ITBI (Property Transfer Tax ; Transfer tax imposto sobre a transmissão de bens imóveis e de direitos a eles relativos)
Property Transfer Tax (Imposto sobre a Transmissão de Bens Imóveis – ITBI) is a tax assessed by municipalities, payable when real estate property or rights in rem to any real estate property (except those in guarantee) are transferred, or upon assignment of rights to acquisition of property, for any reason whatsoever, and in exchange for payment. For example, the rate assessed by the Municipality of São Paulo, under São Paulo Municipal Law 11.154, varies between 2% and 6%, depending on the value of the property.
ITBI is not charged when the transfer of real estate property or rights to any such property takes place to pay up the capital of a company or when resulting from any merger, consolidation, spin-off or liquidation of the legal entity, except if in any of the above mentioned cases, the acquirer’s main activity is the purchase and sale of such assets and rights.The base of calculation is over the “valor venal”, which is basicaly the value of the area plus the costs of the construction. This value is most times significant lower than the market value. Also, please nore, that not all municipalities have implemented this tax.
The tax rate is 2%.-6%