1. Capital gains real estate

Taxable gain

The computation of the taxable gain is amended and it will be taxed on an accrual basis.

Exemptions

Capital gains of UF 8,000 (approximately USD 0.3 million) will continue to be treated as non-taxable income during the taxpayer’s lifetime. The preferential rate of 10% also continues. However, these benefits are limited to individuals with domicile and residence in Chile.
The real estate sellers’ option to use inheritance tax paid at acquisition as a tax credit is eliminated.

Effective date

These amendments will become effective as of 2023. Consequently, it will apply to events that occurred or to income received or accrued as of that date.

2. VAT on real estate

Taxable events

Leasing, subleasing, benefiting from or any other form of assigning the temporary use or enjoyment of furnished real estate is eliminated from the list of taxable events under this law.
A special anti-avoidance rule is added that would allow the IRS to levy the tax on sales of fixed assets (Art. 8 letter m) to the indirect transfer of such assets.

Effective date

These amendments will become effective as of the first day of the month following the publication of the Law in the Official Gazette.

Taxable gain

The computation of the taxable gain is amended and it will be taxed on an accrual basis.

Exemptions

Capital gains of UF 8,000 (approximately USD 0.3 million) will continue to be treated as non-taxable income during the taxpayer’s lifetime. The preferential rate of 10% also continues. However, these benefits are limited to individuals with domicile and residence in Chile.
The real estate sellers’ option to use inheritance tax paid at acquisition as a tax credit is eliminated.

Effective date

These amendments will become effective as of 2023. Consequently, it will apply to events that occurred or to income received or accrued as of that date.

2. VAT on real estate

Taxable events

Leasing, subleasing, benefiting from or any other form of assigning the temporary use or enjoyment of furnished real estate is eliminated from the list of taxable events under this law.
A special anti-avoidance rule is added that would allow the IRS to levy the tax on sales of fixed assets (Art. 8 letter m) to the indirect transfer of such assets.

Effective date

These amendments will become effective as of the first day of the month following the publication of the Law in the Official Gazette.