Experts explain that there is no clarity on how the Internal Revenue Service (SII) determines real estate values.
Last week, the General Treasury of the Republic (TGR) reported that property tax revenue increased by 10% in nominal terms in 2024 compared to the previous year.
This tax affects more than 40% of properties and has recently been subject to criticism. Citizens consider the calculation to be opaque, a view shared by several experts who point out that there is no clarity on how the Internal Revenue Service (SII) determines real estate values.
“There Are No Objective Parameters”
Among those critical of the SII’s calculation of property tax is Javier Jaque, Managing Partner of CCL Auditores Consultores. “There are no objective and public parameters for property valuations,” he states.
Experts note that the SII considers multifactor elements in its calculations, such as location, land use, and proximity to transportation and commercial centers. Jaque believes that, even so, “there is still no clarity regarding the criteria used.”
According to him, discrepancies can arise “between homes in similar areas that have different valuations. There is a need to clarify the fiscal reassessment process and its ongoing arbitrariness.”
Meanwhile, Andrés Martínez, Head of Tax Consulting at KPMG in Chile, stated: “Sometimes the specific criteria used for valuations are not entirely clear to property owners, and the availability of data remains limited.”
Francisco Sackmann, manager of the Legal and Tax area at PwC Chile, noted that in one case they reached the Council for Transparency and judicial courts to require that the SII indicate “which elements and/or information it used to determine the value per square meter of a homogeneous area.”
“This situation affects all taxpayers, who see their property taxes increase without an adequate control or review mechanism,” he added.
The case of older adults Luis Felipe Ocampo, partner at Recabarren & Asociados, states that although the law establishes general parameters, everything is “ultimately left to the discretion of the SII.”
He also highlights a concerning issue. The logic is that people buy their homes when they are young, but upon retirement, their income decreases.
If the SII increases the valuation, “it makes it impossible for them to pay property tax installments, putting them at risk of default and having their properties auctioned (…). The rules that attempt to recognize this reality, due to the low maximum valuation thresholds to access reductions, are insufficient. As a result, property owners—typically older adults—must choose between paying property taxes or covering living expenses, exposing them to the risk of losing their homes,” he explains.
2026 Reassessment
The most recent reassessment of non-agricultural properties took place in 2022. According to estimates by Póliza Gestión, a consulting firm specializing in property tax audits and corrections, the fiscal reassessment scheduled for 2026 will imply a tax burden distributed across the country.
The valuation basis is already adjusted according to inflation. The projection assumes that the trend observed since 2019 will remain constant, without considering new factors that the SII may apply.
In a sample of municipalities, for example, if the average property tax for a home in Las Condes was around $1 million in 2022, the estimate—based on its current trend—is that it could reach $1.6 million by 2026.
In a lower-income municipality such as Pozo Almonte, where the average was $141,000 in property taxes in 2022, it already rose to $536,000 in 2024 and could reach $670,000 in 2026.
“We have seen a sustained increase in this tax, which is not justified by inflation alone, but rather by active management by the SII over the property registry,” said Sebastián Hudson, founder and director of the consulting firm.
The situation is similar for vehicles, says Sackmann from PwC Chile. Although the law states that the “normal market value” must be considered when applying the luxury tax, the determination is ultimately left to the SII.
The agency “could potentially incur inconsistencies related to the quality of vehicles, their features, and consequently, the differing values charged in cases where cars are similar or identical.”
He adds that “when downloading the valuation from the SII portal for 2025, although there is a breakdown by vehicle type and brand, it is not possible to determine how a specific feature of a vehicle affects its valuation.”