If you financed the purchase of a property and were paying the installments until December 31, 2023, you will need to fill out all the information regarding this loan in your Income Tax declaration.
But attention is needed, since the declaration of a property financed through Income Tax has two gotchas that can confuse the taxpayer:
- ▶️ WHERE TO DECLARE: The first is that financing must be declared in the “Assets and Rights” form, and not in the “Real Debts and Liens”.
- ▶️ VALUE TO DECLARE: The second is that the declared value has to be the amount actually paid that yearand not the market value of the property.
Experts advise that taxpayers request the debt income report provided by the financial institution and the FGTS income report provided by Caixa Econômica Federal to help fill out the declaration.
See below some common situations when filling out the financed property declaration.
Income Tax: Who must declare?
If the taxpayer purchased the property in the tax base year (2023), he needs to enter the balance of R$0.00 in the respective form in December 2022.
In the December 2023 balance, he must add up all the amounts spent on the acquisition of the property: down payment, brokerage, taxes and financing installments paid until December (including interest and embedded fees).
If the property has been financed in previous years, the taxpayer must record as a balance in December 2022 everything he has paid up until then.
In the balance of 2023, it will Add this amount to the financing installments paid over the past year.
If the buyer has used resources from the Service Time Guarantee Fund (FGTS) to purchase the property, he or she must inform the amount withdrawn in the “Exempt and Non-Taxable Income” form.
This way, he can prove that he had enough income for the purchase. The value must also be entered in the “Discrimination” field of the “Assets and Rights” form.
In the case of improvements or renovations to the property, the amount invested can be added to the total value of the asset – as long as you have proof of this. In this case, it is also necessary to describe the reform carried out.
The value of the property declared (both payment and renovations) does not change the refund or payment that the taxpayer will receive, regardless of the type of declaration. But it makes up the cost of acquiring the property.
The value is important in cases where the person decides to sell the property. In case of sale, the acquisition cost will be deducted from the sales price to provide information on any possible special gain.
Financing made by couples
In financing contracts signed by couples, it is most appropriate for the declaration of payment of installments to be made by only one of the two taxpayers.
In the declaration of the taxpayer who does not inform the assets and rights – in this case, financing –, it is necessary to detail that the common assets and rights have already been declared by the spouse or partner in the “Discrimination” field, under the code “99 – Others”.
The name and CPF of the partner must also be informed, in addition to an amount of R$0.00 in the balance on December 31, 2023.
Who is required to declare Income Tax in 2024
- who received taxable income above R$30,639.90 in 2023. The value is slightly higher than that of last year’s income tax declaration (R$ 28,559.70) due to the expansion of the exemption range since May of last year;
- taxpayers who received exempt, non-taxable or taxed income exclusively at source, the sum of which was more than R$200 thousand last year;
- who obtained, in any month of 2023, capital gain in the sale of goods or rights, subject to tax, or carried out operations on stock, commodity, futures and similar exchanges the sum of which was more than R$40 thousandor with calculation of net gains subject to tax;
- who was exempt from tax on capital gains in the sale of residential properties, followed by the acquisition of another residential property within 180 days;
- who had, in 2023, gross revenue in a higher amount to R$ 153,199.50 in rural activity (compared to R$ R$ 142,798.50 in 2022);
- who had, until December 31, 2023, the possession or ownership of goods or rights, including bare land, with a total value exceeding R$800 thousand (compared to R$300 thousand in 2022);
- who passed to the status of resident in Brazil in any month and was in this condition until December 31, 2023;
- who chose declare assets, rights and obligations held by the controlled entity, directly or indirectly, abroad as if they were held directly by the individual;
- It has trust abroad;
- Want update overseas assets.
