Chile's 0% VAT on New Homes: What the Bill Says and Who It Helps in Aysen

In March 2026, three letters started to sound like a magic discount in Chile: IVA 0%. The idea of buying a brand-new home without the 19% tax spread fast, and with it a wave of questions and myths. This guide separates what the bill actually says from what the headlines claim, with the official sources in plain view, and answers the question that really matters to anyone eyeing Patagonian property: does this help me?

A note up front: this is a general explanation of a bill still in Congress, not tax advice for your specific purchase. Until the law is published in the Diario Oficial, every detail can still change.

What exactly is the new-home VAT exemption?

It is a temporary and optional removal of VAT on the first sale of new homes, for 12 months, inside the National Reconstruction bill. Announced by President Kast in mid-March 2026, it drops the rate from 19% to 0% while the benefit is in force.

The Finance Ministry laid out the economics. In its own statement, Hacienda confirms that “VAT on home sales will be eliminated for 12 months” as part of the reconstruction plan. The government frames it as a transitory and optional VAT exemption on the sale of new homes, not a permanent elimination of the tax.

The word “optional” is the first piece of fine print almost nobody read. The exemption is optional for the selling taxpayer, meaning the developer. The buyer has no automatic right to buy VAT-free: it depends on the company choosing to apply the benefit to that transaction.

Why is the government proposing this now?

The government says a large stock of unsold new homes coexists with a huge housing deficit, and the 0% rate is meant to unstick those transactions. It is a reactivation measure, not a demand subsidy.

The figures come from the government itself: per Hacienda, there are now 100,000 new homes that cannot find a buyer, alongside a quantitative housing deficit of 500,000 units. Coverage by Radio y Diario Universidad de Chile on the details of the economic plan repeats both numbers and sums up the official bet: that a 0% rate speeds up transactions and helps clear that inventory. These are government estimates, not an independently audited count.

Which properties qualify, and which are left out?

Only the first sale of a new home that already has municipal reception (final or partial) granted before the law is published qualifies. Storage units and parking spaces count only when sold in the same transaction as the home. Everything else is excluded.

The government sums it up this way: the measure applies to homes with final or partial reception, including storage units and parking spaces if sold in the same act. Chilean outlet T13 adds the practical angle: these are new homes that already hold municipal reception (full or partial) at the moment the law is published. And a reading of the bill text by the law firm Fontaine y Cía. adds the strictest condition: it must be the first transfer of a new property with final or partial reception granted by the municipal works office, and transfers between related companies do not count as a first sale.

The practical effect is a list of exclusions that hits the Patagonian market squarely:

• Used houses and apartments: do not qualify. Resale between private parties generates no VAT, so there is no VAT to exempt.
• Projects that receive municipal reception after the law is published: left out, even if newly built.
• Private-party sales: outside the benefit.
• Farms, plots, and raw land: land sits outside the VAT base, so on properties whose value is mostly land, the benefit thins out or disappears.

Is it true there is a 4,000 UF cap?

No. The bill as drafted has no UF cap: the exemption applies regardless of the value, surface area, or number of units in the project. The 4,000 UF limit that keeps circulating belongs to a different benefit.

The reading of the bill by Fontaine y Cía. confirms it applies “regardless of the value, surface area, or number of units the real estate project contemplates”. Neither Hacienda, nor the government, nor the T13 explainer on how the exemption works mentions a price ceiling. The 4,000 UF figure corresponds to the rate or dividend subsidy, a mortgage-financing support that is part of the same package but a separate measure from the VAT exemption.

When does the 12-month window start and how long does it last?

The window lasts 12 months, counted from the first business day of the second month after the law is published in the Diario Oficial. Because the law is not published yet, the exact calendar dates do not exist.

The government states the measure will be in force for 12 months from its implementation, and T13 pins down the starting point: 12 months counted from the first business day of the month following the second month after publication. Watch the Chilean legal term “mes subsiguiente,” which usually means the second month after publication, not the very next month.

There is a valve for buyers who purchase before the formal window opens. As the Finance Minister explained, the bill includes a clause making buyers eligible from the moment the bill is sent to Congress, so that “no deed gets stuck”. In practice, anyone who signs between the bill’s submission (April 22, 2026) and publication could recover the VAT via refund, provided the deed records the tax paid and the intent to claim the benefit.

Do buyers really save 19%?

Not necessarily. The “up to 19% savings” headline describes the mechanism (the 19% surcharge is removed), but the real effect on price is disputed, and credible estimates are much smaller. No responsible party should promise you a 19% discount.

The mechanism is real: during the window, homes can be sold without the 19% surcharge. But the final price does not fall by the same proportion, for two technical reasons: the developer loses the VAT input credits accumulated during construction, and the land value sits outside the tax base. That is why the numbers clash. In Emol, analyst José Tomás Santolaya (DEISA) warned that the true potential discount would be only about 1% to 3%, calling the notion that prices would drop 8% to 16% a “false premise”. From the industry, the Chilean Chamber of Construction warned the exemption will not mean a 19% cut in home prices, with effect estimates that other analyses place between 2% and 7%.

There was also an immediate side effect: the announcement alone froze sales while buyers waited for the fine print, with reported drops of 30% to 40% in transactions. Promising a saving that does not materialize is not just bad marketing: it can stall the very market it was meant to revive.

Where is the bill, and can it still change?

It is not law yet. As of July 15, 2026, the bill is in its final Senate stage, and its terms can still change until it is published in the Diario Oficial.

The legislative path, in short: announced in mid-March, the package entered the Chamber of Deputies on April 22, 2026 as bill 18216-05, cleared the Chamber, and moved to the Senate for its second constitutional stage. The Senate approved the general idea in late June, and after processing hundreds of amendments in committee, the Senate floor began voting on the bill article by article on July 15, 2026, in a session called to run until full dispatch that may spill into the next day given the sheer number of votes. The governing coalition went into that session with exactly the 26 votes needed to pass it, so nothing is locked in yet. The full progress can be tracked in the official case file for bill 18216-05 in the Senate.

Why this matters: while the bill is being voted, any provision, including the absence of a UF cap, could be modified by amendments, and a third stage back in the Chamber remains possible if the text returns changed. Do not sign anything assuming conditions that are not yet enacted.

Does this help a buyer in Aysen and Patagonia?

In theory yes, because the measure is national with no price cap. In practice it helps little: the benefit only reaches the first sale of new developer-built homes with prior municipal reception, and that is not the typical Patagonian market.

Think about what actually sells in Aysen: used houses in Coyhaique and Puerto Aysen, farms, estancias, and rural plots, almost always between private parties. None of that qualifies. The exemption is built for the stock of new apartments and houses in real estate projects, which is far more abundant in the big cities. Where it can apply is a new apartment or housing project in Coyhaique that already holds reception and whose developer chooses to opt in: there, it is worth asking, in writing, for the price with and without the benefit.

For what really moves the regional market, other tax rules still rule. When you sell, what usually matters is the 8,000 UF capital gains exemption, not VAT, and the yearly cost of holding runs through Chile’s annual property tax. For market context, see our overview of the Aysen real estate market and, if you are buying from abroad, our guide for American buyers in Chile and the broader guide to investing in Patagonia. To calibrate your search, browse the current properties for sale in the Aysen Region.

Frequently Asked Questions

Does the VAT exemption apply to used houses and apartments?

No. The exemption applies only to the first sale of a new home by the selling taxpayer, typically a developer. Used properties and private-party sales generate no VAT, so there is no tax to exempt. The resale market is still governed by other rules, such as the capital gains exemption on real estate.

Am I guaranteed to buy VAT-free if the home is new?

No, because the exemption is optional for the developer. Even if the home meets the requirements (newly built, first sale, municipal reception before the law), the seller must choose to opt into the benefit for that transaction. Always ask, in writing, for the price with and without the exemption before signing any purchase promise.

What is the price cap for the 0% VAT?

Under the bill as drafted, there is no price cap: it applies regardless of the value, surface area, or number of units in the project. The 4,000 UF limit often cited belongs to a different benefit in the same plan, the rate or dividend subsidy, which supports mortgage financing and should not be confused with the VAT exemption.

When does the exemption take effect?

There is no date yet. The 12-month window is counted from the first business day of the second month after the law is published in the Diario Oficial, and as of July 15, 2026 the bill is still moving through the Senate. A transitional clause would let buyers recover the VAT, via refund, if they purchase between the bill’s submission (April 22, 2026) and publication, recording it in the deed.

Does the exemption help me buy a farm or plot in Patagonia?

Barely. The exemption targets new homes in real estate projects, and the value of a farm or plot is mostly land, which sits outside the VAT base. Combined with the fact that most such sales are between private parties (no VAT), the benefit rarely touches Aysen’s rural market.