The three taxes every foreign buyer needs to understand
Brazilian real estate has three primary tax events: ITBI (one-time transfer tax when you buy), IPTU (annual property tax you pay every year), and ganho de capital (capital gains tax when you sell). There's also a fourth — imposto de renda on rental income — if you operate the property.
All of them are low by international standards. The combined tax burden on a Brazilian real estate transaction is roughly half that of, say, Portugal or France, and a quarter of the UK on high-value properties. That's a real part of the country's appeal.
ITBI — the one-time transfer tax
What it is
ITBI (Imposto sobre Transmissão de Bens Imóveis inter vivos) is a municipal tax on the transfer of real estate. It's paid by the buyer at the time of purchase, before the escritura is signed at the cartório.
The rate
ITBI rates are set by each municipality, not by federal law. As of 2026:
| City | ITBI rate | On a $500K property |
|---|---|---|
| Rio de Janeiro | 3.0% | $15,000 |
| São Paulo | 3.0% | $15,000 |
| Florianópolis | 2.0% | $10,000 |
| Salvador | 3.0% | $15,000 |
| Belo Horizonte | 3.0% | $15,000 |
| Brasília (DF) | 3.0% | $15,000 |
| Búzios | 2.0% | $10,000 |
| Trancoso (Porto Seguro) | 2.0% | $10,000 |
The catch — calculated on the higher of two values
ITBI is calculated on the higher of the declared purchase price or the municipality's assessed value (valor venal). In practice, the assessed value is almost always lower than market — so most buyers pay ITBI on the actual purchase price. But on undervalued declarations, the municipality will use the valor venal.
Don't try to lowball the declared price.
"Painting" the purchase price low to reduce ITBI is illegal, common, and disastrous when you sell — your capital gain calculates against the declared purchase price, so the ITBI you "saved" comes back as 5x in capital gains tax on resale. Declare the real price.
IPTU — annual property tax
What it is
IPTU (Imposto Predial e Territorial Urbano) is the annual property tax, also municipal. It's billed once per year (or in 10 monthly installments if you elect) by the city government.
The rate
IPTU rates run between 0.3% and 1.5% of the valor venal per year, with progressive structures in most cities (higher rates on higher-value properties). On a $500K property, expect $1,500–$5,000 USD per year.
| City | IPTU range | On $500K (USD/year) |
|---|---|---|
| Rio de Janeiro | 0.6% – 1.2% | $3,000 – $6,000 |
| São Paulo | 0.6% – 1.5% | $3,000 – $7,500 |
| Florianópolis | 0.3% – 1.0% | $1,500 – $5,000 |
| Salvador | 0.4% – 1.0% | $2,000 – $5,000 |
| Búzios | 0.5% – 1.0% | $2,500 – $5,000 |
The early-payment discount
Most municipalities offer a discount (5–10%) for paying the full year's IPTU in a single up-front installment in January or February. If you have the cash, take it.
Capital gains — what you pay when you sell
The federal rate
Brazil taxes capital gains on real estate at a progressive federal rate for individuals:
- 15% on the first R$ 5M of gain
- 17.5% on R$ 5M–10M
- 20% on R$ 10M–30M
- 22.5% above R$ 30M
The calculation
Capital gain = sale price − adjusted basis. Adjusted basis includes the declared purchase price plus documented capital improvements (renovations with receipts and inscrições do CREA for the contractor). Repairs and maintenance don't count. Major renovations do.
Worked example
You buy an Ipanema apartment in 2021 for R$ 2.5M. You sell in 2026 for R$ 3.8M. You spent R$ 200K on a documented renovation in 2023.
| Sale price | R$ 3,800,000 |
| Purchase price | (R$ 2,500,000) |
| Documented improvements | (R$ 200,000) |
| Capital gain | R$ 1,100,000 |
| Federal capital gains tax (15%) | R$ 165,000 |
The home-residence exemption
If you sell your primary residence and reinvest the entire proceeds in another Brazilian primary residence within 180 days, the capital gain is fully exempt. This applies once every five years and is limited to residential property used as your primary home.
For non-residents this exemption is harder to claim — you need to demonstrate the property was your primary Brazilian residence, which usually requires having been a Brazilian tax resident during ownership.
The pre-1969 exemption (worth knowing about)
Properties acquired before 1969 have a special exemption structure (full exemption after long holding periods, decaying inflation adjustment). Almost never relevant to foreign buyers but occasionally surfaces in family-trust situations.
Rental income tax — if you're operating the property
Long-term rentals
Rental income for non-residents is taxed at a flat 15% federal rate on gross rent (some deductions allowed — condo fees, IPTU, property management fees, depreciation). Most foreign-buyer landlords pay effective rates of 8–11% of gross after deductions.
Short-term / Airbnb income
Same federal 15% rate, but municipal hospitality taxes may apply (ISS, ranging 2–5% in tourist cities) and Cadastur registration is required for property operating as short-term rentals.
The cross-border angle — what your home country charges
US persons
Worldwide income reporting applies. Brazilian rental income flows onto Schedule E. Capital gain on sale flows onto Form 8949. Foreign tax credit (Form 1116) eliminates double taxation on most income — you pay the higher of the two rates, not both. The Brazilian capital gains tax (15–22.5%) is generally creditable against US long-term capital gains tax (15–20% + 3.8% NIIT).
UK / EU persons
Most EU countries and the UK have double-tax treaties with Brazil. Treaty rates and credits vary; the UK's 2024 treaty (signed 2022, ratified 2024) provides clean credits on rental and capital gains income.
FBAR and Form 8938 (US-specific)
The property itself is not reportable. The Brazilian bank account you use to receive rent or pay condo fees is, if aggregate foreign accounts exceed $10K (FBAR) or $50K (Form 8938). Filing is essentially automatic with a competent CPA — and the penalties for missing it are brutal ($10K minimum civil penalty per FBAR violation).
Frequently asked
Do I pay tax in Brazil if I don't live there?
You pay ITBI when you buy, IPTU annually while you hold, capital gains when you sell, and 15% on rental income if you rent the property out. You don't pay Brazilian income tax on income earned outside Brazil unless you become a Brazilian tax resident.
How do I file Brazilian taxes as a non-resident?
You file an annual return called the Declaração de Bens e Direitos para Não-Residentes. Your Brazilian attorney or CPA handles this — budget $500–$1,500 per year depending on complexity.
Does Brazil tax me on the property's unrealized value?
No. There's no wealth tax or unrealized-gain tax on real estate. You only pay IPTU annually (which is tied to assessed value, not market value) and capital gains when you actually sell.
What happens at death? Is there an inheritance tax?
Yes — ITCMD (Imposto sobre Transmissão Causa Mortis e Doação) is a state-level inheritance and gift tax. Rates range 2–8% depending on the state. Rio and São Paulo are around 4%. Inheritance planning is worth doing properly — talk to a Brazilian estate attorney.
Can I claim Brazilian property tax as a deduction at home?
For US persons, yes — Brazilian rental-property taxes are deductible against Brazilian rental income on Schedule E. Property taxes on a personal-use property are no longer deductible at the federal US level (TCJA changes), but state-level treatment varies.
Need a broker to handle this end-to-end?
We match foreign buyers with vetted Brazilian brokers and attorneys in 15 city markets. English-speaking, foreign-buyer experienced, no upcharge to you.