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Foreign buyers purchasing real estate in Brazil face multiple taxes and fees that can add 5-10% to the total property cost.
The main taxes include the ITBI transfer tax (2-4% of property value), notary and registration fees (1-1.5%), and annual IPTU property tax (0.3-1.5%). Foreign owners also pay 15% tax on rental income and capital gains tax of 15-22.5% when selling, with specific withholding requirements for non-residents.
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.
Foreign buyers in Brazil typically pay 5-10% of property value in total taxes and fees during purchase, including ITBI transfer tax, notary fees, and registration costs.
Annual property taxes (IPTU) range from 0.3-1.5% of assessed value, while rental income is taxed at 15% for non-residents and capital gains at 15-22.5% depending on sale value.
| Tax/Fee Type | Rate | Basis |
|---|---|---|
| ITBI Transfer Tax | 2-4% (typically 3%) | Property value or municipal assessment |
| Notary & Registration Fees | 1-1.5% | Property value |
| IPTU Annual Property Tax | 0.3-1.5% | Municipal assessed value |
| Rental Income Tax (Non-residents) | 15% | Gross rental income |
| Capital Gains Tax | 15-22.5% | Sale proceeds minus purchase costs |
| Legal Fees | 1-3% | Property value |
| Total Purchase Costs | 5-10% | Property value |
What purchase taxes will I pay when buying real estate in Brazil as a foreigner?
Foreign buyers in Brazil must pay the ITBI transfer tax as the primary purchase tax.
The ITBI (Imposto sobre Transmissão de Bens Imóveis) is a municipal tax that typically ranges from 2% to 4% of the property value. As of September 2025, most major Brazilian cities charge 3% for this transfer tax, including São Paulo, Rio de Janeiro, and Salvador.
This tax is calculated on either the transaction value or the municipal reference value (valor venal), whichever is higher. The municipality where the property is located sets the exact percentage and collects this tax. You must pay the ITBI before the property deed can be registered in your name.
Beyond the ITBI, you'll also face notary and registration fees, which are separate from the transfer tax but equally mandatory for completing your property purchase.
How much is the ITBI transfer tax and does the percentage vary by city?
The ITBI transfer tax varies significantly across Brazilian municipalities, ranging from 2% to 4% of the property value.
São Paulo charges 3% ITBI for most residential properties, while Rio de Janeiro also applies a 3% rate. Salvador follows the same 3% standard for residential real estate purchases.
Some cities offer slightly lower rates: Curitiba charges 2.4% ITBI, and Fortaleza applies a 2.5% rate. Brasília typically charges 3% for residential properties, though rates can be higher for commercial properties in the same city.
It's something we develop in our Brazil property pack.
The municipality always calculates ITBI on the higher value between your actual purchase price and the municipal assessed value (valor venal). This prevents underreporting of property values and ensures the city collects appropriate tax revenue.
What are the notary and registration fees, and how are they calculated on the property price?
Notary and registration fees in Brazil typically cost between 1% and 1.5% of the property value combined.
The notary fee (taxa de escritura) covers the cost of drafting and authenticating the property deed. Each Brazilian state sets its own notary fee schedule, with most states charging around 0.5% to 1% of the property value.
Registration fees (taxa de registro) are paid to record the property deed at the local real estate registry office. These fees usually add another 0.3% to 0.7% of the property value, depending on the state and municipality.
In Bahia, for example, notary fees can reach 1.5% of the property value, making it one of the higher-cost states for these services. São Paulo and Rio de Janeiro typically charge combined notary and registration fees of around 1.2% to 1.4% of the property value.
These fees are calculated based on either the transaction value or the official appraised value, whichever is higher, similar to the ITBI calculation method.
Are there annual property taxes in Brazil, and how much is the IPTU tax typically?
Yes, Brazil imposes an annual urban property tax called IPTU (Imposto Predial e Territorial Urbano) on all real estate owners.
The IPTU tax typically ranges from 0.3% to 1.5% of the municipal assessed value (valor venal) annually. Most residential properties in major Brazilian cities fall within the 0.6% to 1.2% range for this annual tax.
| City | IPTU Rate Range | Typical Rate for Residential |
|---|---|---|
| São Paulo | 0.6% - 1.5% | 1.0% |
| Rio de Janeiro | 0.6% - 1.2% | 0.9% |
| Salvador | 0.4% - 1.0% | 0.7% |
| Brasília | 0.3% - 1.4% | 0.8% |
| Curitiba | 0.5% - 1.3% | 0.8% |
| Fortaleza | 0.4% - 1.1% | 0.6% |
| Recife | 0.5% - 1.2% | 0.8% |
The municipal assessed value (valor venal) is determined by each city's tax authority and may be lower than the market value. IPTU bills are typically issued in January or February each year, with payment due by the end of the year or in installments.
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Do different municipalities set different IPTU rates, and what ranges should I expect?
Yes, each Brazilian municipality sets its own IPTU rates, creating significant variation across the country.
Large cities like São Paulo and Rio de Janeiro typically charge higher IPTU rates, ranging from 0.6% to 1.5% of the assessed value. Medium-sized cities often charge between 0.4% and 1.2%, while smaller municipalities may charge as low as 0.3%.
Progressive IPTU systems are common, where luxury properties face higher rates. São Paulo applies rates up to 1.5% for high-value residential properties, while standard apartments might pay 0.6% to 1.0%. Rio de Janeiro uses a similar progressive structure.
Coastal tourist areas like Florianópolis and beach cities in Bahia often charge premium IPTU rates of 1.0% to 1.4% for properties in desirable locations. These higher rates reflect both the property values and the municipal services provided in tourist zones.
It's something we develop in our Brazil property pack.
Is there a wealth tax or additional levy for high-value properties?
Brazil currently has no federal wealth tax on real estate as of September 2025.
However, municipalities can apply higher IPTU rates to luxury and high-value properties as a progressive taxation measure. Properties valued above certain thresholds may face IPTU rates at the upper end of the municipal range.
São Paulo, for instance, applies its highest IPTU rate of 1.5% to residential properties with high assessed values. Rio de Janeiro similarly uses progressive IPTU rates that effectively function as a luxury property levy.
Some municipalities also classify high-value properties differently, potentially subjecting them to commercial property tax rates instead of residential rates. This reclassification can significantly increase the annual tax burden.
While federal wealth tax proposals occasionally surface in Brazilian politics, none have been implemented as of 2025. The progressive IPTU system remains the primary way municipalities tax high-value real estate.
How are rental income taxes applied to foreign owners, and what are the current rates?
Non-resident foreign owners pay a flat 15% tax on gross rental income from Brazilian properties.
This 15% rate applies to the total rental income received, with no deductions allowed for property management costs, maintenance expenses, or depreciation. The tax must be paid monthly by the 20th of the following month.
Brazilian tax residents (including foreigners who qualify as residents) pay rental income tax under the progressive income tax system, with rates ranging from 7.5% to 27.5% depending on total income. However, residents can deduct legitimate property expenses.
Property management companies or rental agents typically handle the tax withholding and payment for non-resident owners. If you manage rentals yourself, you must register with the Brazilian tax authority (Receita Federal) and make monthly payments.
The 15% rate for non-residents has remained stable since recent tax reforms and is considered competitive compared to other Latin American countries.
Do I have to pay capital gains tax when selling, and how is the gain calculated in Brazil?
Yes, foreign property owners must pay capital gains tax when selling real estate in Brazil, with rates varying by the total gain amount.
| Capital Gain Amount (BRL) | Tax Rate | Example on R$1M Gain |
|---|---|---|
| Up to 5 million | 15% | R$150,000 |
| 5M to 10M | 17.5% | R$175,000 |
| 10M to 30M | 20% | R$200,000 |
| Above 30M | 22.5% | R$225,000 |
Capital gains are calculated as the difference between your sale price and your adjusted purchase cost. The adjusted purchase cost includes your original purchase price plus documented improvement costs, legal fees, and certain acquisition expenses.
For example, if you bought a property for R$800,000, spent R$100,000 on improvements, and sold it for R$1,200,000, your capital gain would be R$300,000 (R$1,200,000 - R$800,000 - R$100,000). At the 15% rate, you'd pay R$45,000 in capital gains tax.
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Is there a withholding tax on property sales made by non-residents?
Yes, Brazil applies capital gains tax withholding on property sales by non-resident foreigners.
The notary office typically withholds the capital gains tax at the time of sale, using the same progressive rates (15% to 22.5%) based on the gain amount. This withholding ensures the Brazilian tax authority collects the tax before the non-resident receives the sale proceeds.
The withholding is calculated during the property transfer process, and the notary remits the tax directly to the Receita Federal (Brazilian tax authority). Non-residents cannot receive their full sale proceeds until this withholding is completed.
If the withheld amount exceeds your actual tax liability, you can file for a refund, though this process can take several months. Conversely, if the withholding is insufficient, you must pay the additional amount owed.
Working with a qualified Brazilian tax attorney is essential to ensure proper compliance with the withholding requirements and to optimize your tax position.
Are there any exemptions, discounts, or reductions that overseas buyers can qualify for?
Foreign buyers have limited access to tax exemptions and discounts in Brazil's real estate market.
The main residence capital gains exemption, which allows Brazilian residents to avoid capital gains tax when reinvesting proceeds in another home within 180 days, typically does not apply to non-residents. This exemption is generally reserved for Brazilian tax residents.
- First-time buyer discounts: Some notaries offer minor fee reductions for first-time buyers, though foreign nationals should not expect significant savings
- Municipal IPTU discounts: Certain cities provide IPTU reductions for energy-efficient properties or senior citizens, but these rarely apply to foreign owners
- Rural property exemptions: Some agricultural land purchases may qualify for reduced ITBI rates, though this applies mainly to working farms
- Development incentives: Properties in designated development zones may receive temporary IPTU reductions, available to all owners regardless of nationality
- Historic property benefits: Restored historic properties in some cities qualify for IPTU reductions, typically lasting 5-10 years
Most tax benefits in Brazil are designed for residents and citizens, making professional tax advice crucial for foreign buyers to identify any applicable opportunities.
How are property taxes typically paid in Brazil—monthly, quarterly, or annually?
Brazilian property taxes are structured as annual obligations, but payment methods vary by tax type and municipality.
IPTU (annual property tax) is assessed yearly but can usually be paid in several ways: as a single annual payment (often with a 5-10% discount), in monthly installments over 10-12 months, or quarterly in 3-4 payments.
São Paulo allows IPTU payment in up to 10 monthly installments starting in January, with a 7% discount for full annual payment by January 31st. Rio de Janeiro offers similar installment options with a 6% discount for annual payment.
Rental income taxes for non-residents must be paid monthly by the 20th of the following month. Capital gains tax is due within 30 days of the property sale completion.
Most property owners choose monthly IPTU installments to manage cash flow, especially for investment properties where rental income can cover the tax payments throughout the year.
What extra costs should I budget for, such as legal fees, broker commissions, or maintenance charges, on top of the taxes?
Beyond taxes, foreign buyers should budget an additional 2-4% of property value for essential professional services and ongoing costs.
| Cost Type | Typical Rate | Payment Timing |
|---|---|---|
| Legal Fees | 1-3% of property value | At closing |
| Real Estate Broker Commission | 5-6% (usually seller pays) | At closing |
| Property Survey/Inspection | R$2,000 - R$8,000 | Before purchase |
| Translation Services | R$1,500 - R$4,000 | During process |
| Monthly Condo Fees | R$300 - R$2,000+ | Monthly |
| Property Management | 8-12% of rental income | Monthly |
| Insurance | 0.1-0.3% annually | Annual |
Legal representation is strongly recommended for foreign buyers and typically costs 1-3% of the property value. A qualified Brazilian real estate attorney will handle due diligence, contract review, and ensure compliance with foreign ownership regulations.
Condominium fees (taxa de condomínio) for apartment buildings vary widely based on amenities and location. Luxury buildings in São Paulo or Rio de Janeiro can charge R$1,000 to R$3,000 monthly, while standard buildings typically charge R$300 to R$800 monthly.
It's something we develop in our Brazil property pack.
Property management services, if you're buying for investment, typically charge 8-12% of gross rental income and handle tenant relations, maintenance coordination, and tax compliance for foreign owners.
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.
Foreign buyers should budget 5-10% of property value for total purchase costs when buying real estate in Brazil, including ITBI transfer tax, notary fees, and legal expenses.
Annual ownership costs include IPTU property tax (0.3-1.5%), condo fees, and potential property management services, while rental income faces 15% taxation and capital gains are taxed at 15-22.5% upon sale.
Sources
- Reddit - Buying Property as a Foreigner
- Oliveira Lawyers - Real Estate Closing Costs Brazil
- Oliveira Lawyers - Registration Taxes
- Exclusive Realty Brasil - Expenses Requirements
- Where in Rio - Property Guide for Foreigners
- Latin Exclusive - Investing in Real Estate Brazil
- The LatinVestor - Can Foreigners Buy in Brazil
- Oliveira Lawyers - Tax Filing Brazil