The tax reform regulations should reduce the burden of taxes on Minha Casa, Minha Vida housing units, which tends to make purchasing a home cheaper for lower-income families, according to estimates by the Ministry of Finance.
High-end properties, in turn, will pay proportionally more taxes after the implementation of the new tax system.
The extraordinary secretary for Tax Reform, Bernard Appy, said on Thursday (25) that the objective of the rules is to make the system more progressive. “We are reducing the cost of popular properties and slightly increasing the cost of high-end properties,” he said.
Purchases and sales of properties carried out between individuals will not need to pay the new taxes, the federal CBS (Contribution on Goods and Services) and the IBS (Tax on Goods and Services) from states and municipalities.
The only exception is if it is found that the individual carries out purchase and sale of properties on a recurring basis, an indication that he works in the real estate sector.
The specific real estate taxation regime will be applied mainly to the sale of housing units by companies (constructors or developers).
There will be two types of adjustments to reduce the tax burden, especially for low incomes: one of them in the calculation base, the other in the rate, which will have a 20% discount.
To know the value of the tax due, companies must deduct two reducers from the sale price of the property, one adjustment and the other social. Only then will the tax rate be applied — if the Treasury’s estimates are confirmed, the charge on properties would be 21.2%.
The adjustment reducer simulates the cost of companies. As the logic of the new system is to tax only the added value, this expense needs to be deducted from the calculation base. Under the current regime, companies collect taxes, but do not recover credits related to taxes paid on their inputs.
“In order to adapt the past to the future, we created this adjustment model at the input of the model”, said the secretary.
The law provides that the adjustment reducer corresponds to the reference value of the property owned by the taxpayer on December 31, 2026. In acquisitions from January 1, 2027, the reducer will be the lowest value between the acquisition cost and the reference value.
For example, if a developer acquired land to build a residential building or a condominium, the adjustment reducer will be the value of the land.
“I bought a lot of houses and I’m going to build a building. The value I paid for all the houses will be the adjustment reducer in the incorporation. I bought a farm to make a subdivision, the value of the farm will be the adjustment reducer”, he explained Appy.
In addition, there will also be a social reduction, in the amount of R$100 thousand, applicable to the sale of new residential properties. The figure is fixed — therefore, the more expensive the property, the lower the impact of the reducer and the higher the tax charged.
Folha Mercado
Receive in your email the most important things happening in the economy; open to non-subscribers.
He gave as an example a property from Minha Casa, Minha Vida that sells for R$200,000. “Take away the value of the land, say R$50 thousand. That leaves R$150 thousand. Take away the social reducer [de R$ 100 mil], there are R$50 thousand left. Only then does the tax apply”, described Appy.
The taxpayer will have the amount of tax to be collected (in this hypothetical case, 21.2% of the R$50 thousand, or R$10.6 thousand). But the construction company will still be able to recover the tax credits collected on inputs to build the building.
The secretary said that “a very realistic hypothesis” is that the tax to be paid is zero or that companies even have additional credits to refund — that is, they will actually be reimbursed for the taxes collected on their inputs during the construction phase.
In high-end properties, the social reduction will be small compared to the sales value that serves as the basis for calculating the tax. Therefore, the charge tends to be a little higher.
“It applies to all properties, not just Minha Casa, Minha Vida. However, for the R$2 million property, [um redutor de] R$100,000 is irrelevant. For the R$200,000 property, [um redutor de] R$100,000 is a very big effect,” said Appy.
“This will make the system progressive. Popular properties will pay less tax than they pay today, and more expensive properties will pay more, but not much. [mais]”, added the secretary.
The department’s technicians estimate that the burden relief will be passed on to property prices, as the form of reduction in the calculation base will make the process more transparent, in the government’s opinion.
Furthermore, the new system provides for charging the tax “outside”, that is, on the pure price of the good or service. Today, the incidence is done “from the inside”, as the price already includes the estimated cost of taxation.
To enable the application of the adjustment reduction in property transactions, the bill provides for the creation of the CIB (Brazilian Real Estate Registry), which will bring together the reference value of rural and urban properties in the country.
It will also be valid if the property is used by companies for rent. In this situation, the reducer will be applied in fractions, at a rate of 1/360 per month.
