Zero VAT on new homes for 12 months: how it would work and what to check before buying
- How it would operate in practice: The discount is not automatic
- Legal review checklist: A lower price does not replace security
- Agility of sector permits and regional benefits
- Frequently Asked Questions (FAQ)
- ↳ When would the VAT exemption take effect?
- ↳ Does this franchise apply to used homes?
- ↳ Is the real estate company obliged to pass the 19% discount to me?
- ↳ What should I legally review before signing a promise?
By Julián Aranda Rojas (law graduate) and Rolando García Contreras (attorney)
On July 16, 2026, the Senate approved a measure that promises to shake up the national real estate market: the temporary and optional exemption of the 19% Value Added Tax (VAT or IVA) on the sale of new homes. This initiative, a pillar of the "Megareform" to reactivate construction, aims to ease the financial burden for thousands of Chileans dreaming of owning a home. Although it is not yet law, the Executive estimates that this 12-month franchise could translate into a final price reduction of between 10% and 15% (according to reports by t13.cl in March and April 2026).
How it would operate in practice: The discount is not automatic
Here lies the central angle and the greatest confusion of the bill: the VAT exemption would be optional for real estate developers. This means that the construction or development company will have the power to apply for this franchise and not charge VAT on the final price. However, the effective transfer of this "saving" to the final consumer will depend on the commercial policy of each project. As a buyer, your duty will be to verify whether the list price already reflects this discount or whether the real estate company has adjusted its margins, absorbing part of the benefit.
Legal review checklist: A lower price does not replace security
A discount of up to 15% is extremely attractive, but it should never blind you to the risks of real estate investment. Buying a home, whether as a resident or if you are planning to buy property in Chile as a foreigner, requires maximum diligence. Always review the following before signing the promise of sale:
- Final Reception (Recepción Definitiva): Make sure the project has final reception or is about to obtain it. A house without it is not eligible for a mortgage. Learn more about selling houses without final reception and how much regularization costs.
- Title Study (Estudio de Títulos): It is vital to check that the real estate company that owns the land has no embargoes or prohibitions to alienate. Hire our title study service to operate with total peace of mind.
- Terms of the Promise: Carefully review the penalty and withdrawal clauses in the promise of sale. Do not sign without advice if you have doubts. Learn how to avoid real estate scams.
- Tax Impact: If you are a foreigner, review your tax profile with our guide to property taxes for foreigners.
Agility of sector permits and regional benefits
The megareform does not only attack the price via taxes. As detailed by latercera.com, one of its structural axes is to untangle "permisología" (excessive red tape). Measures have been promised to accelerate municipal and sector management permits, which would radically reduce the development times of new housing projects.
With a profound social focus, the reform also ensures the financing and construction of more than 4,000 homes destined entirely for families affected by the tragic fires in Valparaíso, Ñuble, and Biobío, injecting a critical economic repair and reactivation component for our southern regions.