Capital Gains Tax on Property Sales in Chile: What You Need to Know

How much tax do I pay when selling property in Chile?

Most individual property sellers in Chile pay zero capital gains tax thanks to the 8,000 UF lifetime exemption (approximately USD $300,000 in gains). If your total profit across all property sales in your lifetime stays below 8,000 UF, and you meet five conditions, the gain is classified as “ingreso no renta” (non-taxable income). If you exceed the threshold, you choose from three tax options ranging from 10% flat to a progressive rate up to 40%. This exemption applies equally to Chilean citizens and foreign owners.

Understanding capital gains tax is essential whether you are selling a house in Coyhaique or rural land in Patagonia. This guide explains the rules, works through real examples, and covers IVA and international tax treaties.

What is the 8,000 UF exemption?

The 8,000 UF exemption is the primary tax benefit for individual property sellers in Chile. Under Article 17 No. 8 of the Ley de la Renta (Income Tax Law), your capital gain is completely tax-free if it falls below the lifetime limit and you meet all five conditions.

What is UF?

UF (Unidad de Fomento) is Chile’s inflation-indexed unit of account. As of March 2026, 1 UF equals approximately CLP $38,000 (roughly USD $38). The UF value adjusts daily based on the Consumer Price Index. Chile uses UF for mortgages, tax thresholds, and real estate transactions to protect against inflation. So 8,000 UF equals approximately CLP $304 million or USD $304,000.

The five conditions for the exemption

All five must be met simultaneously. If you fail any single condition, the exemption does not apply.

Condition	Requirement
1. Location	The property must be located in Chile
2. Seller type	The seller must be a natural person (persona natural), not a company
3. Tax regime	The seller must not calculate First Category Tax on effective income (meaning you are not in the real estate business)
4. Related parties	The sale must not be to a related party (family member, controlled company)
5. Acquisition date	The property was acquired after January 1, 2004

An additional practical requirement: sufficient time must have passed between acquisition and sale. For properties acquired from 2017 onwards, at least one year is generally expected.

Critical detail: The 8,000 UF limit is cumulative across ALL property sales in your lifetime. It is not a per-transaction threshold. If you sold one property with a CLP $200 million gain and then sell another with a CLP $150 million gain, your cumulative total (CLP $350 million) may exceed the 8,000 UF cap.

Source: SII, Capital Gains on Property Sales

What happens if my gain exceeds 8,000 UF?

If your capital gain exceeds the 8,000 UF lifetime limit (or you do not meet all five conditions), you must pay tax on the gain. Chilean law offers three options. You choose the most favorable one when filing your annual tax return (Operacion Renta).

Option 1: Global Complementary Tax (Impuesto Global Complementario)

The capital gain is added to your other annual income and taxed at Chile’s progressive income tax rate. Rates range from 0% to 40% depending on total income.

Annual Taxable Income (UF)	Tax Rate
0 - 13.5	0%
13.5 - 30	4%
30 - 50	8%
50 - 70	13.5%
70 - 90	23%
90 - 120	30.4%
120 - 310	35%
Over 310	40%

Best for: Sellers with low annual income who sold a property with a modest gain above 8,000 UF.

Option 2: Average rate (Tasa promedio)

The gain is taxed at the average Global Complementary Tax rate you paid over the years you held the property (maximum 10 years). This spreads the tax impact over time rather than concentrating it in one year.

Best for: Sellers who held the property for many years and have moderate income. The averaging effect reduces the effective rate.

Option 3: Flat 10% tax (Impuesto unico y sustitutivo)

A flat 10% tax on the entire capital gain, regardless of your other income. This is the simplest option and requires no complex calculations.

Best for: High-income sellers whose progressive rate would exceed 10%. If your marginal rate is 23% or higher, this option saves money.

How do I calculate the capital gain?

The capital gain (mayor valor) equals the sale price minus the “tax cost” (costo tributario). The tax cost is your original acquisition price adjusted for inflation using the CPI variation between the purchase date and sale date. This adjustment is applied automatically through UF conversion.

Worked example

Suppose you bought a property in 2018 for CLP $60 million and sell it in 2026 for CLP $120 million.

Original cost in UF (2018): CLP $60,000,000 / CLP $27,500 (UF value in 2018) = 2,182 UF
Sale price in UF (2026): CLP $120,000,000 / CLP $38,000 (UF value in 2026) = 3,158 UF
Capital gain in UF: 3,158 - 2,182 = 976 UF
976 UF is below the 8,000 UF lifetime limit: Tax owed = CLP $0

Now suppose the gain is 10,000 UF (approximately CLP $380 million):

Under Option 1 (IGC): Taxed at your marginal rate (potentially 35-40% for high earners)
Under Option 2 (average rate): If your average rate over 8 years was 15%, you pay 15% on the gain
Under Option 3 (flat 10%): 10,000 UF x CLP $38,000 x 10% = CLP $38,000,000 (approximately USD $38,000)

For most sellers in the Aysen Region, where property values are moderate compared to Santiago, the 8,000 UF exemption covers the entire gain.

Does IVA (VAT) apply to property sales?

IVA (19% VAT) does NOT apply to most individual sellers of used residential property. You will not pay IVA if you are selling your own home or investment property as a natural person.

IVA applies only when:

The seller is a “vendedor habitual” (habitual seller), meaning someone in the business of buying and selling properties
The seller is a construction company or real estate developer
The property is new and being sold for the first time by a developer

Important: Even when IVA applies, land is always exempt. Only the construction value is subject to IVA. The standard rate is 19%.

Source: SII, IVA on Property Sales

What are the tax rules for foreign sellers?

Foreign sellers are subject to the same capital gains rules as Chilean nationals. The 8,000 UF exemption applies equally to foreign natural persons, provided they meet all five conditions.

Tax treaties

Chile has double taxation treaties (convenios de doble tributacion) with numerous countries, including:

United States
United Kingdom
Canada
Australia
Germany
France
Spain
New Zealand
Japan
South Korea
Brazil
Argentina
Mexico
China

These treaties may reduce or eliminate double taxation on your capital gain. Under most treaties, the country where the property is located (Chile) has primary taxing rights, but the treaty prevents you from being taxed twice on the same gain. Consult a tax advisor in both countries to optimize your position.

For the full process of selling as a foreigner, see our guide for foreign sellers.

Non-resident withholding

Non-resident sellers may face withholding tax at the source. The buyer or notary may be required to retain a percentage of the sale price and remit it to the SII. This withholding is credited against your final tax liability when you file your annual return.

When and how do I report the sale?

You must report the property sale in your annual tax return (Declaracion de Renta), filed each April for the previous year’s transactions. Even if the gain is fully exempt under the 8,000 UF rule, you must still declare the sale. The SII provides a step-by-step assistant for property sale declarations.

Key deadlines:

Sale completed in 2026: report in April 2027
Form 22 (annual income tax return) is filed online at sii.cl

Source: SII, Property Sale Tax Guide

Summary: Capital gains tax at a glance

Scenario	Tax Rate
Gain under 8,000 UF lifetime limit (all conditions met)	0% (non-taxable)
Gain over 8,000 UF, Option 1 (Global Complementary)	0% to 40% progressive
Gain over 8,000 UF, Option 2 (average rate)	Average rate over holding period (max 10 years)
Gain over 8,000 UF, Option 3 (flat rate)	10% flat
Habitual seller (real estate business)	First Category Tax: 27% + additional taxes

For a full breakdown of all costs when selling, see our complete selling costs guide.

Ready to sell your property in Patagonia?

Understanding your tax position is an important first step. Gather your required documents and, when you are ready, list your property on Propiedades Patagonia to connect with buyers searching for properties across the Aysen Region.

For the complete selling process, read our guide to selling property in Patagonia.