Brazilian Taxes and fees. When purchasing a property in Brazil, expect these costs

Brazilian taxes and fees amount to a big chunk of the costs involved in a real estate transaction. This is a basic guide on those interested in buying property in Brazil and don’t know what the costs involved are.

Brazilian taxes and fees in a real estate transaction.

Brazilian property sale

The seller should expect to pay these fees and taxes:

• Real Estate Agent’s fees.  in most cases, realtors charge 5% for real estate brokerage fees.
• The Brazilian Federal Revenue charges 5% of marine tax on properties located near the shoreline. But this tax is only calculated on the part of the property located within that shoreline limit.

The buyer should expect to pay these costs:

• Property registration fees of around 1% of the property price. The buyer will pay these fees to the property registration’s office.
• ITBI (property registration tax). The city hall charges this tax. It varies depending on the municipality where the property is located. The buyer will pay up to 5% of the property value as calculated by the city hall itself.

Holding the property.

• IPTU, the city hall charges this tax on an yearly basis. Most cities charge less than one percent of the property value. In the city of São Paulo for example, the IPTU table is as follows:

For rental properties, you should pay the income tax on the rent value. This tax should be paid on a monthly basis. Your Brazilian accountant or attorney can assist you with this. Check the table for 2017:

Source: Brazilian Federal Revenue

And finally, when it is time to sell the property, you should expect to pay the capital gains tax. This tax is charged by the Brazilian Federal Revenue, and is calculated based on the tax rate of 15% on the profit made on the property. There are a few situations where the charge of this tax is waived, check with your Brazilian taxes or property law attorney to see if you are eligible for this benefit.