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VAT on real estate in Chile: sales by habitual sellers, the land deduction, furnished and commercial leases, and the 2026 to 2027 temporary exemption on new homes

Last verified: 2026-10-26 · Status: Changing

Sales of real estate bear 19 percent VAT only when the seller is a habitual seller, as the SII qualifies, or sells a fixed asset on which it took VAT credit; private resales are outside VAT. The land value is deducted from the VAT base, unfurnished leases are exempt, and furnished or equipped leases are taxed after deducting 11 percent a year of the fiscal assessment. Ley Nº 21.850 lets sellers exempt the first sale of finished new homes for one year from 1 December 2026.

USD figures use the Central Bank exchange rate of CLP 986.58 per US dollar published in the Diario Oficial for 23 October 2026 (CVE 2891564). UF figures use the SII value of CLP 41,221.08 for 26 October 2026, UTM figures the October 2026 value of CLP 72,151 and UTA figures the December 2025 value of CLP 834,504. Conversions are for orientation only.

Key facts

VAT on sales of real estate by habitual sellers	19 %DL Nº 825 art. 2 Nº 3 and art. 8, as of 2026-10-26 · in force
VAT on unfurnished leases	Exempt textDL Nº 825 art. 12 letter E Nº 11, as of 2026-10-26 · in force
Deduction from furnished or equipped lease rent	11 % of fiscal assessment a yearDL Nº 825 art. 17, as of 2026-10-26 · in force
Land value deducted from VAT base on sales	Indexed acquisition cost or fiscal assessment of the land textDL Nº 825 art. 17, as of 2026-10-26 · in force
Temporary VAT exemption on first sale of completed new homes	1 December 2026 for one year textLey Nº 21.850 fourth transitory article, as of 2026-10-26 · in force

The rule

1. A seller for VAT purposes is anyone, including communities and de facto partnerships, who habitually sells movable or immovable goods, of its own production or bought from third parties; the SII qualifies habituality. Sales on foreclosure of mortgages, later sales of property received in payment that the law obliges to be sold within a term, and other court authorised forced sales are not habitual. The sale of real estate forming part of a company's fixed assets is also taxed if the company was entitled to VAT credit on its acquisition or construction.Decreto Ley Nº 825, Ley sobre Impuesto a las Ventas y Servicios, as amended by Ley Nº 20.780 (Diario Oficial 29 September 2014), Ley Nº 20.899 and Ley Nº 21.210, Art. 2 Nº 3 and art. 8 letter m), 2014-09-29 official text · verified 2026-10-26

2. In a taxed sale of real estate, the seller deducts from the contract price the acquisition value of the land included in the sale, indexed to consumer prices between the month before acquisition and the month before the contract, or alternatively the land's fiscal assessment (a new appraisal of the land may be requested). The same applies proportionally to each instalment of a lease with purchase option. Invoices must show the land value separately. The SII may reassess under art. 64 of the Código Tributario when the land value is clearly above market or the construction value clearly below cost and comparable buildings.
Cost to do it: 19 percent of price minus land: on a CLP 300,000,000 new apartment with land valued at CLP 80,000,000, VAT is CLP 41,800,000.
Example: Price CLP 300,000,000, land CLP 80,000,000: VAT base CLP 220,000,000, VAT CLP 41,800,000. / Price about US$304,081, VAT about US$42,369.Decreto Ley Nº 825, Art. 17, second to final paragraphs, 2014-09-29 official text · verified 2026-10-26

3. Leases, subleases, usufruct or any other temporary assignment of furnished real estate, of real estate with installations or machinery that allow a commercial or industrial activity, and of any business establishment, are taxed with VAT; the furniture or installations must be sufficient for living or office use or for the activity, under criteria set by the SII. For these leases the lessor deducts from the rent 11 percent a year of the property's fiscal assessment (proportionally for partial or shorter leases). Leases of real estate otherwise, including unfurnished homes and offices, are exempt, as are leases with purchase option where the preceding acquisition bore no VAT.
Cost to do it: On a furnished office rented for CLP 60,000,000 a year with a fiscal assessment of CLP 200,000,000, the VAT base is CLP 60,000,000 minus CLP 22,000,000 (11 percent), so VAT is CLP 7,220,000 a year.
Example: About US$7,318 a year of VAT, creditable by a VAT registered tenant.Decreto Ley Nº 825, Art. 8 letter g), art. 12 letter E Nº 11 and art. 17 first paragraph, 2014-09-29 official text · verified 2026-10-26

4. Exchanges and sales where part of the price is paid in goods are treated as a taxed sale by each party that is a seller, on the value of what it delivers.Decreto Ley Nº 825, Art. 18, 1974-12-31 official text · verified 2026-10-26

5. For one year from the first business day of the second month after publication (1 December 2026), sellers may opt to exempt from VAT the sale of homes that would otherwise be taxed, if the home (with parking and storage sold in the same act under the same reception) is sold for the first time after its final municipal works reception, that reception is dated before 17 October 2026, and the sale is by public deed within the year, or later if it follows a promise contract signed by public deed or notarised in the year. Transfers between related companies do not count as the first sale. The seller keeps its VAT credit on construction costs (usable against other VAT or treated as cost), and sales signed between the filing of the bill and the start date that paid VAT can obtain a refund if the VAT charged is returned to the buyer. The deed must expressly invoke the exemption.
Cost to do it: Saves the buyer up to 19 percent of the price minus land: CLP 41,800,000 on the example above (US$42,369).Ley Nº 21.850, Para la reconstrucción nacional y el desarrollo económico y social (Diario Oficial 17 October 2026), Fourth transitory article, 2026-10-17 official text · verified 2026-10-26 · changed: Temporary VAT exemption on first sales of completed new homes, created by Ley Nº 21.850 of 17 October 2026; window opens 1 December 2026 for one year.

Transaction	VAT
Resale of a home by a private individual not qualified as habitual	Not taxed
Sale of new homes or offices by a developer	19 percent on price minus land
First sale of a home with final reception before 17 October 2026, deed or promise from 1 December 2026 for one year	Exempt if the seller opts in
Sale of a building that is a fixed asset on which the company took VAT credit	19 percent
Lease of unfurnished home or office	Exempt
Lease of furnished property or premises with installations for the business	19 percent on rent minus 11 percent a year of the fiscal assessment
Foreclosure sale	Not habitual, not taxed

VAT treatment by transaction (DL Nº 825; Ley Nº 21.850)

Worked example

A developer sells a finished apartment, received by the municipality in August 2026, for CLP 300,000,000 with land of CLP 80,000,000. Signed in November 2026 it bears CLP 41,800,000 of VAT; signed by deed in December 2026 the developer may opt for the exemption and still use its construction VAT credit.

Step by step

Ask the SII or your adviser whether a planned series of sales will be treated as habitual.
In developer contracts, separate the land value in the deed and invoices.
For furnished or serviced leases, register for VAT and invoice monthly; tenants in taxed businesses can use the credit.
For new home purchases after 1 December 2026, check the final reception date and that the deed invokes the Ley Nº 21.850 exemption.

Common traps

Buying land to subdivide and sell plots can make an individual a habitual seller.
VAT on a purchase is a final cost for individuals and VAT exempt businesses.
Short term furnished rentals fall in the taxed furnished lease rule, not the unfurnished exemption.
The new home exemption needs a final reception dated before 17 October 2026, so homes completed later do not qualify.

Sources

← The property tax surcharge on large holdings in Chile (sobretasa de impuesto territorial): who pays, how holdings are added up, marginal bands and rates, accrual and exclusionsTax on selling Chilean real estate: the 8,000 UF lifetime exemption, holding periods, the 10 percent option, related party sales, non resident sellers and buyer withholding →