DFL2 simulator: the 5% flat tax on your rental income
Chile’s Reconstruction Act creates a 5% flat tax on gross rent from DFL2 affordable housing, from the third property onwards. Load your properties and compare, step by step, what your rentals pay today and what they would pay under the reform.
Your DFL2 properties
Add each property with its purchase date. A DFL2 affordable home is up to 140 m². Your 2 oldest DFL2 properties are exempt; from the third onwards we check whether they can pay the 5%.
| # | Floor area (m²) | Purchase date | Monthly rent | Purchase price (optional) | New 140 m² | Treatment | |
|---|---|---|---|---|---|---|---|
| 1 | Exempt | ||||||
| 2 | Exempt | ||||||
| 3 | Pays 5% |
Your other income
Used to place you in the right tax bracket. If you live off rental income only, leave 0.
Where you stand today (no reform)
How your rental income is taxed under today’s rules.
| # | Purchased | Floor area | Rent/year | Treatment today |
|---|---|---|---|---|
| #1 | 3/10/2015 | 75 m² | $5.400.000 | Exempt |
| #2 | 6/20/2018 | 80 m² | $6.240.000 | Exempt |
| #3 | 9/15/2021 | 85 m² | $7.200.000 | Pays ordinary tax |
| Total annual rent | $18.840.000 | $11.640.000 exempt · $7.200.000 pays tax | ||
Your 2 oldest DFL2 property(ies) are exempt: they pay no tax on the rent. The rest do pay personal income tax (Global Complementario).
Personal income tax in Chile (Global Complementario) is progressive: the more you earn in total, the higher the rate on your top bracket. To see what your rentals add, we first look at your tax without them, then with them, and the difference is what the rentals contribute.
Why do we subtract in step 3? You pay the tax on your other income either way, with or without rentals. Subtracting it leaves only what the rentals add. It is like a restaurant bill: if your main course cost $947.963 and with dessert it goes up to $1.523.963, dessert cost the difference.
👉 In short: today, as an individual, your rentals pay (or should be paying) $576.000 per year — only for the properties that pay tax. Your 2 oldest DFL2 properties pay nothing.
Under the tax reform
The new 5% flat tax and how it changes your bill.
The reform creates an optional 5% flat tax on gross rent (with no deduction for expenses) for DFL2 affordable housing from the third property onwards, up to 90 m², rented to someone who is not a direct family member. The 2 oldest stay exempt; those over 90 m² keep paying ordinary tax. It applies from 1 January 2027. Instead of your marginal rate (which can reach 35–40%), those properties would pay just 5%.
It is an optional regime: you can elect the 5% or keep paying ordinary income tax, whichever suits you better.
Since you have no taxable properties over 90 m², nothing stays on ordinary tax under the reform: everything taxable moves to the 5%.
The full assessment, line by line and side by side, is the document on the right: it is the same calculation we just walked through, laid out the way you would see it on a tax return.
No taxable rental income.
Is a company worth it?
We compare holding the properties in your own name with holding them through a company, and when each option makes sense.
Before the reform, it was very common to transfer properties —from the third onwards— to a company or a sole proprietorship. The idea was to defer the tax: with building depreciation and expenses, the company showed little or no profit and paid little or nothing that year, knowing the tax would still be paid later, when profits were withdrawn. A company can depreciate on a straight-line or accelerated basis; here we use accelerated depreciation, which writes off the building in about a third of the time (roughly 16 years instead of 50) and sharply reduces corporate income tax (Primera Categoría, paid by the company) in the early years. But that money stays inside the company, and only when you move it into your own pocket does it pay the tax that was postponed. It is not less tax: it is the same tax, later ("deferral"). Let us look at the numbers to see whether, under the reform, it is still worth moving the properties out of your personal estate and into a company.
a) If I keep everything in my own name (as an individual)
Under the reform you save $216.000 per year, with no structure at all. It is the simplest option and, for most people, the cheapest.
b) If I move the taxable rentals into a company
Two ways to look at it: under today’s rules, and under the reform.
You pay $324.000 this year instead of $576.000 — accelerated depreciation lowers the company’s tax. But the money left inside pays income tax when you take it out: withdrawing all of it, you end up paying around $576.000, the same as in your own name. The company does not lower the tax, it postpones it.
Under the reform you pay $360.000 of 5%. You pay slightly more than by deferring, but it is final: the 5% leaves that income free — there is no hidden bill for later.
b3) In conclusion: is transferring to a company worth it?
Under the reform, a company may no longer be attractive for properties of up to 90 m²: they would pay the same 5% as in your own name, but with the money locked inside the company and losing the 8,000 UF exclusion you have as an individual on a sale. It may be better to keep them in your own name — they pay 5% once, the surplus is tax-free (tax obligation fulfilled), and you keep the benefits on a sale. A company still makes sense for properties over 90 m², where depreciation lets you keep deferring (paying less now and more on withdrawal or sale).
This estimate is, of course, no substitute for tax advice.
General guidance: for most individuals, taking the 5% in your own name is the simplest and cheapest route. A company is justified for other reasons (succession, financing, bringing in partners), not to pay less tax. Assumptions: depreciation over 16 years and corporate income tax of 27%; excludes the cost of transferring the properties and the loss of the 8,000 UF exclusion on a sale. Legal rule: a company on the 5% regime must hold only properties of up to 90 m²; those over 90 m² go separately.
What this simulation assumes
- The law has not been enacted yet. This simulation is a projection based on the text passed by Congress; amounts and conditions may change before publication. The 5% regime would apply from 1 January 2027.
- Counting the "2 oldest" assumes a portfolio acquired after 2010 with no inherited properties (still to be defined in the text).
- Individual without accounting records: the tax base is gross rent. With accounting records you could deduct actual expenses.
- The company scenarios exclude the cost of transferring the properties and the loss of the 8,000 UF exclusion on a sale.
- Legal rule: a company on the 5% regime must hold only properties of up to 90 m². Those over 90 m² go in your own name or in a separate company. An individual can combine the 5% and ordinary tax.
Legal basis: Bill 18,216-05 (text passed, Official Letter No. 21,440, 4 Aug 2026), articles 24 bis and 24 ter of DFL No. 2, and the personal income tax table for tax year 2026 (SII).
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