Do I have to pay income tax when I sell my property?
Short answer: Income tax only applies if you sell a property for more than you paid for it — that difference is called a capital gain. But there are four important exemptions: selling your only property for up to R$ 440,000, reinvesting the proceeds in another property within 180 days, properties acquired before 1969, and monthly gains up to R$ 35,000. Many property owners qualify for an exemption without realizing it.
What a capital gain is
A capital gain is the difference between the price you sold the property for and the price you originally paid (acquisition cost). If you bought it for R$ 300,000 and sold it for R$ 500,000, the capital gain is R$ 200,000. Income tax, when due, applies to that gain — not to the total sale price.
The four exemptions you need to know
1. Only property, up to R$ 440,000
If the property sold is the only one in your name and the sale price does not exceed R$ 440,000, the capital gain is exempt from income tax — provided you haven’t sold another property in the last 5 years. This is the most common exemption among sellers of residential property.
2. Reinvestment within 180 days
If you use the full proceeds of the sale to buy another residential property in Brazil within 180 days, the capital gain is exempt. This benefit can be used once every 5 years. Important: if you use only part of the proceeds, the exemption applies proportionally.
3. Property acquired before 1969
Properties bought on or before December 31, 1969 are fully exempt. For properties acquired between 1970 and 1988, a progressive reduction factor lowers the taxable gain — the older the acquisition, the lower the tax.
4. Monthly gain up to R$ 35,000
If the total gain from asset sales in a given month does not exceed R$ 35,000, the gain is automatically exempt. This exemption can apply to lower-value properties.
When income tax is due — rates
Outside of the exemptions, real estate capital gains are taxed progressively:
- Gain up to R$ 5 million: 15%
- Gain between R$ 5 million and R$ 10 million: 17.5%
- Gain between R$ 10 million and R$ 30 million: 20%
- Gain above R$ 30 million: 22.5%
How and when to pay
Capital gains tax on real estate isn’t reported in the regular annual tax return — it’s calculated and paid the month after the sale, via GCAP (the Brazilian tax authority’s official capital gains program). The deadline is the last business day of the month following the sale.
Note: late payment triggers a 0.33% daily penalty (capped at 20%) plus interest based on the Selic rate (Brazil’s benchmark interest rate).
Practical example
An owner sells an apartment in Itacorubi for R$ 650,000. They bought it for R$ 380,000 in 2015. Capital gain: R$ 270,000. They own two other properties (so the only-property exemption doesn’t apply). They don’t plan to reinvest within 180 days. Tax due: 15% × R$ 270,000 = R$ 40,500, to be paid via GCAP by the last business day of the month following the sale.
Does Regente advise on tax matters?
No. Capital gains tax matters are the owner’s responsibility, together with their accountant. Regente guides you through the general process, but calculating the tax requires specialized accounting or tax advice.
Related questions
- What is the real estate agency’s commission on a property sale?
- How does the property sale process work at Regente?
- What is ITBI, and who pays it?
Thinking of selling and want to understand the total costs? Talk to a Regente agent.