Capital Gains Tax on Real Estate in Chile
- Category: Real Estate
Real estate capital gains, over 189 million pesos (approximately 400,000-500,000 U.S. currently), held by private individuals for more than 1 year will now be subject to a new limited capital gains tax on the profits from the sale of their property in Chile; however, this will be phased in against the individuals personal income tax over several years, the first approximately 189 million is tax free, and individuals are now allowed to deduct costs of development (e.g. construction costs, improvements, price paid).
This change of law was mostly motivated by closing a loop-hole exploited by real estate development companies, where the owners would develop a property, deducting development costs from their taxes, but maintain the property in a private individuals name to avoid any corporate capital gains tax at the time of sale.
Even with this new capital gains tax, real estate in Chile still provides big opportunities for private owners, especially in properties such as houses, apartments, and commercial offices.
Spencer Global can assist foreigners to determine their tax liability and tax advantages to owning real estate in Chile, before they purchase any particular property.
Spencer Global can assist foreigners to determine their tax liability and tax advantages to owning real estate in Chile, before they purchase any particular property.
