Zero VAT on new homes in Chile: when it starts, which homes qualify and why the saving is not 19 per cent

Short answer: as of late September 2026 the VAT discount on new homes in Chile is not yet in force, because the law containing it has not been published. Congress passed the bill on 4 August 2026 and it has been with the Constitutional Court since 13 August. Once published, the exemption will last one year counted from the first business day of the second month after publication. It only covers homes with final municipal approval dated before publication, on their first sale, with no price cap. It is optional for the seller, and sales deeded from 22 April 2026 can also benefit, through a VAT refund.

Exactly where it stands

The exemption is in a transitional article of the bill for national reconstruction and economic and social development, bulletin 18.216-05, known in Chile as the mega reform. These are the milestones:

The practical consequence is clear: today nobody can sell you a home with zero VAT as if the benefit were in force. If you are offered the discount as a fact, or pressed to sign quickly to secure it, ask for a written explanation of how it will be applied.

When the discount starts

The text passed by Congress says the exemption applies for one year counted from the first business day of the second month after the month in which the law is published. It is not the following month but the one after that. For example, if the law were published in October 2026, the window would open on the first business day of December 2026 and close a year later.

Within that year, what has to happen is the deed of sale, or a promise to purchase executed as a public deed or as a private document filed with a notary. A promise signed within the window counts even if the final deed is signed later. To benefit, the deed of sale must expressly mention the exemption. You can work out those dates with our deadline calculator.

Which homes qualify

The article sets four requirements, and all of them must be met:

• It must be a home, regardless of its value, floor area or number of units. There is no cap in UF and no requirement that it be the buyer's first home.
• It must be the first sale after final municipal approval. Resales between private individuals and sales between related companies are excluded.
• The home must have final municipal approval (recepción definitiva) dated before the law is published. The seller proves it with the final approval certificate from the municipal Works Department, which must show a date before publication.
• The deed or the promise must be signed within the one-year window described above.

The consequence that matters most: only finished homes

The final approval requirement completely changes who this benefit helps. A building permit is not enough, nor is a project under construction: the home has to be finished and approved by the municipal Works Department before the law is published.

That leaves out, in principle, off-plan apartments and houses that will receive their final approval after publication. If you are offered a unit under construction with a promise of zero VAT, ask which part of the law that relies on. What does qualify is the stock of new, finished homes that developers have not yet sold. Before signing anything, ask to see the certificate itself, not a description of it.

Final approval is also what allows a home to be deeded and financed. A unit without it cannot be deeded or financed, as we explain in selling a house without final municipal approval, and what it costs to obtain is covered in the cost of final municipal approval.

Purchases already deeded since April 2026

The article has a rule for sales made while the bill was going through Congress. Sales executed by public deed between the date the bill was filed, 22 April 2026, and the first business day of the second month after publication can also benefit, provided they meet the other requirements and VAT was paid on the sale.

In that case it is the seller who requests the refund from the Chilean tax authority under Article 126 of the Tax Code, and only after returning to the buyer the VAT charged. The refund equals the amount actually returned. If you bought a finished new home from 22 April onwards, ask the developer whether it plans to opt in once the law is published.

It is optional: the seller decides

The text says taxpayers may opt for the exemption. It is not automatic. The developer chooses whether to sell with or without VAT, and may have reasons not to opt in: when a sale is exempt, the VAT the company paid on materials, subcontractors and services can no longer be recovered as a tax credit and becomes a cost.

That is why what you should ask for is the final price in writing under both scenarios, for the same unit and on the same date, rather than a vague promise of a discount.

Why the saving is not 19 per cent

This is the part to understand before calculating anything, and there are two separate reasons that add up.

First: the land was never taxed the same way. On the sale of a built property, VAT does not apply to the value of the land in the same way as to the construction. In projects where land weighs heavily, which is normal in established neighbourhoods, the base on which that 19 per cent is calculated is well below the list price.

Second: the company loses its tax credit. As explained, if the sale is exempt, the VAT the company paid during construction becomes a cost, and that cost tends to be passed on in the price.

Put simply: the effective discount ends up being a fraction of 19 per cent. The only serious way to know how much it is in your case is to compare the two prices in writing. Any calculation applying 19 per cent to the list price is an exaggeration.

The builders' special credit ends in 2027

A different tax change, which is already law, also affects the price of new homes. The special credit for construction companies, which historically reduced VAT on home sales, has been reduced by law and will be eliminated from 1 January 2027, according to the tax authority's instructions. The mega reform does not change it.

For buyers, the practical reading is that the tax conditions for new homes will change over the coming months from two different directions, so it is worth comparing dated prices in writing rather than deciding on the strength of a headline.

What the discount does not fix

A temporary exemption moves the price by a percentage, but the factors that really decide whether a purchase goes well are the usual ones. The mortgage rate weighs more over twenty or thirty years than a one-off saving. If you will finance with a state guarantee, the conditions and caps are in the FOGAES guide, and if your loan or promise is in UF, read how the UF and CPI adjustments work.

The legal state of the unit weighs even more: project mortgages not yet lifted, differences between what was built and what was approved, or condominium bylaws nobody read. We cover them in the checks to make before you wire the money and in condominium bylaws. Zero VAT is a reason to speed up a decision already made, not to make one that was not.

What to check before signing a promise to purchase

• The unit's final approval certificate, with its number and date. If the date is not before the law's publication, the unit does not qualify.
• A written commitment from the developer to opt in, and a clause stating what happens to the price if it does not.
• The price with and without the benefit, for the same unit and on the same date.
• That the promise is executed as a public deed or as a private document filed with a notary within the window, because that is what the text requires for it to count.
• The title review, including the project's mortgages and prohibitions that must be lifted when the deed is signed.
• The condominium bylaws, if it is a condominium, and the fines it can impose.

Documents worth requesting from the developer

Besides the promise itself, it is worth requesting some documents in writing before committing a deposit. Asking for them is not distrust: it is the minimum needed to verify later what you were offered.

• A copy of the final approval certificate for the unit or the building, with its number and date.
• The price comparison in writing, with and without the exemption, for the same unit and on the same date.
• The certificate of mortgages and encumbrances for the project or the specific unit, to know what must be lifted at the deed.
• The current condominium bylaws, which will govern your life in the building.
• The developer's statement on whether it will opt in to the exemption and when it plans to sign the deed.

How we work on these purchases

What we do on these purchases is what the discount does not replace: we review the project's title, the final approval, the mortgages and prohibitions that must be lifted and the condominium bylaws, through our title review service. On the benefit itself, the useful work is drafting: making sure the price, the decision to opt in and the consequences of not doing so are written into the promise. If the transaction is in UF, you can check today's values in our economic indicators and work out adjustments with the CPI calculator.

Other tax measures linked to housing and families are covered in the gift tax cut and in property tax for older adults. We will update this article when the law is published.

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