Objective Few instruments evaluate family caregiver perceptions of challenges caring for persons with dementia and improvement or worsening in these areas. To address this measurement gap, we examine psychometric properties of a Spanish version of the 13‐item Perceived Change Index (PCI‐S), originally validated with English‐speaking caregivers. Methods Cross‐sectional study with 94 caregivers of persons with mild to moderate dementia in Chile. Interviews included caregiver demographics, burden, health perception, distress with behaviours, dementia severity, behavioural symptoms and functionality. Results Caregiver mean age was 55.9 (SD ± 14.14) years and mean years caregiving was 3 (SD ± 2.60). The scale had strong internal consistency (Cronbach α = 0.94), and inter‐observer consistency (CCI = 0.99; 95% CI = 0.95–0.99). Two factors were identified: Management skills (α = 0.89), and somatic well‐being and affects (α = 0.92), explaining 63% of scale variance. Significant associations supporting convergent validity were observed for PCI‐S and subscales with caregiver burden (p < 0.01), health perceptions (p < 0.01), depressive symptoms (p < 0.01) and distress with behaviours (p < 0.01); and in persons with dementia, functionality (p < 0.05), dementia severity (p < 0.05) and behavioural symptoms (p < 0.01) in expected directions. In logistic regression models, perceived worsening (PCI‐S and subscale scores) was associated with more behavioural symptoms (OR = 1.07; 95% CI = 1.03–1.15) and caregiver burden (OR = 1.48; 95% CI = 1.18–1.86); whereas perceived improvement was associated with higher physical functioning (OR = 0.95; 95% CI = 0.91–0.99) in persons with dementia. PCI‐S scores were not associated with socio‐demographic characteristics reflecting divergent validity. Conclusions Spanish version of the 13‐item Perceived Change Index and its two‐factor solution is a valid and reliable measure with clinical utility to detect improvement or worsening in caregivers concerning daily care challenges. Copyright © 2017 John Wiley & Sons, Ltd.