According to Law No. 21.631, individuals who acquire a residential property through a mortgage-backed loan with banks or financial institutions, will be able to apply for an annual tax credit up to 16 “Monthly Tax Units” (“Unidad Tributaria Mensual/UTM,” equivalent to approximately to CLP 1,023,360 as of November 2023). The credit will be applied against the Global Complementary Tax (annual tax) and/or Second Category Tax (employment income tax).
In cases where the income earned by an individual within a business year is not subject to taxes, he or she may still request a refund of the amount resulting from the annual tax return. Notwithstanding the foregoing, the annual credit to which a person is entitled will be the lesser of the annual mortgage payments to acquire the housing benefit within the respective business year or the amount equivalent to 16 UTM.
To access the benefit, individuals must meet the following requirements:
- Be an individual taxpayer with tax residence/tax domicile in Chile;
- Purchase a new residential property with a mortgage loan from banks or financial institutions in Chile;
- The acquired property must be constructed and with final acceptance in accordance with the date of entry into force of this law;
- The purchase and sale must be from the date of entry into force of this law (November 2, 2023) and registered in the name of the beneficiary in the “Real State Registrar” before October 1, 2024;
- File the annual income tax return in Chile.
It is important to note that this benefit could only be applied to one property per taxpayer, without an earnings limit to access the benefit.