Ecuador President enacts income tax reduction for social housing donations

President Daniel Noboa has enacted Executive Decree 440, regulating a reform to the Internal Revenue Law that offers a tax incentive for donations toward social housing. The measure aims to encourage the construction of affordable homes and reduce Ecuador's housing deficit.

Individuals and legal entities can now benefit from a reduction of up to 100% of the donated value in their income tax. However, this tax reduction is capped at 30% of the tax owed for the fiscal year and cannot be used as a future tax credit or refunded. To qualify, donors must sign an agreement with the housing authority, specifying the housing segment, donation value, technical details, and completion timeline.

The regulation also establishes a public registry, the Catalog of Needs for Social Interest Housing, to identify areas with high demand and eligible projects. Donors can contribute either completed social housing units or funds for partial financing of homes acquired through preferential mortgage loans. The Ministry of Urban Development and Housing will implement a digital platform to streamline the donation process and list the requirements for accessing the incentive.