On November 17th, the Law on Contribution to Public Space should come into force, whose objective is to achieve mitigations understanding that all real estate projects generate externalities in their environment. The contributions are based on the density and destination of the project and will be delivered to the commune where they are located. While it is a regulation focused on improving public spaces, it will have effects on the price of homes, because it could increase the value of the land by up to 44% and thus the value of the construction, being able to raise the final price of an apartment by 8%. This effect is much greater than the impact VAT had at the time.
There is another new rule in place created to improve people’s conditions: the Pipelines Act, which obliges real estate companies to take care of all wiring for telecommunications services. This regulation has two main advantages: on the one hand, there is no exclusivity contract with a particular company and, on the other hand, the entire building is connected. However, this also increases the cost of major construction and the maintenance of buildings, as this law is borne by the communities and not by the companies that deliver this service.
The latter rule is impacting between 1.4% and 2% the sales value, so only as a product of these two initiatives a department that a couple of months ago was worth UF 2,000 now we will find it at around UF 2,200, up to 10% higher.
In view of this reality, it is of paramount importance that when creating new initiatives, all possible implications will be assessed, because, although the ultimate goal is to improve the quality of life of all Chileans, they have an impact on house prices, which continue to rise and do not seem to be close to stabilizing with these laws.
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