On Tuesday, October 28th, a Bill was introduced in Congress that proposes amendments to Law No. 17,235 on Property Tax. The bill focuses on three main areas:
- Establishing new benefits for economically vulnerable senior citizens regarding property tax;
- Modifying contributions to the Municipal Common Fund; and
- Postponing the reassessment process for non-agricultural properties scheduled for 2026.
Regarding the first, it should be noted that Article 1 of Law No. 20,732 currently grants a 100% reduction in property tax for senior citizen taxpayers whose annual income is below 13.5 UTA (CLP $11,220,930 as of December 2024), and a 50% reduction for those whose income does not exceed 30 UTA (CLP $24,935,400 as of December 2024).
Additionally, the benefit is subject to several other requirements, including that the senior citizen owns the property used as their main residence and that the property’s fiscal valuation does not exceed CLP $224,500,000.
The bill seeks to introduce a new benefit for taxpayers who meet the maximum income requirement but own a property whose valuation exceeds the legal threshold. In such cases, the annual property tax would be reduced so that it does not exceed 5% of the taxpayer’s annual income.
As for the second point, the bill proposes changes to the rules governing contributions made by the municipalities of Las Condes and Lo Barnechea to the Municipal Common Fund, derived from property tax revenues.
Under the proposal, Lo Barnechea’s contribution would increase from 60% to 65% of its property tax revenues, while Las Condes would see its contribution rise from 65% to 80%.
Finally, regarding the third point, the bill would extend until 2027 the reassessment process for non-agricultural properties, with subsequent reassessment processes automatically deferred accordingly.