Segregated Development Estate (Patrimônio de Afetação)
Set out in Law 4,591/1964 (arts. 31-A to 31-F, added by Law 10,931/2004), the segregated development estate (patrimônio de afetação) creates a ring-fenced estate for each real estate development. Buyers’ receivables, the land, and the construction work are protected from…
Explanation
Set out in Law 4,591/1964 (arts. 31-A to 31-F, added by Law 10,931/2004), the segregated development estate (patrimônio de afetação) creates a ring-fenced estate for each real estate development. Buyers’ receivables, the land, and the construction work are protected from the developer’s other creditors — including in the event of bankruptcy.
Opting into this regime is optional for the developer, but advantageous for the buyer. In exchange, the development becomes subject to audits by a committee of buyer representatives and must meet transparency requirements (quarterly financial statements). The Special Taxation Regime (RET) is tied to the segregated estate — a 4% tax burden on revenue instead of conventional taxes.