In Brazil, property tax, or IPTU, is established by local municipalities. The amounts normally range from 0.5% to 1.5% of the assessed value. The rate also depends on the property’s location and its use.

Capital gains tax The gain is calculated on the excess of the sale price over the cost of the asset sold at a tax rate of 15%. However, for tax residents in Brazil, there are certain exemptions applicable that must be observed.

There are no provisions for Wealth Tax in Brazil. There are state and municipal taxes over real state assets and automotive vehicles, although capital gains can be subject to a minimum of 15% tax rate in Brazil.

What is IPI? Short for Imposto sobre Produtos Industrializados, which is Portuguese for Tax on Industrialized Products, IPI is a federal tax that is applied to all national and foreign products that have been modified in some industrialized way for consumption or use.

Sales Tax Rate in Brazil remained unchanged at 17 percent in 2021 from 17 percent in 2020.

Property tax is defined in Brazil as an annual tax on urban land and buildings (Imposto sobre a propriedade predial e territorial urbana – IPTU). There are other taxes on real property, such as the Tax on Real Estate Transfers (ITBI) and a Tax on Rural Land (ITR), which is administered at central government level.

Which countries are considered tax havens by Brazil? Brazil issued a list of tax-favored countries or “tax havens” in June 2010, through Normative Instruction N°1045 published by the Receita Federal Do Brasil or Federal Revenue of Brazil (RFB). The demonstration of having a maximum general income tax rate of 17%.

Individuals who are tax residents in Brazil are subject to federal income tax. Brazilian income tax rates for individuals are progressive and range from 7.5% to 27.5% for those liable to taxation. The minimum and maximum of each tax rate level is subject to changes each year.

Resident individuals are taxed on their worldwide income. Non-residents are taxed only on income from Brazilian sources. Non-residents of a non-treaty country are liable for a flat rate 25% tax on their income earned in Brazil (no deductions are allowed).

Social Contribution on Net Income (CSLL) All legal entities are generally subject to CSLL at the rate of 9% (except for financial institutions, private insurance, as well as certain other prescribed entities, which are taxed at the rate of 20% since March 01, 2020), which is not deductible for IRPJ purposes.

For residents Brazil has a progressive personal taxation system up to a maximum of 27.5%. Nonresidents’ rental income from Brazilian real estate is taxed at 15% of the gross rent unless they are resident in a low tax country, these are defined as nations that impose no tax on income or impose a corporate tax rate of less than 20%.

In the last seven years Brazil has enjoyed unrivalled property price gains, but the nation was starting from a point of significant undervaluation.

Non-residents can own clear title to real estate in Brazil, and foreign nationals with residency in Brazil can own farmland: an increasingly popular approach offering broad potential for investment returns.

The fundamentals supporting Brazilian real estate’s sustainable position include massive local demand from a large middle class, an advancing tourism market, and the fact that the huge gap between rich and poor is very slowly being bridged, driving up costs for land and real estate naturally over time.