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Property ownership

The costs of owning a property in Brazil can differ depending on the type and size of the property, its location, and other individual circumstances. However, as a general guide, owners should bear in mind the following:

• Income tax - (Imposto de Renda de Pessoa Fisica in Brazilian). This is a federal tax which is levied on any income by individuals or corporations, including rental income. Non-residents are taxed at a flat rate of 25% on their gross income, without any deductions.
• Real estate tax - (Imposto sobre a Propriedade Predial e Territorial Urbana or IPTU). As this is a municipal tax the rate will depend on what municipality the property is in. The tax is based on the value of the property and the rate will range from 0.5% to 4%. The municipality will assess the property value, although they tend to assess under market value.
• Rural property tax - (Imposto sobre a Propriedade Territorial Rural or ITR).
  This is a federal tax, levied on any land located outside the urban zones of the municipality. The rates vary from 0.03 to 20% depending on the number of hectares of land. This is unlikely to apply to most investment property purchases in Brazil, however.
• Inheritance tax - in São Paulo, inheritance and gift taxes are imposed at progressive rates from 2.5% to 4%, depending on the value of the inheritance.
• Capital gains tax – this is considered to be an income tax in Brazil and is calculated on the difference between the final selling price and the registered purchase price of the property after maintenance costs have been deducted. It is important to check that the purchase price paid matches that registered with the authorities, as it is the latter that will be used for capital gains purposes. Capital gains tax is levied at a rate of 15%, however there are instances where capital gains are tax exempt:
  
  
  • if the property has been owned for 20 years or more;
  • if the profit is reinvested back into a Brazilian property;
  • if the property is the only piece of real estate the person owns;
  • if the property has been owned for at least five years and the sale price is not over approximately BRL582,750 (€229,500).

Related items

Documents and Reports

	Brazil property investment report (292Kb)
	Brazil country guide (1Mb)
	Brazil property buying guide (676Kb)
Documents and Reports

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