Real Estate Taxes & Costs

When you buy or sell property in Brazil, the taxes and closing costs are not something you have to research, calculate, or wire on your own. As part of our real estate representation, we handle this side of the transaction from start to finish. We work out exactly what is owed, advise you on how to budget for it, coordinate moving your funds into Brazil, and pay each tax and fee to the correct authority at the correct time, whether you are the buyer or the seller. The summary on this page explains the main items so you know what to expect. For a full, itemized breakdown of every cost, see our detailed guide, Taxes and Costs in Brazilian Real Estate Transactions.

If you’re thinking about investing in real estate in Brazil, you have probably started your research already. There are many factors which should be taken into consideration. The location of your investment, the cost of housing in the area, and Brazil’s overall economy are probably all factors you’ve been tossing around in your mind. While these are all important factors to consider, your commitment to making a sound investment might cause you to forget one of the most important considerations in property investments.

The initial cost of your investment will not only be the price of the actual property. You’ll also need to take taxes and closing costs into consideration, and these differ from the ones you might be used to in the United States.

What We Take Care of for You

Most of our clients are abroad when they buy or sell in Brazil, often in a different time zone and without a Brazilian bank account. The taxes and fees below have to be calculated correctly, paid in the right order, and paid to the right office, or the deed cannot be signed and the property cannot be registered in your name. That is the part we own for you:

• Calculation. We confirm the exact ITBI, notary, registry, and ancillary amounts for your specific property and municipality, rather than relying on a realtor’s estimate.
• Advisory. We tell you the full number to budget for before you commit, explain what each line is, and flag costs that are easy to miss, such as the laudemio that applies to many coastal properties.
• Moving the money. We coordinate the foreign exchange and the inbound transfer into Brazil, and we make sure the entry of funds is documented so you can send the proceeds back out of the country later.
• Payment. We pay the taxes and fees directly to the tax authorities and the registry, on schedule, and give you the receipts. You are never asked to hand money to the seller or the broker to cover these items.

Taxes & Costs

When you purchase an investment property in Brazil, there are multiple taxes & costs you may be expected to pay. The figures below are headline ranges meant to give you a feel for the cost.

• Transfer Taxes – When you complete the purchase of any property in Brazil, you will need to pay a transfer tax (the ITBI), generally 2% to 3% depending on the municipality, on the value of the property. This tax is due before the deed is registered, and it is the largest single line in your closing costs.
• Municipal Tax – Also called the local property tax (IPTU), this is a yearly tax based on the value of the property. The amount owed differs between cities in Brazil, but it might be anywhere from 0.6% to 2%. This is an ongoing cost of ownership rather than a closing cost.
• Corporate Income Tax – If you are purchasing property in Brazil to house a new business or a branch of your existing business, you will owe a corporate income tax. This tax will be equal to 15% of your profits, before a 10% surtax and the 9% social contribution (CSLL) that together bring the combined rate to roughly 34%.
• Capital Gains Tax – If you sell the property for more than you paid, you owe capital gains tax on the profit, not on the full sale price. The rate runs from 15% to 22.5% depending on the size of the gain. If you are a nonresident seller, the buyer must withhold this tax at closing.
• Tax on Rental Income – If you invest in a property in Brazil with the intention of renting it out to tenants, you will owe a tax on your rental income. Nonresident owners are generally taxed at 15% withheld at source. Resident owners are taxed on a progressive scale of up to 27.5%, usually paid monthly through the carne-leao.

You might also be expected to pay closing costs when you purchase an investment property in Brazil. The costs of closing on a property will vary from city to city, but a typical purchase usually runs about 4% to 6% of the property value in transfer tax, notary, and registry, and can reach 8% or more once legal fees, foreign-exchange costs, translations, and any coastal-land laudemio are included. The closing costs might include anything from attorney fees and recording fees to appraisal fees. For the complete checklist of what is payable and to whom, see our detailed guide to taxes and costs.

Be Aware of the Costs

Clearly, when you invest in real estate in Brazil, the upfront listed price is not the only thing you should consider. If you do not take other taxes & costs in Brazil into consideration, you could underestimate the price of your investment and find yourself making less of a profit than you originally planned for. When making an investment in Brazilian real estate, make sure you find out which taxes and closing fees might apply.

Let Us Handle the Numbers

Tell us the property and whether you are buying or selling, and we will give you a single, accurate figure for everything due at closing, then handle the calculation, the transfer of funds, and the payments so you do not have to manage any of it from abroad. If you would rather understand each line first, our detailed guide to taxes and costs in Brazilian real estate transactions walks through every item, how much it is, and when it is paid.

Be Aware of the Costs

Clearly, when you invest in real estate in Brazil, the upfront listed price is not the only thing you should consider. If you do not take other taxes & costs in Brazil into consideration, you could underestimate the price of your investment and find yourself making less of a profit than you originally planned for. When making an investment in Brazilian real estate, make sure you find out which taxes and closing fees might apply.

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