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Everything you need to know before buying real estate is included in our Brazil Property Pack
Brazil's property tax system in 2025 includes multiple layers of taxation that affect every stage of real estate ownership, from purchase to sale.
Property buyers and investors face annual ownership taxes like IPTU for urban properties, transfer taxes like ITBI when purchasing, and capital gains taxes when selling. The specific rates and rules vary significantly between municipalities and states, with São Paulo being one of the most complex markets to navigate.
If you want to go deeper, you can check our pack of documents related to the real estate market in Brazil, based on reliable facts and data, not opinions or rumors.
Brazilian property owners face multiple taxes including IPTU (1% annually for urban properties), ITBI (3% on purchase), and capital gains tax (15-22.5% on sale).
Tax rates, exemptions, and payment deadlines vary by municipality and state, with significant differences between resident and non-resident investors.
| Tax Type | Rate | When Due | Who Pays |
|---|---|---|---|
| IPTU (Urban Property Tax) | 1% (residential) / 1.5% (commercial) | February annually | Property owner |
| ITBI (Transfer Tax) | 3% in São Paulo | Before deed registration | Buyer |
| ITCMD (Inheritance/Gift Tax) | 4% in São Paulo state | Within 60 days of transfer | Beneficiary |
| Rental Income Tax (Residents) | 0-27.5% progressive | Monthly/Annual return | Landlord |
| Rental Income Tax (Non-residents) | 15% flat rate | Monthly withholding | Landlord |
| Capital Gains Tax | 15-22.5% progressive | At time of sale | Seller |
Where is the property located and what determines the tax obligations?
Your property tax obligations in Brazil depend on three key factors: the specific city and state where your property is located, whether it's classified as urban or rural land, and your tax residency status.
Urban properties in cities like São Paulo are subject to IPTU (Imposto Predial e Territorial Urbano), while rural properties outside city limits fall under ITR (Imposto Territorial Rural) administered by the federal government. Each municipality sets its own IPTU rates, exemptions, and payment schedules.
Brazilian tax residents face different rates and deduction opportunities compared to non-residents, particularly for rental income and capital gains taxes. Tax residency is determined by spending more than 183 days in Brazil during a 12-month period or having permanent resident status.
As of September 2025, São Paulo city applies a 1% IPTU rate for residential properties and 1.5% for commercial properties, calculated on the municipal assessed value (valor venal), which typically ranges from 70-90% of market value.
What are the 2025 annual ownership taxes and how are they calculated?
IPTU rates for urban properties in São Paulo are set at 1% for residential and 1.5% for commercial properties in 2025.
The tax is calculated on the valor venal, which is the municipal assessed value typically representing 70-90% of the property's market value. This assessed value considers factors like location, construction quality, property size, and local zoning regulations.
For rural properties, ITR rates are progressive based on property size and land utilization efficiency, ranging from 0.03% for small, well-utilized properties to up to 5% for large, underutilized land. Rural properties of 30 hectares or less (outside Amazon and Pantanal regions) are exempt if owner-occupied and represent the owner's sole rural property.
Municipal governments update valor venal assessments annually, and property owners can contest these valuations through formal administrative procedures if they believe the assessment exceeds fair market value.
How much would you pay on properties valued at R$300,000, R$1,000,000, and R$3,000,000?
Based on São Paulo's 2025 IPTU rates and assuming an 80% valor venal assessment ratio, here are the specific tax amounts you would pay annually.
| Property Market Value | Assessed Value (80%) | IPTU Rate | Annual IPTU Due |
|---|---|---|---|
| R$300,000 | R$240,000 | 1% | R$2,400 |
| R$1,000,000 | R$800,000 | 1% | R$8,000 |
| R$3,000,000 | R$2,400,000 | 1% | R$24,000 |
| R$300,000 (Commercial) | R$240,000 | 1.5% | R$3,600 |
| R$1,000,000 (Commercial) | R$800,000 | 1.5% | R$12,000 |
| R$3,000,000 (Commercial) | R$2,400,000 | 1.5% | R$36,000 |
What discounts, exemptions, and penalties apply in 2025?
São Paulo offers a 3% early payment discount for IPTU if paid in full by February 2025.
Senior citizens aged 65 or older qualify for IPTU exemptions if their monthly income is below R$3,000, the property value is under R$200,000, and it serves as their primary residence. Similar exemptions apply to disabled individuals and low-income families meeting municipal income thresholds.
- Early payment discount: 3% off total IPTU if paid by February deadline
- Senior exemption: Complete IPTU waiver for qualifying seniors (age 65+, income under R$3,000/month, property under R$200,000)
- Disability exemption: Full exemption for disabled property owners meeting income and value criteria
- Low-income exemption: Municipal programs for families below specified income thresholds
- Primary residence benefits: Various municipalities offer reduced rates for owner-occupied properties
Overdue IPTU payments incur a daily fine of 0.33% up to a maximum of 20%, plus 1% monthly interest that compounds. For a R$8,000 IPTU bill paid 6 months late, you would face approximately R$1,600 in fines and R$480 in interest.
What are the payment deadlines and installment options?
IPTU payments in São Paulo are due in February 2025, with the exact date typically announced in January.
Property owners can choose to pay the full amount by the February deadline to receive the 3% discount, or split the payment into up to 10 monthly installments from February through November. Installment payments do not qualify for the early payment discount.
Late payments beyond the due dates incur 1% monthly interest plus daily penalties of 0.33% up to a 20% maximum fine. ITR for rural properties has a federal deadline of September 30, 2025, for filing the annual declaration (DITR).
Most municipalities allow online payment through bank transfers, boleto bancário, or direct debit arrangements. Property owners receive tax bills by mail or can access them through municipal online portals using their CPF and property registration numbers.
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What is the municipal transfer tax (ITBI) when purchasing property?
ITBI (Imposto de Transmissão de Bens Imóveis) in São Paulo is charged at 3% of the higher value between the sale price and the municipal assessed value (valor venal).
The buyer is responsible for paying ITBI before the property deed can be registered at the cartório (notary office). This tax must be paid in full and cannot be financed as part of the mortgage.
| Property Purchase Price | ITBI Rate | ITBI Tax Due |
|---|---|---|
| R$300,000 | 3% | R$9,000 |
| R$1,000,000 | 3% | R$30,000 |
| R$3,000,000 | 3% | R$90,000 |
Payment is typically made through boleto bancário issued by the municipality or authorized agent. The ITBI rate varies by municipality, with some cities charging 2% and others up to 3.5%, making location a crucial factor in transaction costs.
How much is the inheritance and gift tax (ITCMD)?
São Paulo state charges a flat 4% ITCMD (Imposto de Transmissão Causa Mortis e Doação) rate on property transfers through inheritance or gifts in 2025.
The beneficiary (heir or gift recipient) is responsible for paying this tax, typically within 60 days of the transfer or probate proceedings. The tax is calculated on the property's market value as determined by official appraisal.
| Property Value | ITCMD Rate | Tax Due | Net Value Received |
|---|---|---|---|
| R$500,000 | 4% | R$20,000 | R$480,000 |
| R$1,500,000 | 4% | R$60,000 | R$1,440,000 |
| R$5,000,000 | 4% | R$200,000 | R$4,800,000 |
Some states are considering progressive ITCMD rates that could reach 8% for high-value transfers, but São Paulo maintains the 4% flat rate as of September 2025. It's something we develop in our Brazil property pack.
How is rental income taxed for property owners?
Rental income taxation in Brazil differs significantly between tax residents and non-residents, with residents having access to deductions that can substantially reduce their tax burden.
Brazilian tax residents pay progressive income tax rates from 0% to 27.5% on rental income, with the ability to deduct IPTU, condominium fees, property maintenance costs, and property management fees. Non-residents face a flat 15% withholding tax with no deductions permitted.
| Monthly Rent | Resident Tax Rate | Resident Tax (Monthly) | Non-Resident Tax (15%) |
|---|---|---|---|
| R$2,000 | 0% (below threshold) | R$0 | R$300 |
| R$5,000 | 22.5% | R$850 (after deductions) | R$750 |
| R$10,000 | 27.5% | R$1,930 (after deductions) | R$1,500 |
Residents must declare rental income in their annual tax return (IRPF), while non-residents have tax automatically withheld by the tenant or property management company and remitted monthly to the federal revenue service.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Brazil versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What capital gains taxes apply when selling property?
Capital gains tax rates in Brazil follow a progressive structure for residents, ranging from 15% to 22.5% depending on the gain amount.
Brazilian residents benefit from significant exemptions, including complete exemption for primary residence sales under R$440,000 (once per lifetime) or when proceeds are reinvested in a new primary residence within 180 days. Non-residents pay a flat 15% rate on all capital gains with limited exemptions.
| Capital Gain Amount | Resident Tax Rate | Tax Due (Residents) | Tax Due (Non-Residents) |
|---|---|---|---|
| R$100,000 | 15% | R$15,000 | R$15,000 |
| R$500,000 | 15% | R$75,000 | R$75,000 |
| R$2,000,000 | 15% | R$300,000 | R$300,000 |
| R$6,000,000 | 17.5% | R$1,050,000 | R$900,000 (15%) |
| R$15,000,000 | 20% | R$3,000,000 | R$2,250,000 (15%) |
Capital gains are calculated based on the difference between the sale price and the original purchase price, adjusted for inflation using the IPCA index. Selling costs, improvement expenses, and ITBI paid on the original purchase can be deducted from the gain calculation.
What other municipal and state charges apply to property ownership?
Beyond the main property taxes, Brazilian property owners face several additional municipal and state charges that vary by location and property type.
- Garbage collection fees: Usually included in IPTU in major cities like São Paulo, but charged separately in some municipalities
- Public lighting contribution: Funded through electricity bills rather than direct property charges
- Condominium fees: For apartment buildings and gated communities, ranging from R$200-2,000+ monthly depending on amenities
- Fire brigade fees: Minimal charges assessed in some municipalities, typically under R$100 annually
- Environmental fees: Charged in some coastal or environmentally sensitive areas
Most additional municipal charges in São Paulo are incorporated into the IPTU bill, making it a comprehensive property tax that covers multiple municipal services. Total additional charges beyond IPTU typically amount to less than R$500 annually for standard residential properties.
It's something we develop in our Brazil property pack.
What steps and documents are required to pay each tax?
Paying property taxes in Brazil requires navigating multiple online portals and maintaining proper documentation for each tax type.
IPTU payments in São Paulo are managed through the municipal portal (prefeitura.sp.gov.br), where property owners can access bills using their CPF and property registration number. ITR for rural properties uses the federal portal (ditr.receita.fazenda.gov.br) and requires annual declaration filing by September 30.
- IPTU: Municipal portal access with CPF, property deed, and prior tax bills
- ITBI: Notary office coordination with sale contract, CPF, and property valuation documents
- ITCMD: State tax office filing with inheritance/gift documentation and property appraisal
- Income/Capital gains: Federal revenue portal (Receita Federal) with sale deeds, bank statements, and expense receipts
- Rental income: Monthly withholding forms or annual declaration with rental agreements and expense documentation
Notary fees range from 0.3-0.5% of property value, while registry fees cost 0.1-0.3%. Total administrative costs for a typical property transaction range from 0.4-0.8% of the property value, excluding the actual tax amounts.
What is the complete timeline and cash flow for different types of property owners?
Property ownership in Brazil involves different payment schedules and tax obligations depending on how you use the property.
| Owner Type | Tax/Fee | Payment Month | Estimated Amount (R$1M property) |
|---|---|---|---|
| Buyer | ITBI | At purchase | R$30,000 |
| Buyer | Notary/Registry fees | At purchase | R$4,000-8,000 |
| Owner-Occupier | IPTU | February (or installments) | R$8,000 |
| Landlord | IPTU | February | R$8,000 |
| Landlord | Income tax on rent | Monthly/Annual | Variable by rent amount |
| Seller | Capital gains tax | At sale completion | 15% of gains |
Buyers face the highest upfront costs with ITBI and registration fees due immediately at purchase. Owner-occupiers have the simplest tax obligation with annual IPTU only. Landlords must manage both property taxes and income tax on rental receipts. Sellers face capital gains tax calculated at the time of sale completion.
It's something we develop in our Brazil property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Understanding Brazil's property tax system in 2025 requires careful attention to municipal and state variations, with São Paulo representing one of the more expensive markets for property taxation.
Foreign investors should particularly focus on the differences between resident and non-resident tax treatment, as these can significantly impact the overall returns on Brazilian real estate investments.
Sources
- Brazil Property Taxes - The LatinVestor
- Chambers Corporate Tax Guide 2025 - Brazil
- Santander Trade - Brazil Tax System
- São Paulo Municipal Government - IPTU Calendar 2025
- PLBrasil - ITR Rural Land Tax 2025
- Oliveira Lawyers - Real Estate Closing Costs Brazil
- PwC Tax Summaries - Brazil Individual Income Taxes
- PwC Tax Summaries - Brazil Other Taxes