Real Estate by Receita Federal: an opportunity to pay less tax

With the publication of Normative Instruction No. 2222 by the Federal Revenue Servicea new opportunity has arisen for property owners.

The measure allows the value of real estate to be updated to market value, giving taxpayers the chance to pay a reduced tax on the difference in value. This update is allowed up to December 16, 2024It offers a benefit to those who want to adjust the value of their assets and pay less tax in the future.

How does updating the value of real estate work?

The measure allows individuals and companies to choose to update the value of their property to market value and pay a reduced tax on the difference between the acquisition cost and the updated value. Currently, income tax rates vary from 15% to 22.5% on capital gains from the sale of real estate. With the new instruction, individuals who opt for the update will pay a definitive rate of 4% on this difference.

Legal entities, on the other hand, will be able to update the value of the properties in their non-current assets, paying 6% income tax on Corporate Income Tax (IRPJ) and 4% of Social Contribution on Net Income (CSLL), totaling 10%. Without the update, the total tax rate for these companies could reach 34% on capital gains.

Who should opt for this upgrade?

This update is particularly interesting for those who wish to sell their property in the future, as the value update reduces the incidence of capital gains tax. In addition, if the property is sold within 15 years of the update, the calculation of the capital gain will be adjusted in proportion to the time elapsed since the update. The percentage starts at 0% for disposals up to 36 months and gradually increases to 100% after 180 months.

Avoid income tax mistakes!

Capital Gain Calculation Worksheet

Download for free

Step-by-step update

If you want to join the update, you need to fill in the Declaration of Option to Update Real Estate (Dabim)which will be available in the Virtual Service Center (e-CAC) on the Internal Revenue Service. Properties in Brazil and abroad can also be updated, including those declared in the Declaration of Assets and Rights Abroad (Abex). This update is optional, but it is an opportunity that offers greater transparency and efficiency in the declaration of assets.

Advantages of upgrading

• Tax rate reductionBy paying the 4% rate now, homeowners avoid paying between 15% and 22.5% when the property is sold.
• Valuing HeritageUpdating the value of the property to market value reflects the taxpayer's real assets, facilitating future negotiations.
• Transparency and securityThe update avoids future adjustments in the event of the property being sold, providing greater security for the taxpayer.

Care and evaluation before opting for an upgrade

Although the opportunity is advantageous for many, it is important for taxpayers to consider a few points:

1. Financial PlanningEvaluate whether paying the 4% rate now is more advantageous than waiting until the time of sale.
2. Specialized ConsultingConsider consulting an accountant or tax specialist to understand all the impacts of the update on your tax situation.
3. Immediate Update vs. FutureIf you don't intend to sell the property soon, analyze whether the upgrade is really worthwhile or whether you can wait.

Read more about: Sales tax discount: impacts of the Tax Reform

Conclusion

Updating the value of real estate to the market price is an advantageous measure that can provide significant tax savings and increase transparency in the declaration of assets. With the possibility of paying less tax and reflecting the real value of their assets, property owners have an excellent opportunity to prepare for future real estate transactions.

For those looking for specialized support when carrying out this update, the CLM Controller offers all the support you need to carry out the process correctly, avoiding errors and ensuring that you make the most of the benefits of this new measure from the IRS.

Maximize your benefits with

Holdings

Request a free consultation