The debate on the taxation of high‑net‑worth individuals has gained increasing relevance in Chile. In 2022, with the new government installed, a proposal was introduced to establish a wealth tax, intended to levy a tax on the net worth of individuals domiciled or resident in Chile whose total assets exceeded approximately CLP 5,000 million as of December 31st of each year, subject to progressive rates ranging from 1% to 1.8%.
Although this proposal did not progress, this does not mean that the Chilean tax system has no wealth taxation. Chile currently imposes a number of specific taxes on the holding and transfer of assets which, by being levied on accumulated wealth rather than on the income derived therefrom, operate similar to a wealth tax.
Luxury assets
The annual tax on the ownership of certain luxury assets, enacted by Law No. 21,420, eliminated or reduced various tax exemptions in order to finance the Guaranteed Universal Pension (PGU, for its initials in Spanish).
This tax is levied at a flat rate of 2% of the fair market value of certain assets registered in Chile as of December 31st of each year. assets subject to this tax include, among others, high‑value motor vehicles, as well as aircraft, helicopters, and yachts.
The tax accrues annually and must be paid by the owner of the asset. The Chilean Internal Revenue Service (SII, for its initials in Spanish) is responsible for determining and publishing both the fair market value of these assets and the official list of taxable assets. In recent years, the SII has supplemented the framework through resolutions and circulars clarifying the applicable valuation criteria.
Real estate, property tax, and real estate surtax
Regarding real estate, in addition to the Property Tax (Impuesto Territorial, in Spanish), Chilean law provides for a surtax applicable when the aggregate assessed value of property owned by the same taxpayer exceeds approximately CLP 600 million.
This surtax is imposed on a progressive and marginal basis on the total assessed value of the properties, including ownership interests in cases of co‑ownership, with rates ranging from 0.075% to 0.425%. It is assessed, billed, and notified by the Chilean IRS together with the regular property tax.
Our tax associate José Luis Campino stated in a recent article published by Diario Financiero newspaper: “These are taxes that do not apply to taxpayers’ income, but rather to a specific asset (real estate) that they own.”
Juan Cristóbal Ortega, partner at Fischer y Cía, explained in the same publication that: “for this tax, there is also a surtax when the sum of the assessed values (as determined by the Chilean Internal Revenue Service) of the properties owned by the same taxpayer exceeds approximately CLP 600 million.”
These considerations underscore the significant impact that real estate taxation has on high‑net‑worth taxpayers, particularly those with substantial exposure to residential or commercial real estate.
Other taxes with a wealth‑based structure
In addition, other taxes affect relevant manifestations of wealth. Among them is the municipal business license tax, a local tax imposed on individuals and legal entities engaged in commercial, industrial, professional, or service activities. This tax is determined based on the taxpayer’s equity capital and may reach significant annual amounts.
Likewise, the inheritance, gifts, and donations tax plays a central role in the taxation of accumulated wealth and intergenerational transfers, while the Global Complementary Income Tax imposes progressive rates on personal income and concentrates a substantial portion of its revenue among high‑net‑worth individuals.
Accordingly, while it is accurate to state that Chile does not impose a comprehensive net wealth tax, understood as an annual tax levied on the total assets minus liabilities of an individual, this does not mean that wealth is not taxed under the current system.
Even though a general wealth tax proposal did not advance, the effects of wealth taxation in Chile are reflected in a fragmented system of asset‑based taxes that apply to the ownership and transfer of high‑value assets.
In this context, a proper understanding of the applicable tax framework is particularly relevant for family offices and high‑net‑worth individuals, considering both the economic impact of these taxes and the active enforcement role of the tax authority.