ITBI, what is it, who pays and how is it calculated?

ITBI

ITBI, Real Estate Transfer Tax - what is it and how does it work?

ITBI, Tax on Transmission of Real Estate, is a tax levied by the city. The person who pays the ITBI is the person who has just bought a property.

Some cities call the ITIV tax, the Inter Vivos Transmission Tax, but it is only a nominal change, the tax is the same.

Payment of this tax normally remains with the buyer, but a different agreement can be negotiated.

Most city halls do not allow the ITBI to be parceled.

But if you are buying a property through a bank loan, you can include the payment of this tax in the installments.

However, remember that adding this amount to the financing, there will be interest charges.

But how much does ITBI cost?

As it is a city tax, the amount varies depending on the city.

  • São Paulo (SP): 3%
  • Rio de Janeiro (RJ): 2%
  • Belo Horizonte (MG): 3%
  • Recife (PE): 3%
  • Porto Alegre (RS): 3%
  • Curitiba (PR): 2.7%
  • Brasília (DF): 2.5%
  • Salvador (BA): 1% for popular properties and 3% for the rest

This percentage is charged on the total purchase price of the property.

ITBI simulation

If you buy a property worth R$500,000 in São Paulo, which has a 3% rate, the ITBI value will be R$15,000.

500,000 x 0.03 = 15,000

When should I pay ITBI?

Again, it depends on your city.

In some places you must pay the ITBI after the deed is registered, while in others the tax must be paid after the public deed is drawn up.

The deadline for paying also varies according to the municipality, but usually takes around 30 days after purchase.

It is important not to forget to pay this tax, as without it you cannot transfer the property to your name.

Special cases

The first property, acquired through the Housing Finance System (SFH), has a 50% discount on the ITBI value, in accordance with Law No. 6,941 .

Those who buy through the Minha Casa Minha Vida Program also get a discount on the ITBI, which varies depending on the municipality, family income and property value, but can reach 75%. See article 43 of Law No. 11,977.

When the transfer of property takes place by merger or incorporation of companies, ITBI is not charged.

ITBI is also not charged if the property is transferred through donation or inheritance, but in this case another tax is charged, the Tax on Transmission “Causa Mortis” and Donation (ITCMD).

Vince’s tip

When buying your property, it is important to pay attention to all expenses and plan properly, so that unpleasant surprises do not appear ahead, know all the extra expenses when buying an apartment.

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