- The non-taxable income associated to the amounts obtained from the rental of housing according to the Decree with force of Law No. 2 of 1959 (DFL 2) is
eliminatedlimited, benefiting only individuals’ resident in Chile, over 65 years of age, for a maximum of two properties, and up to a máximum amount of 15.5 UTA (US$12,500 approx.). Taxpayers whose annual gross income for the respective year exceeds 30 UTA (US$25,000 approx.) are not eligible for the benefit. The benefit does not apply to the capital gain obtained on the sale of housing according to DFL 2.
- Regarding capital gains obtained in the sale of real estate located in Chile:
- Its taxation is modified from a cash basis to an accrual basis.
- The benefit of the 8,000 foment units (US$ 265,000 approx.) of non-taxable income is limited only to individuals with domicile or residence in Chile.
- The credit coming from the inheritance tax paid when acquiring the real estate by inheritance is eliminated.
- The possibility of deducting interest from mortgage loans from the personal income tax taxable base is limited to 1 loan only.
- The rental payment for housing intended for residential use may be deducted from the personal income tax taxable base. Maximum limit: 8 monthly tax units (US$ 465 monthly, approx.).
- Likewise, 10% of the annual income obtained from the rental of real estate used for housing purposes (and which are not agricultural) may be deducted from the personal income tax taxable base. The 10% will be applied on the rental income, having deducted from the latter the real estate tax affecting the property. The deduction does not apply in the case of real estate whose income is not computed for the Personal Income Tax, nor in the case of real estate whose real estate tax is a credit against the Personal Income Tax.
- Regarding VAT, the leasing (or any other way of cession of the of the temporary use or enjoyment) of furnished real estate would be no longer considered a VAT taxable event. The leasing of real estate with installations or machinery that allow the exercise of any commercial or industrial activity is maintained as a VAT taxable event.
The inclusions and eliminations marked in color correspond to indications presented to the original project.