Will Individuals Pay a New Tax on the Sale or Rental of Real Estate? Understand!

Attention property owners! The new tax reform has brought important changes for individuals who sell or rent out real estate. Now, depending on the volume and frequency of these transactions, you may have to pay IBS (Imposto sobre Bens e Serviços, or Tax on Goods and Services) and CBS (Contribuição sobre Bens e Serviços, or Contribution on Goods and Services), two new taxes that replace older ones.

When does an individual pay IBS/CBS?

You will only be considered a regular taxpayer (and required to pay IBS and CBS) if:

1. Property rentals:

You received more than R$ 240,000.00 in rental income in the previous year and

You rented out more than 3 properties.

2. Property sales:

You sold more than 3 properties in the previous year and

Those properties had been in your name for less than 5 years.

3. Properties built by you:

If you sold more than 1 property built by yourself within the last 5 years.

4. Current year:

Rental income exceeding R$ 288,000.00 in the current year (even with just 1 property).

Sale of more than 3 properties, even if they have been in your name for more than 5 years.

What about short-term rentals?

If you rent out properties for less than 90 days (short-term stays), you may already be considered a service provider and be required to pay these taxes even with just 1 property.

What should you do now?

✔️ Organize your accounting documentation.

✔️ Evaluate strategies such as setting up a holding patrimonial (asset-holding company).

✔️ Talk to a lawyer to properly plan your upcoming transactions.