Taxes and Fees for Buying Real Estate in Brasília
The Brazilian capital city is one of the few previously planned metropolis in the country, and it has been growing since its foundation in 1960. This article will show the main costs of buying a residential space in Brasília.
Acquiring Real Estate requires financial planning. Buyers must pay attention to all the extra costs that could arise from a transaction like this, since fees can substantially raise the amount to be paid.
The taxes and diverse costs that need to be considered when buying a property are, basically:
- Imposto Sobre Transmissão de Bens Móveis - ITBI
- Real Estate register
- Public deed
- Imposto Sobre a Propriedade e Território Urbano - IPTU
- Imposto Sobre Operações Financeiras - IOF
Imposto Sobre Transmissão de Bens Móveis - ITBI
This tax is charged over the property transfer, and is considered the largest additional expense faced by Real Estate buyers. This fee is a percentage, charged on top of the property’s value, and is variable depending on the state where the property is located.
In the city of Brasília, ITBI equals to 2% of the price of the house or apartment.
Real Estate Register
This register basically states that the property now belongs officially to the buyer. This fee does not come in the form of a percentage, like ITBI. Instead, the price is set according to the market value of the house or apartment price.
Below are some of the approximate examples of Real Estate register costs for Brasília in 2014.
- Properties worth BRL 29,270 to 34,650 - BRL 452.46
- Above BRL 34,648.12, a fixed fee of BRL 481.99 is charged
Public deed
This document might be needed, at some point, to prove that the buyer owns the house or apartment. The price of this fee is also set based on the property’s value, and it varies from state to state.
Below are some of the approximate examples of public deed costs for Brasília in 2014.
- Properties worth BRL 29,270 to 34,650 - BRL 904.99
- Above BRL 34,648.12, a fixed fee of BRL 964.05 is charged
Imposto Sobre a Propriedade e Território Urbano - IPTU
IPTU is not a privilege of those buying a property, since this tax must be paid every year, but, it must also be considered by a buyer who is studying a certain property. The tax rate is based on the property’s market value, but, it is also variable from municipality to municipality.
In Brasília, the IPTU rate calculation is relatively simple, when compared to other locations. The property’s market value is multiplied by an aliquot, that is of:
- 0.3% for residential properties
- 1% for commercial properties or properties with a building permit
- 3% for properties not built, being constructed or demolished
Some properties can benefit from a tax exemption. Most notable examples are recreational associations, sport clubs and properties of less than 120 square meters owned by someone older than 65 years old, among other conditions.
Imposto Sobre Operações Financeiras - IOF
This tax is not related directly to Real Estate sales. IOF is charged on top of financial transactions involving currency exchange, insurance operations, loans, and securities.
People coming to Brazil must have in mind that IOF tax needs to be paid whenever foreigners bring money into the country. Since this is a federal tax, the rate does not vary from place to place. Some aliquots examples are:
IOF in credit operations - maximum of 1.5% per day, but, it usually consists of a variable percentage plus an additional rate of 0.38%
IOF in foreign trade operations - maximum of 25%, but, it is usually reduced; for the payment of import services, for example, the rate is 0.38%
IOF in securities and Real Estate titles - maximum of 1.5% per day, but, in some cases, it may be reduced