Chile doesn’t have an annual tax on an individual’s total net worth. However, several taxes apply to specific assets that are part of an individual’s wealth.
In 2022, a wealth tax was proposed, with progressive rates ranging from 1% to 1.8% on net worth exceeding CLP 5 billion, but the proposal was rejected. Instead, Chile opted to tax specific assets, including luxury, high-value real estate and the equity of businesses.
2. Taxes that apply to specific assets
| Tax | What it applies to | Key point |
| Luxury asset tax | High-value cars, aircraft, helicopters and yachts | Annual tax of 2% of market value |
| Real estate tax and surtax | Real estate | The surtax applies when the aggregate tax review value is approximately CLP 600 million or more. Subject to certain requirements, it does not apply to the primary residence of individuals aged 65 or older. |
| Municipal business license | The equity of individuals or entities carrying out commercial or professional activities | The annual rate ranges from 0.25% to 0.5%, depending on the municipality where the activity is carried out. |
| Inheritance, estate allocations and gifts | Transfers of wealth between generations | See Sections 5 and 6 |
3. Luxury assets
An annual tax equal to 2% of market value is payable in April on certain assets registered in Chile as of December 31st of the previous year. The tax was introduced by Article 9 of Law No. 21,420, which finances Chile’s Universal Guaranteed Pension (Pensión Garantizada Universal, in Spanish), and was first collected by the Chilean Internal Revenue Service (SII, for its initials in Spanish) in April 2023.
The tax is payable by the owner. When an asset has multiple owners, the tax review is issued to only one of them. Each year, the SII publishes a list of the assets subject to the tax and their corresponding values.
The annual tax is equal to 2% of the asset’s fair market value and applies to assets registered or located in Chile as of December 31st of each year:
| Asset | Threshold |
| Cars, station wagons and similar vehicles | 62 UTA (approximately CLP 53.9 million) |
| Yachts | 122 UTA (approximately CLP 106.1 million) |
| Manned helicopters and aircraft weighing more than 160 kilograms | 122 UTA (approximately CLP 106.1 million) |
Assets owned by the Chilean Treasury or municipalities are not subject to this tax. Neither are assets that companies engaged in certain activities use as an essential part of their business, such as aircraft operated by airlines. Specific exemptions also apply, including an exemption for sailing yachts used by athletes.
4. Real estate: property tax and surtax
In addition to property tax, individuals who own several properties may be subject to a surtax based on the combined tax assessment value of their real estate holdings. The surtax applies when the combined tax assessment value of all properties owned by an individual exceeds approximately CLP 600 million. It is progressive, with rates ranging from 0.075% to 0.425%, and also takes into account an individual’s ownership interest in jointly owned property. The SII calculates the surtax and collects it together with the corresponding property tax. These taxes are imposed on the real estate itself, rather than on the individual’s income.
It should also be noted that the tax amendments introduced by recently enacted Law No. 21,850 exempt the primary residence of individuals aged 65 or older from property tax and the real estate surtax, when certain requirements are met.
5. Inheritances and donations
The inheritance, estate allocation and donation tax is the main tax applicable to intergenerational wealth transfers. Three areas are particularly relevant in determining the tax treatment:
- 2026 tax amendments. The amendments provide for a 50% reduction in inheritance and donation tax rates for a 12-month period. Families should consider whether this temporary measure creates an opportunity to plan and bring forward their succession arrangements.
- Land with native forest. Land suitable for forestry with at least 30% native forest cover is exempt from inheritance and donation tax. Following SII Ruling No. 771, the exemption also applies where the land is owned by a company and the interests in that company are inherited or donated. This differs from the position previously adopted in SII Ruling No. 1,454 of 2013.
- Valuation of assets. As a general rule, assets forming part of the deceased’s estate are valued at their market value as of the date of death for purposes of determining the taxable base. As an exception, real estate is valued at its tax assessment value when it is personally owned by the deceased or by a limited liability company in which the deceased held an interest.
6. Life insurance and inheritance tax
Since February 2022, life insurance proceeds received by a beneficiary following the death of the insured have generally been subject to inheritance tax. Law No. 21,420 eliminated the exemption that previously applied.
Certain products remain outside this treatment, including disability and survivorship insurance under the pension funds (AFP, for its initials in Spanish), mortgage life insurance, annuities funded through AFP pension savings, and voluntary pension savings, which are subject to a 15% tax. Property insurance, endowment insurance and personal accident insurance are also excluded.
The insurance company withholds the tax before paying the proceeds to the beneficiary. A beneficiary receiving proceeds from a single policy is not required to take any further action. However, a beneficiary receiving proceeds from two or more policies must file a single return and recalculate the applicable tax.
Policies entered into on or before February 3rd, 2022 remain subject to the previous treatment and are therefore exempt from inheritance tax, as long as they have not been amended since that date. The SII may review insurance arrangements containing terms that are inconsistent with market conditions or that were structured to avoid the tax.
7. Families with assets or businesses outside Chile
Chile’s annual income tax filing process (Operación Renta, in Spanish) does not end with Form 22. Taxpayers with investments abroad must also file the relevant international statements (Declaraciones Juradas, or DJs, in Spanish) by June 30th of each year. Failure to file these statements, or filing them incorrectly, may result in penalties and discrepancies being flagged in Form 22.
| Filing | Information reported |
| DJ 1929 | All investments outside Chile as of December 31st, even if they have not generated income |
| DJ 1930 | Debt with foreign creditors, for purposes of interest expense controls |
| DJ 1952 | Foreign trusts, including information on the settlor, trustee and beneficiaries resident in Chile |
| DJ 1907, 1913 and 1950 | Multinational groups, including related-party transactions, organizational structure and master file information |
| DJ 1963 and 1964 | Crypto-assets. These filings are made by the relevant platforms rather than by the individual |
Foreign-source income reported on DJ 1929 must be consistent with the amounts reported on lines 12 and 13 of Form 22. The SII automatically identifies discrepancies and cross-checks the information against data obtained from international sources. DJs 1907, 1937, 1950 and 1951 may be granted an extension of up to three months.
Chileans who are also U.S. citizens
Individuals born in the United States to a Chilean parent may hold both Chilean and U.S. citizenship. The United States taxes its citizens on their worldwide income regardless of where they live, which means that individuals may find themselves non-compliant with U.S. tax obligations without being aware of it.
The risk may be particularly relevant in wealth and estate reorganizations because of the U.S. rules governing foreign companies controlled by U.S. citizens. There are procedures available to address non-compliance in good faith and, in certain circumstances, individuals may also consider giving up U.S. citizenship.
Frequently asked questions
Is there a wealth tax in Chile?
Chile doesn´t have an annual tax on an individual’s total net wealth. Instead, certain specific assets are taxed, including luxury, high-value real estate and equity subject to a municipal business license.
How much luxury car, yacht or aircraft pay?
The annual tax is 2% of market value, provided the asset exceeds the statutory threshold and is registered in Chile as of December 31st. The tax is payable in April.
When does the real estate surtax apply?
It applies when the combined tax assessment value of all properties owned by an individual exceeds approximately CLP 600 million.
Are life insurance proceeds received by family members subject to tax?
Yes. Since February 2022, life insurance proceeds have generally been subject to inheritance tax, with certain exceptions, including mortgage life insurance and voluntary pension savings.
How does inheritance tax apply to land with native forest?
Land suitable for forestry with at least 30% native forest cover is exempt from inheritance tax, as long as it is certified by CONAF. CONAF has 60 days to issue its response.
Do I have to report my investments abroad if they have not generated income?
Yes. DJ 1929 requires all investments held outside Chile as of December 31st to be reported by June 30th.
Does a Chilean born in the United States have U.S. tax obligations?
The United States taxes its citizens regardless of where they reside. Procedures are available to address non-compliance in good faith.
José Luis Campino
Tax Associate, Fischer y Cía.