National Reconstruction Bill: Tax Measures for the Real Estate Sector.

On April 22, 2026, the Chilean Government submitted the National Reconstruction and Economic and Social Development Bill (Message N°018-374) to Congress. As of June 2, 2026, the bill is before the Senate after having been approved by the Chamber of Deputies.

The bill addresses multiple measures designed to stimulate the Chilean economy. One of its key areas focuses on the real estate sector.

The following are the tax measures related to the real estate sector. The bill also includes administrative measures —separate from the tax ones— aimed at expediting real estate development.

1. Temporary VAT Exemption on Sales of New Housing Units for a Period of 12 Months

1.1. Scope of the exemption

The bill proposes eliminating VAT on the sale of new residential units for a transitional 12-month period, starting the month following the law's publication. The measure is designed to stimulate sales of completed new housing stock existing at the publication date.

For the exemption to apply, the following requirements must be met:

• The property sold must be a residential unit (built and intended for habitation). Parking spaces and/or storage units may also qualify.
• The sale must be the first sale of the unit.
• The unit must have received final construction approval (recepción definitiva) from the competent municipal authority by the publication date.
• The sale must be formalized by public deed within one year, or supported by a promise of sale within the same period, either by public deed or notarized private instrument.

1.2. Input VAT (crédito fiscal) treatment

Although these sales would be VAT-exempt, the seller retains the right to use input VAT incurred during construction or acquisition against other taxable sales. Any remaining input VAT credit may be treated as an additional cost basis for the units, as an expense, or applied to future taxable sales after the 12-month period ends.

1.3. Retroactive application

To avoid market distortion caused by buyers waiting for the law to take effect, the bill includes a transitional provision allowing real estate developers to recover VAT incurred on sales executed during the bill's legislative process and up to the month following its publication, provided they pass the economic benefit on to the buyer.

The eligible property universe must meet requirements a), b), and c) above. Additionally, the sale must expressly state that, should the bill pass, the VAT paid will be refunded to the buyer.

The actual price reduction may not equal the full 19% VAT rate, as it depends on each project's cost structure and the treatment of input VAT during construction. According to the Chilean Chamber of Construction, the actual impact on final prices is estimated at approximately 2% to 7%.

2. New Taxation on Rental Income from DFL2 Housing Units up to 90 Square Meters

2.1. The benefit

Housing units covered by Decree-Law No. 2 of 1959 (DFL2), with usable area up to 90 square meters, may be taxed under a flat 5% rate on gross rental income or other forms of exploitation under contract. Associated parking spaces and storage units are also covered.

Taxpayers opting for this alternative system are not entitled to deduct any expenses from the income.

Sale or transfer of these properties falls outside this regime, which applies exclusively to operating income generated by the property for its owner.

Both new and existing units owned by the taxpayer may qualify, as the relevant factor is whether the unit meets the stated requirements.

2.2. Eligible taxpayers

Unlike current DFL2 rules, the bill extends eligibility beyond natural persons to include sole proprietors and certain legal entities:

• Natural persons: the 5% rate applies from the third qualifying unit onward. Rental income from the first two DFL2 units may continue to be tax-exempt as under current law. A natural person with formal accounting (sole proprietor) is treated as a legal entity for these purposes.
• Legal entities and individual entrepreneurs: legal entities whose exclusive business is renting affordable housing units up to 90 m² may apply the 5% rate to all qualifying units. Individual entrepreneurs may also apply the 5% rate from the third qualifying unit onward.

3. New Full Property Tax Exemption on Primary Residence for Property Owners Aged 65 and Over

3.1. Description of the benefit

The bill introduces a full property tax (Impuesto Territorial) exemption on the primary residence of property owners who are natural persons aged 65 or over. The bill does not restrict which properties may qualify, though reports indicate the Senate may amend it to limit eligibility to properties valued below CLP $500,000,000; no formal amendment has been submitted to date.

The primary residence is defined as the property predominantly used for habitation, which must constitute the owner's habitual residence and correspond to their electoral domicile. Only one property may be designated as the primary residence, via sworn declaration.

Parking spaces and storage units at the same address and intended for residential use are also covered by the exemption.

3.2. Special cases

The proposed rule also addresses the following specific situations:

• Co-ownership: all co-owners must be natural persons; the beneficiary aged 65+ must own at least 50% of the property and reside in it. Persons who have inherited at least a 25% share from a deceased spouse or civil partner may also claim the benefit.
• Mixed-use properties: the exemption applies as long as the residential portion represents at least 50% of the total built area and is effectively inhabited by its owner.
• Death of the property owner: the exemption is maintained for the surviving spouse or civil partner, or for the estate while the property remains unadjudicated, for up to three years from the date of death, or until the property is transferred if that occurs sooner.
• Acquisition from a related party: the exemption does not apply if the owner acquired the property from a related party within the three years prior to claiming the benefit, unless the owner demonstrates the acquisition had a purpose other than obtaining the exemption. Related parties include spouses, civil partners, ascendants and descendants up to the second degree of consanguinity, and entities in which the beneficiary or any of the above holds a direct or indirect interest of 10% or more.

3.3. Loss of the exemption

The taxpayer loses the exemption if the SII determines that they do not habitually reside in the property, that the property is not their primary residence, that the condition was simulated, or that the benefit was claimed on more than one property simultaneously.

The SII may request information from public institutions, particularly the Electoral Service, the Civil Registry and Identification Service, and the Investigative Police.

If non-compliance is found, the SII will issue a reasoned resolution and the corresponding tax assessments, along with monetary fines.

3.4. Entry into force

The exemption takes effect on January 1 of the year following the law's publication.

4. Real Estate Treatment in the Transitional Gift Tax Reduction

The bill introduces a transitional 50% reduction in the gift tax, applicable once, to donations made by public deed within 12 months of the month following the law's publication. Such donations may include real estate or equity interests in companies that own real estate.

The bill does not change the valuation method for real estate for gift tax purposes. As a general rule, donated properties are valued at their official cadastral value (avalúo fiscal) in effect during the semester of the donation. The same rule applies when what is donated are interests in partnerships or individual limited liability companies (EIRL) that hold real estate, without prejudice to the valuation of other assets and liabilities that determine the total value of the donated interests.

As an exception, the cadastral value rule does not apply to real estate acquired within the three prior years whose acquisition cost exceeds the cadastral value; in such cases, the inflation-adjusted acquisition cost is used, provided it reflects market value.

Finally, the bill simplifies the donation procedure by replacing the judicial authorization requirement (insinuación) with a sworn declaration before the SII.