ITBI in Land Title Regularization: When an Exemption Exists and What It Costs

ITBIITBIVer tudo → in land title regularization (REURB) with exemption is one of the topics generating the most confusion among property owners in Florianópolis. The answer depends on one central variable: the regularization method chosen. Some paths eliminate the tax entirely. Others require full payment.

Law 13.465/2017 brought specific rules on taxation in urban land title regularization (REURB). Article 13, paragraph 2, prohibits any government entity from requiring taxes as a condition for registering regularization. This prohibition, however, is not a universal exemption. It protects the registration act, not necessarily property transfer.

Understanding this distinction saves thousands of reais when regularizing a property in the city. In Florianópolis, ITBI ranges from 2% to 3% on the property’s assessed value. On a property worth R$ 300,000, this represents R$ 6,000 to R$ 9,000.

ITBI in Land Title Regularization: Exemption Exists and Depends on the Method

The ITBI exemption in land title regularization is not automatic or universal, and this directly impacts the net appreciation of the property after regularization. It depends on the legal nature of the instrument used to formalize ownership. The key concept separating “with ITBI” from “without ITBI” is the distinction between original acquisition and derivative acquisition.

Original Acquisition Versus Derivative Acquisition

Original acquisition occurs when someone becomes a property owner without the right deriving from a previous owner. The link arises directly from law—not from a purchase and sale contract. Adverse possession (usucapião) and land title legitimacy (legitimação fundiária) are classic examples.

Derivative acquisition occurs when the right passes from one person to another. Purchase and sale, donation, and exchange are derivative acquisitions. In them, there exists transfer—and ITBI applies to onerous transfers.

The practical consequence is direct: original acquisition does not generate ITBI because there is no transfer. Onerous derivative acquisition generates ITBI because there exists inter vivos transfer.

Article 13, Paragraph 2 of Law 13.465: Prohibition on Requiring Taxes for Registration

Article 13, paragraph 2, of Law 13.465/2017 determines that no tax may condition the registration of titles issued in REURB processes. This rule prevents city halls from blocking registration due to unpaid IPTUIPTUVer tudo →, municipal fees, or any other pending tax.

The prohibition protects the registration act. It guarantees that the notary will register the regularization title regardless of the beneficiary’s tax situation. Taxes that may be due continue to exist—but cannot delay regularization.

Why Does Land Title Legitimacy Not Generate ITBI?

Land title legitimacy (legitimação fundiária), an instrument exclusive to REURB, is original acquisition of property. Article 23 of Law 13.465/2017 is explicit: the beneficiary acquires property directly, without it deriving from the previous holder.

This classification eliminates the tax-generating event for ITBI. Because no transfer exists from one property owner to another, the tax simply does not apply. The city cannot charge ITBI on land title legitimacy—because there is no legal basis for application.

In Florianópolis, land title legitimacy may be applied within REURB in informal urban settlements occupied by the date defined by Law 13.465 (December 22, 2016). The beneficiary receives a full property title, registrable directly at the Property Registration Office.

REURB-S: Complete Tax and Cost Exemption

Urban Land Title Regularization of Social Interest (REURB-S) goes beyond ITBI exemption. Law 13.465/2017 guarantees complete gratuity for low-income beneficiaries.

Gratuity of Registration and Notary Fees in REURB-S

The REURB-S gratuity package includes:

• ITBI: exempt (land title legitimacy = original acquisition)
• Notary fees: free (registration, notation, certificates)
• Court costs: free
• Taxes on the registration act: prohibited (art. 13, paragraph 2)
• Municipal regularization fees: exempt in most cities

In Florianópolis, REURB-S beneficiaries pay no amount to obtain the property title. The City Hall bears the costs of developing the urban project and the Federal Government compensates the notaries for free registrations.

Criteria for REURB-S eligibility follow the social interest definition: family income up to 5 minimum wages or enrollment in municipal housing programs.

REURB-E: When ITBI Applies and When It Does Not

Urban Land Title Regularization of Specific Interest (REURB-E) serves properties not meeting social criteria. Costs fall to the beneficiary—but taxation depends on the instrument used within REURB-E.

Instruments That Generate and Do Not Generate ITBI in REURB-E

Without ITBI (original acquisition):

• Land title legitimacy—even in REURB-E, the instrument constitutes original acquisition
• Administrative adverse possession—procedure within REURB equivalent to adverse possession

With ITBI (onerous derivative acquisition):

• Purchase and sale formalized within REURB-E
• Possession legitimacy converted to property (when transfer exists)

Without ITBI (other reasons):

• Donation—incurs ITCMD (state), not ITBI (municipal)
• Expropriation—not voluntary transfer

The choice of instrument within REURB-E directly impacts final cost. A real estate attorney specializing in land regularization can advise on which path reduces tax burden legitimately. For a complete view of costs, including taxes, see the guide to rates practiced in Florianópolis.

ITBI Table by Regularization Method

The table below summarizes ITBI application by method:

Adverse Possession (Usucapião): Original Acquisition Without ITBI

Adverse possession—both judicial and extrajudicial—constitutes original acquisition. The possessor acquires property by meeting legal requirements (possession, time, good faith). No transfer exists from a previous owner.

This is one reason why extrajudicial adverse possession became so popular in Florianópolis: beyond dispensing with judicial process, it eliminates ITBI.

Compulsory Adjudication and Purchase and Sale: ITBI Due

In compulsory adjudication, the buyer obtains a deed for a property already acquired by contract. The legal nature is performance of obligation to do, and courts predominantly understand that ITBI applies, since onerous transfer is the basis of the claim.

Frequently Asked Questions About ITBI and Land Title Regularization

Can the City impose ITBI on adverse possession?

No. Adverse possession constitutes original acquisition. The Superior Court of Justice and Federal Supreme Court have established that there is no ITBI tax-generating event in adverse possession, because no inter vivos transfer exists.

Can unpaid IPTU prevent registration of regularization?

No. Article 13, paragraph 2, of Law 13.465/2017 expressly prohibits pending taxes from conditioning registration of titles issued in REURB. The notary must register regardless of tax debts.

How do I know if my property qualifies for REURB-S or REURB-E?

Classification depends on family income and municipal classification of the informal settlement. In Florianópolis, City Hall defines REURB-S and REURB-E perimeters by municipal decree, per socioeconomic survey of the area.

Does ITBI apply to the first transfer after regularization?

Yes. The ITBI exemption protects the regularization act itself. When the regularized property owner sells the property to a third party, the onerous transfer generates ITBI normally. In probate proceedings, the applicable tax is ITCMD, not ITBI.

Can I installment ITBI in Florianópolis?

Yes. Florianópolis City Hall offers ITBI installment plans of up to 12 installments. Conditions vary by amount and current policy of the Finance Department.

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