Due to the in-depth nature of the system, it is important that you consult an expert tax advisor when considering purchasing property in Brazil. Here you can obtain a brief guideline to the Brazil property tax system.
Tax is charged on worldwide income for residents of Brazil at 15%, although some foreign tax relief and credits can be allowed under specific tax treaties.
Mortgage interest is not deducted when calculating taxable rental income.
The following are exempt from capital gains tax:
Non-residents are normally subject to a flat rate of 15% on gains from property in Brazil.
Note: Various tax treaties could affect the tax rates described above.
The circulation of merchandise is subject to tax, as are transportation and communication services (ICMS). This is similar to value added taxes in other countries and is set at a rate of 18%, with more specific rates for some goods (for example, 25% on luxury goods).
Brazil has no inheritance or wealth taxes. However, some states may impose a death transfer and a donation/gift tax. For example, the state of Sao Paulo adopted an inheritance and gift tax from 1 January 2001.
Privately owned offices called Cartórios provide notary services as well as registers of real estate deeds. These cartórios charge from a few cents for simple certified copies to thousands of Realis (R$) for property deeds.
Included in the fees charged for real estate transfers are transfer taxes which vary from 4-5% of the declared value. Cartórios are also responsible for the registration of births, marriages and deaths.
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