The Executive Branch’s proposal includes three housing-related measures that directly impact the VAT exemption, the new DFL 2 regime, and tax exemptions.
On Tuesday, April 22, the Executive Branch submitted the National Reconstruction Bill to Congress, seeking to urgently address the economic stagnation and restore growth in Chile.
Among the 40 measures presented, the bill introduces three with a direct impact on the real estate and housing sector, aimed at reviving construction, reducing the housing deficit, and protecting older adults who own their first home.
- Temporary VAT exemption for new homes (12 months)
- Duration: 12 months from the publication of the law.
- Scope: first sale of homes with municipal occupancy permits as of the date of publication. Includes parking spaces and storage units sold together.
- Formalization requirement: the sale must be formalized by public deed within the validity period, or be supported by a promise granted by public deed or a private instrument registered during that period.
- Exclusions: does not apply to transfers between related companies.
- Seller’s tax credit: The seller retains the right to use the construction tax credit against other VAT liabilities. A VAT refund is permitted for transactions carried out since the submission of the Presidential Message, provided that the VAT charged to the buyer is refunded.
2. New tax regime for DFL 2 leases
A new tax treatment is established for rental income from leases of properties covered by DFL 2 with an area of up to 90 m² (reducing the current limit of 140 m²).
Individuals
- The first two DFL 2 homes retain the current benefit regime without changes.
- Starting with the third home: rental income is subject to a flat tax of 5% on the gross rental amount,with no deductions allowed.
Legal entities
- Rental income from DFL 2 properties of up to 90 m² is subject to the same flat tax of 5% on the gross amount.
In both cases, the flat tax applies only to properties with a built area of up to 90 m².
3. Property tax exemption for seniors
- Benefit: 100% exemption from property tax.
- Requirements: owners aged 65 or older, regarding their primary residence (the property serving as their primary residence that matches their registered voting address).
- Mixed-use: applies to mixed-use properties provided that the residential area accounts for at least 50% of the total built area.
- Co-ownership: the exemption applies if all co-owners are individuals and the actual resident owns at least 50% of the property, or at least 25% if they acquired the home through inheritance from their spouse or civil partner.
- Surviving spouse: may retain the benefit for up to 3 years following the owner’s death.
- Effective date: as of January 1 of the year following the law’s publication.
- Affidavit: the taxpayer must file an affidavit with the SII. Penalties of 300% of the evaded tax and a 10-year disqualification are established in case of improper use.
Considerations for the sector and taxpayers
- The VAT exemption is a limited opportunity. It is recommended to identify housing stock with municipal approval available to take advantage of the benefit.
- The new 5% flat tax on DFL 2 rentals simplifies taxation for multi-property owners, although it entails a minimum tax without the possibility of deducting expenses.
- For senior homeowner, the tax exemption can represent significant savings: it is advisable to verify compliance with the requirements and file the affidavit with the SII in a timely manner.
- The anti-avoidance rule prevents property transfers between family members or related companies that are solely intended to obtain the benefit.
You can review the full bill here:
National Reconstruction Bill | Message No. 018-374 | April 22, 2026.
For more information, please contact our Tax team:
Andrea Bobadilla | Tax Group Director | abobadilla@az.cl
Catalina Rojas | Senior Associate | crojas@az.cl
Javiera Melo | Associate | jmelo@az.cl
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