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Real Estate and Tax Reform Proposal

Posted by Leanne Dudley on November 26, 2019
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Many people have asked about one of the points regarding the tax reform in real estate that has been discussed in recent weeks.

It is important to consider one of the following points:

A progressive surcharge will be applied to tax benefits with respect to all real estate assets. This is for taxpayers whose total tax valuation exceeds 400 million pesos. 

This surcharge shall be applied marginally in installments and shall include the tax appraisal to fix it: up to 400 million pesos will be exempt, then for the stretch over 400 and up to 700 million pesos, the rate will be 0.075%. Between 700 and 900 million pesos it will be 0.15%. Over 900 million pesos, 0.275%. SME’s will be exempt from this surcharge.

What does this mean?

If the total of your properties (includes DFL2) exceeds, in tax assessment, (on average they could say that the appraisal is 35% – 65% lower than the commercial) a value of $ 400M (more than UF 14,000) the following will be paid:

  • In the 400MM to 700MM section, between $0 – $225,000 is paid annually. 
  • From 700MM to 900MM, between $225,001 – $525,000 is paid annually.
  • If it goes over 900MM, it is $27,500 per annum for every property over $10M 

A person who has less than UF 14,000 in property would not have to pay anything; commercial value would be approximately UF 20,000 or more. 


Translated from ‘Inversión inmobiliaria y propuesta reforma tributaria

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