Chile’s Kast Tax Reform Passes: What Changes for Foreign Residents

Chile · Taxes

Chile has just passed its biggest tax reform in years, and for foreign residents the message is mostly reassuring: the rules that make Chile attractive to new arrivals are untouched, while older homeowners pick up a genuine break.

What passed

On July 22 the Chamber of Deputies approved most of President José Antonio Kast’s “National Reconstruction and Economic and Social Development” bill, his biggest legislative win since taking office in March. The vote was 85 in favour to 59 against.

One article, dealing with how municipalities are compensated for a property-tax exemption, was sent to a joint committee for lack of the required quorum. The rest of the reform is a step from promulgation.

The corporate cut

The headline measure lowers the corporate income-tax rate from 27 percent toward 23 percent by 2029, phased through the intervening years. The government framed it as restoring Chile’s tax competitiveness for investment.

The reform also adds capital-repatriation incentives and tax stability for large investments. Most of it sits on the corporate and investment side rather than personal taxation.

The break for older homeowners

The change that reaches individuals most directly is the exemption of the first home of people over 65 from municipal property tax, the contribuciones. For older expats and retirees who own their home in Chile, that is a real annual saving.

The mechanism for compensating municipalities that lose the revenue is the piece still being finalised, so the exemption’s exact operation may be confirmed shortly.

What did not change

For arriving remote workers and new residents, the rules that matter most are untouched. Chile still taxes new arrivals only on Chilean-source income for their first three years, extendable to six on application to the tax authority.

Chile still has no wealth tax, and its income-tax treaty with the United States, in force since 2024, remains. The reform does not alter the foreign-income runway that draws remote workers.

What it means for foreign residents

The net effect is a friendlier investment climate and a modest, concrete win for older homeowners, with nothing lost for new arrivals. It reinforces rather than changes the case for moving to Chile.

The corporate cut is phased and the municipal-compensation detail is unfinished, so confirm timing and any personal impact with a Chilean accountant. This is general information, not tax advice.

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