The main changes introduced by the new law are the following:
1. Increase in the deduction per child: Taxpayers may deduct a notional annual amount for each dependent minor child, which the new law increased from 13 BPC2 (approximately US$1,840) to 20 BPC (approximately US$2,830).
2. Housing credit: Taxpayers are granted a tax credit for the amounts paid for mortgage loans for the acquisition of their homes3, provided the property does not exceed a certain value. The new regulation changed the indicated value for the property, increasing it from 794,000 UI4 (approximately US$115,000) to 1,000,000 UI (approximately US$145,000).
3. Deductions for taxpayers with annual income up to 180 BPC: The new rule provides that those taxpayers with annual incomes not exceeding 180 BPC (currently approximately US$25,470) can claim certain deductions (e.g., dependent child allowance and social contributions) up to a stipulated percentage of their value, which the new law increases from 10 percent to 14 percent (8 percent rate applies in all other cases).
4. Tax credit for housing rental: Under certain conditions, a credit is granted against Personal Income Tax for a percentage of a rental/lease that is destined to housing of the taxpayer (the taxpayer must be the tenant and pay rent to the landlord). The tax credit is set as a percentage of the rental, which is increased by the new law from 6 percent to 8 percent of the annual rental/lease price.