Real Estate Taxes in Brazil
Property Tax
IPTU is the property tax. It’s established locally in every city, but the amounts normally go from 0.5% to 1.5% of the evaluation of asset, depending on the use of the property and its location.
Transfer Tax
ITBI stands for real estate transfer tax, based on the value of the asset or the evaluation of it. The amount is normally 2% of the base above mentioned, having to be paid in order to officially register the change of property before a notary public. To officially transfer the asset there are some other costs involved, such as the signature of a public contract and the register of the contract at a notary public, or Cartório de Registro de Imóveis (cost depends on the value of the asset).
Capital Gains Tax
IR represents the income tax. The value depends on the amount of capital gain, since the rate goes from 15% to 25%. Note that there is a new bill establishing that in every five years a tax benefit can be used for capital gain purposes. This is generally for the seller of an asset with capital gain, and the reinvestment of the value obtained toward other real estate assets until 180 days after the sale.