Legal analysis · Tax Law

# Homes without VAT, no property tax after 65? What Chile's Reconstruction Law really changes for buyers, landlords and older homeowners

By [Gerardo Venegas Guzmán](https://rvsolucioneslegales.cl/en/team/gerardo-venegas-guzman/) September 03, 2026 22 min read

Chile's Reconstruction Law carries four measures that hit the property sector head-on: a VAT exemption on new homes, a 5% flat tax on rentals of so-called economic housing (DFL 2), the end of property tax on the main home of owners aged 65 and over, and a corporate tax cut. Their real scope, their requirements and their deadlines, separating the headline from the fine print.

## Key takeaways

- The bill (Bulletin No. 18,216-05) was approved by Congress on 4 August 2026, completed its legislative passage on 12 August with the executive's suppressive vetoes and its real estate measures came through the Constitutional Court challenges untouched, but as of 2 September 2026 it has not been enacted or published in the Diario Oficial, Chile's official gazette: it has no law number and none of its deadlines has started to run.
- The VAT exemption covers only the first sale of new homes that hold municipal final acceptance of works on the date the law is published, with deeds executed, or preliminary agreements signed, within 12 months counted from the first business day of the second month following that publication. It is optional for the seller, and the effective price reduction estimated by the Chilean Chamber of Construction runs from 2% to 7% of the price, not 19%.
- Rental income from the third and subsequent DFL 2 homes may be taxed under a 5% flat tax on gross rent, for units of up to 90 m² let to unrelated parties, with a minimum stay in the regime of five years, in force from 1 January 2027.
- The main home of persons 65 years of age or older will be 100% exempt from property tax, with no cap on assessed value, from 1 January of the year following publication. It is not automatic: it requires a sworn statement filed with the SII, a single property matching the owner's electoral address, and being current on property tax and municipal waste fees.
- First Category Tax, Chile's corporate income tax, falls from 27% to 25.5% in 2027, 24% in 2028 and 23% from 2029, with full reintegration of the system in that last year. The mortgage instalment subsidy for homes of up to 6,000 UF (Chile's inflation-indexed unit of account) is not part of this law: it is Law No. 21,836 (Ley N° 21.836), published on 17 August 2026.

It has been presented as “the law that removes VAT from homes”, and that phrase is the source of nearly every confusion now circulating among buyers, landlords and older homeowners. The Law for National Reconstruction and Economic and Social Development is an omnibus reform: it amends tax, labour, environmental, municipal and investment-promotion rules. For anyone buying, renting out, building or simply owning their home, what matters comes down to four measures, and none of the four says exactly what the headline says.

**Where the law stands today.** The bill (Bulletin No. 18,216-05) was [approved by Congress on 4 August 2026](https://tramitacion.senado.cl/appsenado/templates/tramitacion/index.php?boletin_ini=18216-05), and its legislative passage ended on 12 August, when the Senate [approved the executive’s three suppressive vetoes](https://www.senado.cl/comunicaciones/noticias/proyecto-de-reconstruccion-con-aprobacion-de-vetos-supresivos-camara-alta) (vetos supresivos, which strike provisions from the text). The Constitutional Court then ruled on the constitutional challenges filed against it: on 13 August it agreed to uphold the opposition’s challenges only in part (judgment dated 26 August) and on 25 August it [rejected the Government’s own challenge](https://www.biobiochile.cl/noticias/nacional/chile/2026/08/25/contundente-reves-para-el-gobierno-tc-rechaza-por-9-1-impugnacion-a-norma-de-servicios-basicos.shtml). The mandatory preventive review of the bill’s constitutional organic provisions is still pending, a separate step from the challenges that does not reach the real estate measures. As this article went to press, on 2 September 2026, it **had not been enacted or published in the Diario Oficial, Chile’s official gazette**: it has no law number and none of its benefits can be invoked yet. The Minister of Finance, Jorge Quiroz, [said on 28 August](https://www.latercera.com/pulso/noticia/quiroz-fija-como-plazo-para-promulgacion-de-la-megarreforma-la-primera-quincena-de-septiembre/) that he expects to enact it during the first half of September. Everything that follows is based on the text approved by Congress, not on a law in force, and every deadline mentioned runs from a publication that has not yet happened.

The wealth windows in this same law (disclosure of offshore assets, legacy FUR, STUT and FUT balances, and the gift tax cut) are covered in [Three windows, three clocks](https://rvsolucioneslegales.cl/en/publications/chile-reconstruction-law-wealth-windows/). Here we deal with housing.

## An omnibus reform with four real estate measures

1. **Temporary VAT exemption** on the first sale of new homes.
2. **5% flat tax** on rentals of so-called economic housing under Decree with Force of Law No. 2 of 1959 (DFL 2), from the third property onward.
3. **Full exemption from property tax (contribuciones)** on the main home of persons 65 years of age or older.
4. **Gradual cut in First Category Tax (Impuesto de Primera Categoría, Chile’s corporate income tax)**, from 27% to 23%, with reintegration of the tax system.

The Constitutional Court struck out some provisions of the bill: part of the tax stability statute for large investments, the compensation for judicial annulment of environmental approvals (resoluciones de calificación ambiental), certain aquaculture relocations and a sentence that restricted environmental claims by those who had not taken part in the public consultation. The executive’s three suppressive vetoes, for their part, removed from the text the ban on compound interest (anatocismo), the financial right to be forgotten and the restriction on payment terms beyond 30 days. **None of the four real estate measures was touched by the Court or by the vetoes.** They should reach the Diario Oficial exactly as Congress approved them.

## If you are buying a new home: temporary VAT exemption

### What the approved text says

The measure is a **transitional exemption, optional for the seller**, from the VAT that today applies to sales of new homes by developers and other habitual sellers. To qualify, the transaction must meet these conditions:

- Involve a **home intended for residential use**, with no cap on price, floor area or number of units.
- Be the **first sale** of the property. Transfers between related companies do not count as a first sale.
- The home must hold **final municipal acceptance of works (recepción municipal definitiva, the Chilean equivalent of a certificate of occupancy), total or partial, on the date the law is published**.
- The deed of sale must be signed **within 12 months** counted from the first business day of the second month following publication, or derive from a preliminary purchase agreement executed within that same period by public deed or by a notarially recorded private instrument.

**Parking spaces and storage units** are covered if they are sold together with the home and are included in the same municipal acceptance.

Excluded, in principle, are used homes, resales, land without construction, offices and commercial premises, homes built by their owner for their own use, and sales by private individuals that do not pay VAT today.

### Will prices drop by 19%?

Not necessarily, and this is where most of the public confusion lies.

Real estate VAT falls on the construction, not on the land, and developers already deduct the input VAT credit they bore while building. The Ministry of Finance itself, in its [presentation of the bill to the Senate](https://tramitacion.senado.cl/appsenado/index.php?mo=tramitacion&ac=getDocto&iddocto=25351&tipodoc=docto_comision), estimated an average price reduction of **6% to 7%**. The Chilean Chamber of Construction (Cámara Chilena de la Construcción, CChC), through its president, Alfredo Echavarría, [puts it between 2% and 7%](https://www.cooperativa.cl/noticias/pais/vivienda/exencion-del-iva-no-significara-una-rebaja-del-19-en-precio-de/2026-04-24/095404.html) depending on the project, considering that land can represent between 10% and 40% of total cost, and Felipe García, director of the consultancy Tinsa, [between 4% and 7%](https://www.biobiochile.cl/noticias/nacional/chile/2026/05/13/rebaja-del-iva-a-la-vivienda-no-convence-a-constructoras-y-gobierno-apuesta-por-ampliar-el-fogaes.shtml). The last two are private estimates.

In simple numbers: a home offered today at 100,000,000 Chilean pesos (CLP 100,000,000) would not drop to CLP 81,000,000. With an effect close to 5%, it would end up around CLP 95,000,000, **and only if the seller passes the benefit on to the buyer in full**, because the approved text neither requires it to do so nor provides any price control mechanism.

### What the seller keeps

The text protects the developer’s tax position: it preserves the right to use the input VAT credit borne on construction (offsetting it against other output VAT, or taking the remainder to cost or expense) and excludes these sales from the input VAT credit apportionment calculation. On the other hand, exempt sales do not carry the additional refund of the special credit for construction companies, something that builders selling directly should weigh before electing in. The Servicio de Impuestos Internos (SII), Chile’s tax authority, will issue a resolution with operating instructions, which **does not yet exist**: the SII itself has [announced](https://www.df.cl/economia-y-politica/df-tax/sii-define-la-cantidad-de-instrucciones-que-emitira-para-aplicar-la-ley-de) that the circulars and resolutions implementing the law will be released from the fourth quarter onward.

### If you have already signed a preliminary agreement or a deed

The approved text provides limited retroactivity for transactions predating entry into force: sales on which VAT was paid, executed by public deed **from 22 April 2026**, the date the bill was introduced, up to the first business day of the second month following publication, may qualify by way of a **refund**, which the seller requests from the SII **proving that it returned that amount to the buyer** who actually bore it. The transaction must meet the same requirements of municipal acceptance and first sale, and the deed must expressly record that the tax was paid and that the sale is claiming the benefit.

In practice, anyone holding a live preliminary purchase agreement should check three things:

- **How the price was agreed:** as a fixed final sum, as a net amount plus VAT, as a “VAT included” figure or with an adjustment clause for tax changes. A closed final price gives no automatic right to a reduction equal to the tax; it will depend on the wording of the contract.
- **When the final deed will be signed**, and whether that date can fall within the statutory window. The text also covers later deeds that derive from a preliminary agreement executed within the period, but not those deriving from a preliminary agreement signed before it if the deed is executed after the window has closed.
- **Whether the project holds municipal acceptance of works** on the date the law is published, a requirement without which the exemption does not apply.

## If you invest in rentals: 5% flat tax on DFL 2 homes

### The current regime

Since Law No. 20,455 (Ley N° 20.455) of 2010, the benefits of DFL 2 (among them, that rental income is not taxed) are limited to **two homes per natural person**, counting the two acquired earliest. From the third home onward, rents are brought into the owner’s ordinary taxation, the Impuesto Global Complementario, Chile’s progressive personal income tax. Legal entities are excluded from the benefit. Law No. 21,420 (Ley N° 21.420) closed the remaining exceptions: since 1 January 2023 the limit applies to all of a person’s economic homes, whatever their acquisition date and even if they were inherited.

### What is new

The approved text adds a special regime to DFL 2, a new Title II bis, for the **third and subsequent economic homes**:

- The first two homes keep their current treatment.
- Rental income from the third and subsequent homes may elect a **5% flat tax**.
- The tax applies to **gross rent, with no deductions at all**: no expenses, depreciation, property tax or losses are deducted.
- Each unit must have a floor area of **up to 90 m²**. Associated parking spaces and storage units are covered and do not count toward that limit.
- It applies only to leases with **unrelated parties**.
- The election is notified to the SII, requires an annual return on that income and a **minimum stay of five years**, counted as consecutive tax years. Once waived, it cannot be exercised again.
- It is incompatible with the VAT refund under Article 27 bis of Decree Law No. 825 (DL 825), Chile’s VAT law.
- **Legal entities** that own economic housing can also elect in, as can natural persons who have assigned such homes to their sole proprietorship (the latter only from the third home), provided their exclusive line of business is renting out or operating economic housing. A legal entity is not required to hold two homes first: the regime covers all of its economic homes of up to 90 m².
- It would apply from **1 January 2027**, or from the law’s entry into force if that comes later.

The text also provides a transitional window: those who acquire new economic homes of up to 140 m² within the 12 months following publication of the law may bring their rental income under the flat tax, subject to special rules. How it will operate in practice will depend on the SII’s instructions.

### When it pays off

Since the 5% is computed on gross rent, it pays off when the marginal rate the owner would pay under the Global Complementario on that income comfortably exceeds 5%. The current scale of the tax is as follows, with reference values computed with the UTA (unidad tributaria anual, the annual tax unit) of CLP 834,504 for Tax Year 2026, which are updated every year:

| Annual net income (UTA) | Approximate in pesos   | Marginal rate |
| ----------------------- | ---------------------- | ------------- |
| Up to 13.5              | up to 11.3 million     | Exempt        |
| Over 13.5 up to 30      | 11.3 to 25.0 million   | 4%            |
| Over 30 up to 50        | 25.0 to 41.7 million   | 8%            |
| Over 50 up to 70        | 41.7 to 58.4 million   | 13.5%         |
| Over 70 up to 90        | 58.4 to 75.1 million   | 23%           |
| Over 90 up to 120       | 75.1 to 100.1 million  | 30.4%         |
| Over 120 up to 310      | 100.1 to 258.7 million | 35%           |
| Over 310                | over 258.7 million     | 40%           |

**A simplified example.** A third home generating CLP 6,000,000 a year in rent would pay CLP 300,000 under the flat tax. If the owner already pays tax in the 23% bracket, adding that income to the Global Complementario would cost about CLP 1,380,000 before expenses and credits, and somewhat more if that income pushes the owner into the next bracket, at 30.4%. For a taxpayer who remains in the lower brackets, by contrast, the 5% on gross rent may be equal to or less favourable than the general regime, which does allow deducting expenses and using property tax as a credit. **The decision must be modelled case by case**, above all because entering the regime binds you for five years.

## If you are 65 years of age or older: full property tax exemption on your main home

### What the approved text says

A **100% exemption from property tax (impuesto territorial, known in Chile as contribuciones)** is created for the **main home** of natural persons **65 years of age or older**, understood as the property used mainly as a dwelling and occupied as the habitual residence. Its central features:

- **No cap on assessed value (avalúo fiscal)**, commercial value or floor area.
- **A single property anywhere in Chile**, which must match the electoral address registered with Servel, Chile’s electoral service.
- Includes **parking spaces and storage units** at the same address, even if they carry a separate tax roll number (rol de avalúo).
- Applies from **1 January of the year following publication of the law**: if published in 2026, from 1 January 2027.

### It is not automatic

The benefit requires a **sworn statement filed with the SII**, in the form and within the deadline the SII will set by resolution. That resolution has not been issued, so there is no form and no date yet. The SII will cross-check information with the Civil Registry, Servel and the Investigative Police (PDI) to verify age, ownership and actual residence. Servel itself [asked the Constitutional Court](https://puranoticia.pnt.cl/nacional/servel-recurre-al-tc-por-reforma-que-permite-al-sii-acceder-a-su-registro) to strike out the provision allowing the SII to access the electoral register, arguing that it undermines its autonomy; there is no record of the Court having ruled on that filing, and the electoral address requirement remains in the text.

In addition, to obtain and keep the exemption you must be **current on the previous year’s property tax and on municipal waste collection fees or charges**. Non-payment of waste fees can cause the benefit to be lost, although the SII must first serve the taxpayer with a formal notice (citación) before declaring it.

### Co-ownership and inheritance

In homes with several owners, the exemption operates if **all co-owners are natural persons**, at least one of them **actually resides** in the property and the beneficiary holds **at least 50% of the ownership rights**. Anyone who acquired their share **by succession from a spouse or civil partner** can qualify with at least **25%**. If the holder dies and the home remains in the estate without being allocated to an heir, the estate may invoke the benefit for up to three years from the death, or until the home is sold if that happens first. If the surviving spouse or civil partner is among the heirs, is 65 years of age or older and actually lives there, the exemption continues until their death or until the sale.

There is also an anti-abuse rule: the exemption does not apply to properties acquired from related persons (spouse, civil partner, relatives up to the second degree, or companies and co-ownerships in which the taxpayer holds 10% or more) within the three years preceding the sworn statement, unless the SII recognises by resolution that the transfer was made for reasons other than purely tax ones.

### Mixed use

A house with an attached shop, practice or workshop can keep the full exemption if **at least 50% of the built floor area** is used as a dwelling and the owner actually resides there.

### Penalties

Anyone who obtains the benefit through a maliciously false statement or by simulating residence faces a **fine of 300% of the tax evaded** and is **barred for 10 years** from applying again.

### How it differs from the existing benefit

|                | Current benefit                                    | New exemption                               |
| -------------- | -------------------------------------------------- | ------------------------------------------- |
| Age            | Women aged 60 and over, men aged 65 years and over | Persons aged 65 years and over              |
| Amount         | 50% or 100% reduction                              | 100% exemption                              |
| Income         | Limits of 13.5 UTA (100%) and 30 UTA (50%)         | No income limit                             |
| Assessed value | Individual and aggregate assessed value limits     | No cap on assessed value                    |
| Procedure      | Generally automatic                                | Sworn statement and designation of the home |

According to [Ministry of Finance figures from January 2026](https://www.hacienda.cl/noticias-y-eventos/noticias/camara-aprueba-y-despacha-al-senado-proyecto-que-otorga-nuevos-beneficios), there are 1,540,827 older adults in Chile who own a home; 1,144,354 of them (74%) are already exempt from property tax and 396,473 (26%) own taxable properties. It is this last group, owners who pay today because their assessed values or income exceed the current limits, that the new exemption mainly targets.

Because property tax funds both the Municipal Common Fund (Fondo Común Municipal) and the municipalities themselves, the joint committee of both chambers (Comisión Mixta) approved, the Chamber of Deputies ratified on 22 July and the Senate on 4 August, [fiscal compensation for 100%](https://www.senado.cl/comunicaciones/noticias/reconstruccion-nacional-respaldan-formula-de-compensacion-los-municipios) of the revenue they will forgo, in the Common Fund and in each municipality’s own income alike, calculated every year by the SII and paid by the Treasury. To receive it, municipalities must be up to date with the information they report to the Budget Directorate and cut their permit processing times by at least 30%. The tax does not disappear in economic terms: it changes payer, from the homeowner to the national Treasury (Fisco).

## If you own a real estate developer, construction company or investment vehicle

### First Category Tax cut and reintegration

| Commercial year | General regime rate | Credit restitution on distributing profits |
| --------------- | ------------------- | ------------------------------------------ |
| 2026            | 27%                 | Current regime                             |
| 2027            | 25.5%               | 30%                                        |
| 2028            | 24%                 | 20%                                        |
| From 2029       | 23%                 | 0% (full integration)                      |

The cut benefits real estate, construction and investment companies under the general regime, and progressive reintegration (the tax paid by the company once again counts in full as a credit against the shareholder’s own tax, without the partial clawback of that credit that the current semi-integrated regime requires) reduces the combined company-shareholder burden on withdrawing profits. Small and medium-sized enterprises under the Pro Pyme regime keep the transitional rates of Law No. 21,755 (Ley N° 21.755), 12.5% in 2026 and 2027 and 15% in 2028, and from commercial year 2029 their permanent rate falls from 25% to 23%. A company with tax losses does not immediately capture the benefit of the lower rate; for it, managing the input VAT credit on VAT-exempt sales may weigh more.

### Other measures that affect you

- **Permits:** the law shortens from two years to one the period for invalidating sectoral authorisations (Law No. 21,770 ([Ley N° 21.770](https://www.bcn.cl/leychile/navegar?idNorma=1216930))), cuts environmental claim deadlines to 30 days and caps at six months the precautionary measures that suspend projects. The faster building permits and municipal works departments that have been reported do not come from this law but from Law No. 21,718 (Ley N° 21.718) and Law No. 21,826 (Ley N° 21.826), the latter published on 24 June 2026.
- **Tax stability (invariabilidad tributaria)** for large investment projects: it survived the Constitutional Court in its essentials, on the casting vote of the Court’s president after a five-to-five tie, with staggered terms depending on the amount invested (10, 15 or 20 years) and a premium of 1.5 points over the general First Category Tax rate. The Finance Ministry’s power to extend those terms and the extension of the statute to “related projects” were struck out.
- **Disaster zones:** a CLP 400 billion expansion of the Transitional Emergency Fund for Fires, to CLP 1.2 trillion, in force until December 2028 and extended to Ñuble and Biobío, and free reconnection of electricity, gas and water for households and micro, small and medium-sized businesses after a disaster. The latter survived the Government’s own challenge, which the Constitutional Court rejected on 25 August.

## Key dates if the law is published in September 2026

| Measure                                           | Effective                                                                                                                    | Note                                         |
| ------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- |
| VAT exemption on new homes                        | 12 months from the first business day of the second month following publication: from 2 November 2026 to early November 2027 | Recalculated with the exact publication date |
| VAT refund on sales predating entry into force    | Deeds executed from 22 April 2026 up to the first business day of the second month following publication                     | Requires an SII resolution                   |
| 5% flat tax on DFL 2 homes                        | 1 January 2027                                                                                                               | Election with a five-year stay               |
| Property tax exemption for those aged 65 and over | 1 January 2027                                                                                                               | Requires a prior sworn statement to the SII  |
| First Category Tax                                | 25.5% in 2027, 24% in 2028 and 23% from 2029                                                                                 | Gradual reintegration                        |

If publication slips to October, the VAT window does not run from November but from December 2026, and so on: the date in the Diario Oficial is the only missing piece of data and the only one on which the entire calendar depends.

## Five things the reform does not do

1. **It does not cut home prices by 19%.** The effect estimated by the industry body runs from 2% to 7%, and depends on the seller passing the benefit on.
2. **It does not remove VAT from every sale.** Only from the first sale of new homes with municipal acceptance of works, within a 12-month window. Nor does it carry a price cap: the 4,000 UF limit circulating on some commercial websites belongs to the mortgage subsidy (whose cap is now 6,000 UF), not to the exemption.
3. **It does not automatically exempt everyone aged 65 and over from property tax.** It requires a sworn statement, a single home, actual residence and being current on waste fees and property tax.
4. **It does not include the mortgage instalment subsidy (subsidio al dividendo).** That benefit belongs to another law, Law No. 21,836 (Ley N° 21.836), published in the Diario Oficial on 17 August 2026, which expands the mortgage rate subsidy of Law No. 21,748 (Ley N° 21.748) to homes of up to 6,000 UF.
5. **It is not in force yet.** Until it is published in the Diario Oficial, no deadline has started to run.

## The market the law lands in

According to the CChC, as of 30 June 2026 the stock of new homes available for sale stood at around [99,600 units](https://www.latercera.com/pulso/noticia/ampliacion-del-subsidio-al-credito-hipotecario-cubre-un-tercio-del-stock-disponible-de-viviendas-de-hasta-6000-uf/) nationwide, and 88% of them are priced at up to 6,000 UF; the industry body’s president, Alfredo Echavarría, has described the situation as [the worst crisis in private housing](https://www.biobiochile.cl/noticias/economia/actualidad-economica/2026/08/13/cchc-celebra-extension-del-subsidio-a-la-tasa-ante-la-peor-crisis-que-atraviesa-la-vivienda-privada.shtml) on record. Average mortgage rates hovered around 4% in July 2026 and, combining the mortgage rate subsidy with the FOGAES state guarantee, in August some banks went as far as offering rates of around 3.3% in UF for a first home of up to 4,000 UF, in one-off offers for a limited time.

In La Araucanía the picture has its own profile. According to the CChC, in mid-2026 Temuco had [2,563 new homes available at up to 6,000 UF](https://www.tinsa.cl/sala-de-prensa/cchc-destaca-oportunidades-para-el-mercado-temuco-tiene-2-mil-563-viviendas-disponibles-hasta-6-mil-uf/), 749 of them in the 4,000 to 6,000 UF tranche that the mortgage rate subsidy has just brought in, [more than any other municipality outside the Santiago Metropolitan Region](https://www.latercera.com/pulso/noticia/extension-del-subsidio-a-la-tasa-hipotecaria-mas-de-la-mitad-del-stock-de-viviendas-disponible-en-el-nuevo-tramo-esta-en-regiones/) (San Pedro de la Paz has 624 and Concepción 596), and there is meaningful stock in Pucón and Villarrica in that same range. The CChC Araucanía holds that the expanded subsidy and FOGAES, besides making purchases easier, would help reduce that stock and revive projects in a region with a [housing deficit of 46,733 households](https://araucanianoticias.cl/2026/cchc-araucana-plantea-priorizar-inversin-habitacional-ante-recorte-de-subsidios-y-su-impacto-en-las-familias-de-la-regin/0521307372). On the VAT exemption, the regional industry voice on record is that of the CChC Concepción: its president, Jorge Coloma, [said](https://www.df.cl/regiones/biobio/mercados/cchc-concepcion-pide-al-ejecutivo-extension-de-subsidio-a-la-tasa) that it points in the right direction but that its impact in the Biobío region is very limited, and asked that the mortgage rate subsidy be prioritised. In Greater Concepción, the Finco 2026 fair showed in June [6,870 homes from 120 projects](https://www.diarioconcepcion.cl/economia/2026/06/09/finco-2026-inmobiliarias-7-mil-viviendas-gran-concepcion.html), three quarters of them between 2,000 and 4,000 UF, and according to Tinsa the stock would take about 14 months to clear at the sales pace of February to April 2026. The combination of VAT exemption, mortgage instalment subsidy and FOGAES is what can actually bring a purchase within reach of a family that today falls short of the income the bank requires.

## What to do now

- **If you are buying:** do not accept increases to the base price “because of the VAT” before the law is published, and do not sign addenda without first reviewing your price clause. Ask that the preliminary agreement or the deed expressly regulate what happens with the tax if the transaction falls within the window, and that the deed expressly record that the sale is claiming the exemption.
- **If you hold a live preliminary agreement:** review the price clause and the projected deed date, and confirm that the project holds municipal acceptance of works.
- **If you invest in rentals:** identify which units meet the 90 m² limit and the residential use, and project your tax burden with and without the flat tax before electing.
- **If you are 65 years of age or older:** check that your electoral address matches the home where you live, settle any outstanding waste fee or property tax debts, and watch for the SII resolution that will set the format and deadline for the sworn statement.
- **If you are a company:** plan ahead the deed-signing calendar for stock that already holds acceptance of works, the treatment of the input VAT credit and the effect of the First Category Tax cut on your profit distribution policy.

In tax matters, signing one day earlier or one day later than the right date can be the difference between securing the benefit and unwittingly financing the VAT for the Treasury.

---

This article is general information and does not constitute legal or tax advice on any specific matter. As of 2 September 2026, the Law for National Reconstruction and Economic and Social Development (Bulletin No. 18,216-05) has not been enacted or published in the Diario Oficial, so it has no law number and its deadlines have not started to run. The dates, amounts and percentages given are based on the text approved by Congress and on public information, and may change with official publication and with the circulars and resolutions issued by the Servicio de Impuestos Internos. If you want to review how the reform affects you, whether the drafting of your preliminary purchase agreement, the structure of your rental investment, the protection of your main home or your company’s planning, [get in touch](https://rvsolucioneslegales.cl/en/contact/).

## Frequently asked questions

**Can I already buy a home without VAT?**

No. As of 2 September 2026 the law has not been published in the Diario Oficial and its deadlines have not started to run. The exemption applies to deeds signed within 12 months counted from the first business day of the second month following publication, and only if the seller elects to use it.

**Which homes qualify for the VAT exemption?**

New homes intended for residential use, on their first sale, holding final municipal acceptance of works, total or partial, on the date the law is published and deeded within the 12-month window, or covered by a preliminary purchase agreement executed within it. There is no price or floor-area cap. Parking spaces and storage units are covered if they are sold together with the home and are included in the same municipal acceptance.

**I have already signed the deed and paid VAT. Do I get it back?**

You may, if the sale was executed by public deed from 22 April 2026 onward and before the exemption takes effect: the seller requests the refund from the SII, proving that it returned the tax to you, and the deed must expressly state that VAT was paid and that the transaction is claiming the benefit. The exact procedure will depend on the resolution the SII issues, which does not yet exist. If you have only signed the preliminary purchase agreement (promesa de compraventa) and the deed is still pending, your case is not the refund but the exemption itself: the sale can be exempt if the deed is executed within the window and the seller elects to use it.

**Is the seller required to lower the price?**

No. The exemption is optional for the seller, and the approved text provides neither price controls nor any mechanism forcing the benefit to be passed on. The actual reduction will depend on negotiation and on how the price clause of your preliminary agreement or deed is drafted.

**What is the 5% flat tax under DFL 2?**

It taxes at a rate of 5% the gross rental income, with no deductions at all, of economic housing of up to 90 m² from the same owner's third property onward, provided the units are let to unrelated persons. The election is notified to the SII, requires a minimum stay of five years and would apply from 1 January 2027.

**Am I better off with the 5% or with the Global Complementario (personal income tax)?**

It depends on your bracket. The 5% on gross rent tends to be favourable when the marginal rate you would pay under the Global Complementario on that income comfortably exceeds 5%; in the lower brackets it may not be, because the general regime does allow you to deduct expenses and use property tax as a credit. That is a rule of thumb, not a rule: the break-even point depends on each home's expenses and property tax. Model your case before electing: the regime binds you for five years.

**I am 65 years old. Do I stop paying property tax in 2027?**

Only if you file the sworn statement with the SII, designate a single main home where you actually live, which must also match your electoral address, and are current on the previous year's property tax and on municipal waste collection fees. The exemption applies from 1 January of the year following publication of the law.

**My house is owned by several siblings. Does it still apply?**

It applies if all co-owners are natural persons, at least one of them lives in the house and the beneficiary holds at least 50% of the ownership rights. Anyone who acquired their share by succession from a spouse or civil partner qualifies with at least 25%.

**I live in the house and run a business at the front. Do I lose the exemption?**

No, if at least half of the built floor area is used as a dwelling and you actually reside in the property. In that case the exemption covers the entire property.

**What happens if I declare a home I do not live in?**

Anyone who obtains the benefit through a maliciously false statement or by simulating residence faces a fine of 300% of the tax evaded and is barred for 10 years from applying again.

**Is the mortgage instalment subsidy for homes of up to 6,000 UF part of this law?**

No. It is Law No. 21,836 (Ley N° 21.836), published in the Diario Oficial on 17 August 2026, which extends and expands the mortgage rate subsidy created by Law No. 21,748 (Ley N° 21.748): raises the number of subsidies from 50,000 to 80,000, lifts the home price cap from 4,000 to 6,000 UF and extends the scheme until 31 May 2028. Nothing in the approved text prevents combining it with the VAT exemption once the latter takes effect.

**Where can I confirm whether the law has been published?**

In the Diario Oficial, Chile's official gazette (diariooficial.interior.gob.cl), and in Ley Chile, the statute repository of the Library of the National Congress (bcn.cl/leychile), where it will appear with its final number and publication date. Until that day, none of the law's deadlines has started to run.

This analysis was originally published in Spanish. [Read the Spanish version →](https://rvsolucioneslegales.cl/publicaciones/reforma-inmobiliaria-iva-vivienda-contribuciones/)

Have a related matter? Explore our [Tax Debt Prescription →](https://rvsolucioneslegales.cl/en/practice-areas/tax-debt-prescription/) practice

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Source: <https://rvsolucioneslegales.cl/en/publications/chile-reconstruction-law-housing-vat-property-tax/>

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