Brazil: capital gains tax when selling a property

The tax is on the profit, not on the price

The Federal Revenue Service (Receita Federal) calls capital gain the positive difference between the sale value of an asset and its purchase cost. An individual who has a capital gain must, as a rule, work out and pay income tax on it. On a property, the gain is the sale price, minus the brokerage you paid when selling, minus the acquisition cost (IN SRF 84/2001, art. 19).

The cost is what you paid for the property plus what the Receita lets you add, with proof: works and renovations with an approved project, small works, brokerage and ITBI paid on the purchase, deed, registration and financing interest. For a property bought from 1996 on, the cost is not adjusted for inflation (art. 8): keep the receipts.

If the sale value, without the brokerage, does not exceed the cost, there is no gain and no tax. A loss on one sale does not offset the gain on another: the Receita works out each sale separately.

Time with the property reduces the tax

Since 2005 the law gives reduction factors for the gain (Law 11,196/2005, art. 40). FR2 applies to every property: it is 1 divided by 1.0035 raised to the number of months between the purchase and the sale, and the two months at the ends both count. FR1 applies only to those who bought by November 2005: 1 divided by 1.0060 raised to the number of months between the purchase (or January 1996, if earlier) and November 2005. The gain is multiplied by the factors.

A gain of R$357,500.00 on a property bought in March 2018 and sold in October 2026, 104 months later, is multiplied by 0.6953: the base falls to R$248,581.53, and the 15% tax is R$37,287.23, or 10.4% of the gain. With the purchase in October 2014, the same gain would pay R$32,310.80: the longer you hold the property, the lower the tax.

The rates

On the already reduced base, the rate is 15% up to R$5 million of gain; 17.5% on the part between R$5 and 10 million; 20% between R$10 and 30 million; and 22.5% above R$30 million, each only on the part that falls in its band (Law 13,259/2016). On an ordinary property sale, the rate is 15%.

When there is no tax

The law exempts the gain in three situations that matter to someone selling a property:

• The only property, sold for up to R$440,000.00, with no other property sale in the last 5 years, of any kind (Law 9,250/1995, art. 23).
• Reinvestment within 180 days: you sell a residential property and put the money into buying another residential property in Brazil within 180 days of the date of the sale contract. If you invest only part, the gain is taxed in proportion to the part not invested. It does not apply to land or to building or renovating, only once every 5 years, and the option is reported in the tax return (Law 11,196/2005, art. 39).
• A property bought up to 1969: the gain is exempt. From 1970 to 1988 there is a reduction by purchase year, from 95% to 5% (Law 7,713/1988, art. 18).

How to pay and declare

The tax is paid in a Darf with code 4600, by the last working day of the month after the one in which the gain was received, separately from other income. It cannot be offset in the tax return (IN SRF 84/2001, arts. 27 and 30). In an installment sale, the gain is worked out as if it were a cash sale and the tax is paid on each installment received (art. 31). After the due date there is Selic interest and a late-payment penalty of 0.33% per day, up to 20% (art. 32).

The Receita offers the GCAP program: you enter the sale and the purchase, it calculates the tax, applies reductions and exemptions, generates the Darf and passes the data to the following year’s tax return. Whoever had a taxable capital gain in any month of the year must file a return, and so must whoever opted for the 180-day exemption (IRPF 2026, question 001).

Cases that change the sum

On an inherited or donated property, the cost and date come from the deceased’s or donor’s return, and the date is that of the succession or the donation (IN SRF 84/2001, arts. 20 and 21). If the buyer takes over your financing, the sale value is only what you actually receive (art. 19, III). For purchases before 1996, the cost is updated by a Receita table: use the GCAP.