Taxes and Fees for Buying Real Estate in Rio de Janeiro
Acquiring a property in Rio de Janeiro involves more than just the most expensive square meter in the country. Discover in this article what are the taxes and fees for buying Real Estate in Cidade Maravilhosa.
Acquiring Real Estate requires financial planning. Buyers must pay attention to all the extra costs of 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 Rio de Janeiro, 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 consist in 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 Rio de Janeiro in 2014.
- Properties worth BRL 80,000 to 100,000 - BRL 875.38
- Properties worth BRL 200,000 to 400,000 - BRL 1,274.45
- Above this value, around BRL 114 will be added for each BRL 100,000
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 Rio de Janeiro in 2014.
- Properties worth BRL 80,000 to 100,000 - BRL 875.38
- Properties worth BRL 200,000 to 400,000 - BRL 1,270.79
- Above this value, around BRL 114 will be added for each BRL 100,000
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 studying certain property. The tax rate is based on the property’s market value, but, it is also variable from municipality to municipality.
In Rio, IPTU rate is really variable. There are several factors that may have an influence on the calculation of this rate, such as the area where the property is located and its size, but, in some cases it may even have an exemption.
This tax is also charged along with a tax for the garbage collection. Since there is no standard aliquot or average IPTU rate in Rio, the best solution is to contact the city hall to calculate the exact amount to be paid.
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 will need 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%/day, but usually consists 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%/day, but, in some cases, it may be reduced