What taxes are involved in purchasing a property?
Purchasing a property is one of the most significant financial decisions anyone can make — and right at the beginning of that journey, the following taxes involved in purchasing a property.
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In a country like Brazil, where the tax burden directly impacts negotiations, understanding each rate clearly is as important as choosing the right neighborhood or analyzing the apartment's floor plan.
In this article, we will address in a clear, objective, and in-depth manner the taxes that are part of real estate transactions.
You'll understand what the mandatory costs are, who pays what, how to save money and avoid unpleasant surprises.
Summary:
- What are taxes on real estate acquisition?
- Most common taxes and how they are calculated
- Regional differences and legal updates
- How Taxes Impact Your Budget
- Practical tips for saving with tax intelligence
- Conclusion and frequently asked questions
Understanding the role of taxes in real estate acquisition
When purchasing real estate in Brazil, the buyer is not just carrying out a commercial transaction: they are integrating into a legal and tax system that involves municipal, state, and even federal regulations.
Therefore, it is essential to understand the taxes involved in purchasing a property since the beginning of the negotiation.
This understanding isn't just a bureaucratic matter—it can be crucial in ensuring you don't exceed your budget limit and don't suffer penalties for failing to pay taxes.
This is because, in many cases, failure to pay properly can prevent the deed from being drawn up or the property from being registered.
The ITBI (Real Estate Transfer Tax) is the first tax to appear in the transaction. It is a mandatory municipal tax, required as a condition for formal registration.
In general, the rate varies from 2% to 3% on the property's reference market value, although cities like São Paulo apply exactly 3%.
This rate may seem simple, but the calculation is complex — some municipalities adopt reference sales values that are higher than market value, which increases the effective cost.
In addition to ITBI, there are notary fees that are not technically taxes, but function as mandatory public fees.
Registering the property and drawing up the deed (when necessary) are clear examples of this.
States such as Minas Gerais and Rio Grande do Sul have fee tables with fixed values that can reach 1.5% of the property price, making these costs a considerable part of the transaction.
Another relevant aspect is the Capital Gains Tax. Although it is the seller's obligation, its impact on the sale price can be reflected in negotiations with the buyer.
When the asset is sold for a higher value than the one declared at the time of purchase, the capital gain is taxed at up to 15%. If this cost is not paid in advance, it may be passed on indirectly to the new owner.
Comparison table: main taxes and charges when purchasing real estate
| Charge | Average Tax Rate 2025 | Application | Main observations |
|---|---|---|---|
| ITBI | 2% to 3% | Municipal | May vary depending on the municipality |
| Public Deed | 0.5% to 1.5% | State (registry offices) | Can be waived in financing |
| Real Estate Registry | 1% to 2% | State (registry offices) | Mandatory for legal validation |
| Income Tax on Capital Gains | 15% | Federal (for the seller) | Applies to profits from sales |
| ITCMD | 4% | State (donations/inheritances) | Applies outside of conventional purchasing |
Source: Fiscal Transparency Portal (2025)
Regional differences and important legal updates
Not all municipalities or states apply the same rules. For example, the municipality of Belo Horizonte occasionally offers ITBI exemptions for first-time homebuyers in low-income neighborhoods.
In Porto Alegre, the ITBI calculation may consider the updated market value, even if it is greater than the transaction value.
With the approval of the Legal Framework for Electronic Real Estate Registration, in force since December 2024, many notary offices began to operate digitally, which reduced deadlines and, in some cases, registration costs.
However, this reduction was not uniform: some states have not yet updated their fee tables, maintaining high values even in digital processes.
The general rule is simple, but requires attention: the buyer must check the specific rates and obligations of their municipality and state.
Consulting a broker or notary may seem like an additional expense, but it can often prevent major problems with rejected documents and unexpected extra fees.
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How do these taxes impact financial planning?
Planning to purchase a property without considering the taxes involved in purchasing a property is a common — and dangerous — mistake.
For those who have saved for years for a down payment or have moved out of an expensive rental, the emotional impact of discovering a R$25,000 ITBI fee can be frustrating.
This is where the value of personal tax planning comes in.
In a purchase of R$ 600 thousand, for example, the buyer can spend up to R$ 45 thousand just in taxes and fees, which is equivalent to 7.5% of the total value of the asset.
This does not include costs for certificates, legal advice and bank charges in cases of financing.
For those who finance through the Housing Finance System (SFH), the public deed is replaced by the contract with the force of a deed.
This replacement can save up to R$4,000 in notary fees, depending on the state. It's a legitimate and legal savings, but few buyers know about this alternative.
The tip is simple and effective: include a safety margin of at least 8% on the property value just for tax and notary costs.
This avoids surprises and ensures financial breathing room for the first few months after moving.
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Strategies to legally reduce charges
Did you know that it is possible to legally save money in taxes involved in purchasing a propertyOne of the most common ways is to negotiate with the seller who will pay the ITBI.
Although it is customary for the buyer to pay, nothing prevents the contract from providing for another arrangement.
Another possibility is to ask the municipality to review the property's market value, especially when it is higher than the market price.
This measure is not widely publicized, but it can result in significant reductions in ITBI.
Taking advantage of municipal programs also makes a difference. In cities like Salvador, the Morar Melhor Program offers ITBI discounts for properties worth up to R$1,000,000, purchased by families earning up to three minimum wages.
Rules change frequently, so it's essential to check municipal portals and maintain contact with specialized brokers.
By using a good real estate lawyer, the buyer can also detect unfair clauses in contracts or identify applicable tax benefits.
In one of the recent cases analyzed by the Brazilian Institute of Real Estate Law (IBRADIM), a family obtained partial exemption from ITBI by proving that it was their only property and that it would be used as a permanent residence.
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Digitalization, sustainability and the future of real estate bureaucracy
A growing trend is the digitalization of notarial and tax processes.
Since 2024, with the expansion of SERP (Electronic Public Records System), it has become possible to register properties online in more than 2,000 municipalities.
This change reduced deadlines and improved cost predictability, although it did not directly reduce tax rates.
The adoption of sustainable practices in registration and financing has also influenced political decisions.
In 2025, the city of Curitiba began granting a bonus of 0.5% on the ITBI rate for properties with class A energy certification, encouraging the construction of more sustainable housing.
Conclusion: Don't underestimate hidden costs
Buying a property is a life project — but it's also a financial project.
Understand the taxes involved in purchasing a property means making conscious, strategic and economically sustainable decisions.
Every tax, every fee and every cent charged has a reason and must be treated with care.
Skipping this step is like traveling without checking if you have enough fuel: you might be able to leave the garage, but you'll hardly reach your destination without a headache.
So, research, plan, and rely on experts. The good news is that with information and preparation, burdens stop being obstacles and become just part of the journey.
Reliable sources:
Brazilian Institute of Real Estate Law – IBRADIM
Fiscal Transparency Portal (Federal Government)
Frequently Asked Questions
1. Can I finance the ITBI amount in my contract with the bank?
Some banks allow this amount to be included in the financing, but it depends on the institution's policy.
2. Is there a discount for first-time property buyers?
Yes, some municipalities offer partial or total exemption from ITBI in affordable housing programs.
3. What happens if I don't pay the ITBI?
Without proof of payment, the notary's office will not register the deed — the property will not be officially yours.
4. Is the deed always mandatory?
No, for SFH financing, the contract can replace it. Otherwise, it is required.
5. How do I know if the market value is correct?
You can consult the city hall website and, if you disagree, request an administrative review with property appraisal documents.
