DEAR EDITOR:
Chile is aging rapidly: today, 14% of the population is 65 years or older, compared to 11.4% in 2017. At the same time, revenue from property taxes decreased between 2024 and 2025, a situation not seen since the pandemic. Ten of the twenty municipalities that receive the most resources from the Municipal Common Fund (FCM) have an aging index above the national average (IE 79). One would expect this to translate into greater well-being for retirees, but the Urban Quality of Life Index (ICVU) shows setbacks in three of those ten municipalities over the past decade.
National debt in property taxes increased from $63 billion in 2022 to $442.1 billion in 2025, with the municipalities with the highest aging index having the most debt. The disconnect between aging, quality of life, and the tax burden is evident.
Housing is a family asset, not just an income-generating property, and it reflects the social status of its owners. Exempting retirees from property taxes on their homes would recognize their social and fiscal contributions. The challenge is to modernize the tax system and design sustainable compensation mechanisms for local governments if this measure is approved. This measure represents less than 5% of the FCM, a proportion that would not constitute a catastrophe for municipal services.
Demetrio V. Benito O.
Advisor. Contributions Committee
Association of Municipalities of Chile
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July 9, 2025
Houses, villas, Maipu, Contributions
Photo: Andres Perez
Andres Perez Comments
TO THE EDITOR: Chile is aging rapidly: today, 14% of the population is 65 years or older, compared to 11.4% in 2017. At the same time, tax revenue from property taxes fell between 2024 and 2025, something not seen since the pandemic. Ten of the twenty municipalities that receive the most resources from the Municipal Common Fund (FCM) have an aging index above the national average (IE 79). One would expect this to translate into greater well-being for retirees, but the Urban Quality of Life Index (ICVU) shows setbacks in three of those ten municipalities over the past decade. National debt in property taxes rose from $63 billion in 2022 to $442.1 billion in 2025, with the municipalities with the highest aging index having the most debt. The disconnects between aging, quality of life, and the tax burden are evident. Housing is a family asset, not an income-generating asset beyond the social status of its owners. Exempting retirees from property taxes on their homes would recognize their social and fiscal contribution. The challenge is to modernize the tax and design sustainable compensation for local governments if the measure is approved, which represents less than 5% of the FCM, a proportion that does not imply a catastrophe for municipal services.
Demetrio V. Benito O.
Advisor, Contributions Commission
Association of Municipalities of Chile
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Aging
Municipal Common Fund
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