Buying Property, Real Estate Markets in Chile
From Chile Wiki
Real Estate In Chile
The Chilean real estate market has experienced a steady increase in property values across Chile over the last 10 years, while at the same time the Peso has also steadily strengthened against other World Currencies. Laws related to ownership of real estate in Chile by foreigners are applied the same as to Chileans, and are fair and predictable.
This is an article stub. More info will be added shortly. For related information on buying property in Chile please see the following temporary links.
Chile Real Estate Law in General
Under the Chilean constitution foreigners are guaranteed for the most part the same rights as any Chilean to buy and sell real estate, even without residency or citizenship in Chile.
There are certain exceptions such as in the case of national security areas. For example, there are restrictions for Argentineans to own property in specially designated boarder areas of Chile that might pose a national security risk. For other situations nationality or residency is not a consideration in owning property in Chile. On the other hand, owning property in Chile does in no way provides any sort of residency or Chilean immigration status.
The only thing that is required for a foreigner to legally own a property is a RUT or Chilean tax payer id number that can be obtained at most Chilean IRS offices in Chile or through a Chilean power of attorney by a third party.
YOU DO NOT NEED TO BE A RESIDENT!!! You can buy and own property in Chile with simply a tourist visa, and even without ever physically visiting Chile (not recommended).
More information and assistance with Real Estate Law in Chile can be found at:
Chile General steps related to buying and owning property in Chile
These are the general steps that are typically followed in purchasing real estate in Chile. However, every property purchase is slightly different.
1. Find the property you wish to buy.
2. Negotiate general terms with the seller.
3. Find an attorney to represent you in the sale (can be earlier in the process).
4. Have a title search conducted to determine that the seller is really able to legally transfer the property to you, and you are protected from such things as government expropriation (e.g. having a road built through your property) , building permits are in order , taxes are paid, there are not family inheritance issues, the property is not indigenous land, among many many other issues that should be checked .
5. Have a buy / sale contract drafted and arrange for a signing.
6. Make arrangement for payment including dealing with any international wires and money laundering compliance paperwork required for transaction of more than $10,000 US in to Chile.
7. Determine how money will be secured between the time the buy / sell contract is signed and when contract is registered.
There is no such thing as an escrow account in Chile as exist in other countries. Typically a bank counter check type instrument for the amount of the property is deposited in the safe of the Notary public where the contract is signed with instructions for its release to the seller or its return to the buyer, if certain conditions are met regarding the title.
8. Register the title at the proper regional registry. This can range from the same day in some parts of Chile to well over a month in very busy areas. For example, the Temuco registry recently reported over 2,000 new properties registered in one month and it was taking between 2 weeks and month at the time this article was written to complete a registration of a new title.
9. Enjoy your property.
Things to DO when buying a property in Chile
There are many steps to owning property in Chile. The following is intended to simply be an outline to far more complex issues that will be addressed at a later time here in the real estate section of the Chile Wiki.
Some things you MUST DO to buy and own a property in Chile
- obtain a RUT number from the IRS.
- sign a buy / sell agreement in front of a CHILEAN Notary Public. You can not do this at any other sort of Notary in any other country.
- Register the property with the proper regional registry.
Some things that are HIGHLY recommended when buying property in Chile:
- Have a qualified attorney conduct a title search on the property and draft your buy sell contract. This almost falls under the previous category. Disregarding this step is like Gambling with much worse odds. Without a title search in Chile, your property could be at risk and subject to all sorts of problems for up to 10 years or in some cases 30 years after you purchase when the statute of limitations on claims against the property expire.
- Have the final buy / sell contract drafted by an attorney based on a full title search.
Some things that are Optional but a good idea when buying property in Chile:
- When buying land in Chile, have the property resurveyed. This becomes more of an imperative as you move towards more rural areas such as the Patagonia where property line problems are common. More Urban areas tend to have well settled property lines.
- Treat any purchase agreements to later sign a buy / sell contract with the same care as the final buy / sell contract.
Some other things to consider:
Things NOT TO DO when buying a property in Chile:
These are just a few of things to avoid in real estate transactions in Chile.
Things to NEVER DO:
- Never allow a real estate agent or someone other than a qualified attorney draft your buy / sale contract. That is, hire an attorney to represent you!!!
This includes Notary and Registries, without the over site of your attorney. In some areas it is common for the local notary to use a stock buy /sell contract. These will often not protect you for your particular situation, and could potentially be voided at a later time if ever challenged in court.
Real estate purchases in Chile MUST be done in a formal contract with a Chilean Notary public. You can not simply shake hands or sign a piece of paper and have a legally binding real estate transaction in Chile.
Things that are not a good idea:
- Never commit to buying a property in Chile unless you really are sure you have the money available and are sure you wish to really purchase that particular piece of property. It undermines your creditability in the community, should you decide at a later time to buy property.
Paying for property in Chile
As a foreigner buying property in Chile there are several special considerations involved, and you must plan accordingly. Among these are problems with banking, money laundering law compliance regulations, and lack of escrow accounts during title registration.
The tradition in Chile when buying real estate in Chile, the tradition is to place a Vale Vista or bank counter Check at a Notary Public with instructions for its release or return when you sign your buy / sell contract until the property is registered. This could range from a few days in some areas to several weeks in others. This insures that the seller did not enter in to other contracts that could be registered during the time in which you are waiting for your property title in Chile. This mostly is done to protect the seller from a long and costly court battle to recover the money from the seller, should it turn out that they for example sold the property twice in one day. This is rare in Chile, but this step is insurance against any such problems occurring.
Finding Property In Chile
Finding and buying a property in Chile can in some locations be very easy. In others, it can take a lot of work to find a good property, at a good price, or even be able to discover what is for sale.
Real Estate Agents in Chile
Real estate Agents in Chile are not regulated in any way. Anyone can be a real estate agent, and there is not certification. There are real estate agent associations, but they also have not responsibility or over site of the activities and practices.
Agents can range from a very professional agency with large offices, to simply a member of the community who happens to know what is for sale.
Chile Real Estate Agent commissions
Real Estate agent commissions in Chile in general range from 1.5% to 3.0% of the sale price. Both the buyer and the seller are expected to share the agents commission, even though in most cases the real estate agent represents the seller.
This however is not a hard and fast rule. Often, depending on the level of involvement of the agent in the sale, the commission can be negotiated as part of the sale. This often easiest when the agent had little or nothing to do with you finding the property.
The commissions and lack of professionalism among real estate agents in Chile often results in many properties not being sold or listed with agents. This presents a problem for those trying to locate property.
Often, local attorneys will act as real estate agents especially in smaller communities.
Other Sources for finding property
Simply asking. The best way often to find property in any area is to simply ask around and network with the local community. Talk to the taxi drivers, talk to waiters, talk to local attorneys.
- Notary office boards
- Registry office boards
- Local papers
The real estate market in the US works differently from most countries thanks to the MLS system and real estate agents intermediating 80%+ of transactions. Expect to find less online information about properties in Chile than you would in the US, as well as spend more time to complete a transaction, even a rental. That said, some sites list properties FSBO or handled by real estate agents: