Chile's Reconstruction National bill proposes a full property tax exemption for people over 65 on their primary home, sparking alarm among mayors over municipal funding and the Common Municipal Fund. The government projects a US$200 million revenue drop, with compensation details unresolved. Several mayors decry the impact on basic services.
Article 12 of the Bill for National Reconstruction and Economic and Social Development grants a 100% property tax exemption to natural persons over 65 on their sole primary residence. It includes fines for irregularities and rules against evasion via family transfers. The change directly cuts municipal revenues, which fund operations and contributions to the Common Municipal Fund (FCM) that aids vulnerable communes from richer ones.
Official estimates project a US$200 million revenue shortfall, with US$130 million hitting the FCM and US$70 million lost directly to municipalities. The eighth transitory article states the Budget Law will provide extra FCM funds, but it does not ensure full compensation or specify handling of non-FCM portions, deferring to Congress.
AChM President Gustavo Alessandri stated: “You don't play with municipalism,” calling partial FCM restitution unacceptable. Maipú Mayor Tomás Vodanovic labeled it a “regressive barbarity” endangering services in over 80% of communes, while Lo Barnechea Mayor Felipe Alessandri sought compensation details. Santiago Mayor Mario Desbordes backs it but demands full reimbursement.
