How to Buy Property in Santiago de Chile
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Over recent decades, the housing market in the Chilean capital Santiago has seen steady growth amid a generally high-level of prosperity in the country, making it one of the most lucrative real estate markets in Latin America. As such, a popular choice among investors is to buy property in Santiago, including as a potentially profitable alternative to renting among those whose primary intention is to incorporate a company in Chile, or otherwise do business in the country unrelated to real estate.
Chile boasts Latin America’s fourth-largest economy, recording a gross domestic product (GDP) of $294 billion in 2019 (all figures in USD). That same year, the country also recorded a gross national income (GNI) of $15,010 per capita — making it a high-income country, according to the World Bank standards. The Andean nation also ranks first among Latin American nations in the 2020 editions of the United Nations’ Human Development Index (HDI) and Gender Development Index (GDI), while having one of the highest rates of academic coverage in the region.
In 2019, Chile received $11.4 billion of foreign direct investment, reaffirming its position as one of the most popular destinations for foreign investment in Latin America. In addition, the South American country has multiple free-trade agreements (FTAs) in force with top economies in the Americas, Asia, and Europe. Chile is also part of the Pacific Alliance, a regional economic bloc that also includes Colombia, Mexico, and Peru. The country’s prime exports are copper, wood and wood pulp, fruits and nuts, and fish fillets.
To buy property in Santiago: what you need to know
Investing in Santiago’s real estate market is a popular choice among foreign business executives performing commercial operations in the country for a long period of time, because property prices in Chile — and especially in its key urban areas — have increased considerably over recent decades, providing a good return on investment (ROI) for many investors.
Moreover, buying property in Santiago is straightforward, and foreign citizens do not necessarily need to live in the city or have a residence permit at the time of purchase. Meaning that even with just a tourist visa, you can buy property in Santiago.
However, keep in mind that foreigners who enter the country as tourists and wish to buy property must first obtain a Chilean Tax Identification Number (Registro Único Tributario – RUT) from the Internal Revenue Service (SII).
How to buy property in Chile in 5 steps
To buy a property in Santiago, you must follow five key steps:
- Contact a reliable agent: Engaging with an experienced real estate agent is a wise decision to buy property in Chile, especially if you are unfamiliar with the market. In this way, you will be able to count on that company’s auditing of the properties it is selling. Note that the average commission for a real estate agent is around 2 percent of the property’s value, plus the amount equal to the Value Added Tax (VAT).
- Choose your property: The real estate agent will provide you with a host of property options to look at, based on your needs and budget, and will be available to take you around to visit them, as well as to suggest alternative options.
- Sign purchase agreement: Once the property has been chosen, you and the seller — be it a person or a real estate agency — must sign a purchase agreement, known as a ‘promesa de compra venta’ in Spanish. This document describes the conditions under which a property is sold and bought, as well as the penalties that will be imposed in the event that one of the parties breaches its duty.
- Legalize the purchase agreement: You must legalize the purchase agreement before a local notary public.
- Register the purchase agreement: Once the purchase agreement is signed and legalized, you must register it with the Chilean Real Estate Custodian. The cost of this process will depend on the value of the property.
Note that if you register the purchase agreement of a new property, the SII will issue a tax identification number for the collection of property taxes.
Get expert legal advice before you purchase real estate
While the real estate agent that you deal with will be invested in guaranteeing your compliance with all regulations and norms, it pays to have the peace of mind of having a local expert acting in your best interests. Because, regardless, you are going to want to consult with a lawyer in Chile before completing the purchase, so it makes sense to contract them beforehand and have them engaged in the entire process.
Source: Biz Latin Hub
Post available in: English