, DTA credit mechanism

When you sell a Chilean property as a non-resident, the capital gain is subject to a 35% tax rate. The gain is calculated as the difference between the sale price and the acquisition cost (adjusted for inflation using the Unidad de Fomento index).

Under the Switzerland-Chile DTA, Chile has primary taxing rights on this gain. Switzerland exempts the gain under the Satzbestimmung method but includes it in the rate calculation for your remaining Swiss income.

Rental income taxation

Rental income from Chilean property earned by non-residents is subject to a 35% withholding tax. If you manage the rental through a Chilean administrator, they are responsible for withholding and remitting the tax. If you manage it directly, you must file Chilean tax returns.

The buying process for Swiss citizens

RUT application

You need a RUT (Rol Unico Tributario) before you can purchase property. Swiss citizens can obtain this:

At the Chilean embassy in Bern or the consulate in Zurich/Geneva
In person at a SII office in Chile with your passport
Through a Chilean lawyer using a notarized power of attorney

Power of attorney and Apostille

If you will not be present for all steps of the transaction, grant a power of attorney (pouvoir/Vollmacht) to a Chilean lawyer. The document must be:

Notarized by a Swiss Notar (the process varies by canton; in some cantons, such as Geneva, the notaire is a public official; in others, such as Zurich, notarization is done by a Friedensrichter or Notar)
Apostilled by the competent cantonal authority (Staatskanzlei in most German-speaking cantons, Chancellerie d’Etat in French-speaking cantons)
Translated into Spanish by a certified translator

Both Switzerland and Chile are parties to the Hague Apostille Convention, so the Apostille is sufficient without further consular legalization.

Currency transfer: CHF to CLP via formal banking channels

Switzerland’s banking system provides robust international transfer capabilities, but the transfer of significant sums to Chile requires attention to compliance requirements on both sides.

Chilean regulations require that foreign currency transfers exceeding USD 10,000 equivalent pass through the Mercado Cambiario Formal (formal exchange market), with reporting to the Banco Central de Chile. From the Swiss side, your bank will conduct standard due diligence on large international transfers under FINMA regulations.

Document the transfer meticulously: bank statements, exchange rates at the time of transfer, proof of the source of funds. This documentation establishes your cost basis for future capital gains calculations in both Chile and Switzerland.

Transaction steps

Obtain your RUT through the embassy, consulate, or a Chilean representative
Engage a Chilean lawyer experienced with foreign buyers and familiar with European concerns
Conduct due diligence: title study (estudio de titulos), lien certificates, property tax status, water rights, border zone status
Sign the promesa de compraventa (deposit of 5-10%, binding preliminary contract)
Transfer purchase funds from Switzerland to Chile through formal banking channels
Sign the escritura publica (final deed, balance payment)
Register at the Conservador de Bienes Raices (1-4 weeks)

Inheritance planning across Swiss and Chilean law

Swiss forced heirship (Pflichtteil) vs. Chilean legitima

Both Switzerland and Chile have forced heirship systems that limit your testamentary freedom. Under Swiss law (as reformed in 2023), the Pflichtteil reserves 50% of the estate for children (previously 75%) and, if there is no will, the surviving spouse receives a statutory share. The available portion (frei verfugbare Quote) has increased to 50%.

Chilean law is more restrictive: 50% goes to forced heirs as legitima rigorosa, 25% as cuarta de mejoras (must go to certain heirs but distribution is flexible), and only 25% is freely disposable.

For Swiss buyers, this means that Chilean succession law may be significantly more restrictive than what you are accustomed to under the revised Swiss system.

Cantonal variations in inheritance tax

Swiss inheritance tax varies dramatically by canton. Some cantons (Schwyz, Obwalden, most of Inner Switzerland) have no inheritance tax at all for direct descendants and spouses. Others (Vaud, Geneva, Neuchatel) levy inheritance tax on bequests, though spouses and direct descendants often benefit from substantial exemptions.

Chilean property is generally subject to Chilean inheritance tax regardless of cantonal rules. Chile taxes inheritances and gifts at progressive rates (up to 25% for large estates). The interaction between Chilean inheritance tax and your cantonal inheritance tax (if any) depends on your canton’s specific rules for crediting foreign taxes.

Cross-border estate planning recommendations

The recommended approach for Swiss buyers is:

Two separate wills: A Swiss will for Swiss and international assets, and a Chilean will for Chilean property, each drafted to avoid revoking the other
Professio juris: Consider choosing Swiss law to govern your succession (where permitted), though Chilean courts may still apply Chilean law to Chilean real property
Early planning: Discuss your Chilean property purchase with your Treuhander, Notar, and a Chilean abogado before completing the transaction, not after
Life insurance: Consider whether a Swiss life insurance policy could help equalize inheritances if Chilean forced heirship constrains your options

Patagonia-specific considerations

Water rights (separate from land title)

In the Aysen Region, water rights (derechos de aprovechamiento de aguas) are legally separate from land ownership. Owning land next to a river does not give you the right to use that water. If you plan to use water for domestic, agricultural, or commercial purposes, verify that the property includes water rights or budget to acquire them separately.

Chile’s 2022 Water Code reform introduced time-limited grants for new water rights and environmental flow requirements. Your lawyer should verify the type, volume, status, and conditions of any associated water rights.

Earthquake insurance and building codes

Chile is seismically active, and Patagonia is no exception. Chilean building codes require seismic-resistant construction, and most residential properties are built accordingly. However, earthquake insurance is not mandatory for individuals (it is mandatory for properties with mortgage financing).

For Swiss buyers accustomed to comprehensive building insurance through the cantonal Gebaude-versicherung system, this is an adjustment. Consider obtaining earthquake insurance privately, particularly for higher-value properties.

Remote property management

If you will not be living at the property full-time, consider how it will be managed. The Aysen Region is sparsely populated, and finding reliable local property management can require effort. Establish a relationship with a local caretaker or property management service before you close the purchase, not after.

Maintenance requirements in Patagonia are specific to the climate: heavy rainfall, strong winds, occasional freezing temperatures, and isolation. Properties need regular inspection, particularly roofing, drainage, and access roads.

Moving forward with confidence

Swiss buyers benefit from one of the strongest bilateral frameworks available for investing in Chilean property. The combination of the 2025 BIT, the comprehensive DTA, and Switzerland’s own transparent tax system creates a solid foundation for a well-structured purchase.

The complexity lies primarily on the Swiss side: cantonal tax variations, Satzbestimmung calculations, and Eigenmietwert determinations require professional guidance from a Treuhander or Steuerberater familiar with foreign real estate. On the Chilean side, a competent abogado experienced with European buyers will handle the transaction efficiently.

Explore our available properties across the Aysen Region, or contact us to discuss your goals and how we can help you find the right property in Patagonia.