You sold — or are planning to sell — a property. You know there’s a tax on the profit. But exactly how much will you pay? Most people assume it’s 15% of the difference between the purchase price and the sale price. That calculation could be off by tens of thousands of reais.
This guide covers the complete logic of capital gains tax: what is taxable, the four exemptions in effect in 2026, and the reduction factors that decrease the taxable base according to holding period — factors that almost nobody knows about until they see it on the Receita Federal bill.
Did you inherit a property? The tax situation is different — and more complex. See the specific guide: The Inheritance Trap: How ITCMD Can Cost R$ 50,000 More on Property Sale.
What is capital gains on a property sale
Capital gains is the profit you make by selling an asset for more than you paid. In Receita Federal language, the basic formula is:
Capital Gain = Sale Price − Acquisition Cost
Acquisition cost is not just the price you paid. It can include:
- Deed and registration costs (ITBI, notary fees)
- Documented improvements and renovations with invoices
- Real estate commission paid at original purchase (if documented)
- ITCMD paid in case of inheritance
The higher the acquisition cost, the lower the capital gain. Keeping all documentation of expenses linked to the property is legitimate tax planning.
Who must pay — and who is exempt
Not every sale generates a tax. In 2026, Receita Federal maintains four exemption scenarios:
1. Single property up to R$ 440,000
You are exempt if:
– It is your only property
– The sale price is equal to or below R$ 440,000
– You did not sell another property in the last 5 years (taxed or exempt)
The R$ 440,000 limit applies to your share, not the total property value when there is co-ownership.
2. Reinvestment in residential property within 180 days
If you use the full sale proceeds to buy another residential property within 180 days, the gain is exempt. Rules: you can only use this once every 5 years. Property purchased abroad does not qualify.
3. Property acquired before 1969
Full exemption on the gain, regardless of value or single ownership.
4. Monthly gains below R$ 35,000
Sales of any asset with monthly gain below R$ 35,000 are automatically exempt. In the real estate market, most property sales exceed this threshold.
The 15% myth: the calculation almost everyone gets wrong
“15% of the difference between purchase price and sale price.” That’s the calculation that circulates in investor WhatsApp groups, in office conversations, even on some legal websites. It’s incomplete.
Brazilian law (Law 11.196/2005) created reduction factors that decrease the taxable base according to holding period. They exist because much of a property’s appreciation over decades is purely inflationary — not real gain.
Concrete example: the mistake costs R$ 29,000
Scenario: property bought in January 2010 for R$ 300,000. Sold in May 2026 for R$ 700,000.
| Incorrect calculation | Correct calculation (with FR2) | |
|---|---|---|
| Gross gain | R$ 400,000 | R$ 400,000 |
| Reduction factor (FR2) | — | × 0.507 (16 years holding) |
| Taxable base | R$ 400,000 | R$ 202,800 |
| Tax rate | 15% | 15% |
| Tax | R$ 60,000 | R$ 30,420 |
Difference: R$ 29,580. Those who don’t know the reduction factor overestimate the tax — and in some cases decide not to sell or negotiate poorly, thinking the tax cost is higher than it actually is.
How the reduction factor works
There are two factors, applied according to holding period:
FR1 — For properties acquired between January 1996 and November 2005
Rate: 0.60% per month.
Formula: FR1 = 1 ÷ (1.0060)^m1
Where m1 is the number of months between the acquisition date and November 2005.
Property acquired in January 1997 and sold today: m1 = 107 months. FR1 ≈ 0.527. Only 52.7% of the gain for that period enters the tax calculation.
FR2 — For all properties, from December 2005 onward
Rate: 0.35% per month.
Formula: FR2 = 1 ÷ (1.0035)^m2
Where m2 is the number of months between December 2005 (or the purchase date, if later) and the month of sale.
Property bought in January 2010 and sold in May 2026: m2 = 196 months. FR2 ≈ 0.507. Only 50.7% of the gain enters the taxable base.
The GCAP program from Receita Federal applies both factors automatically — but understanding the logic helps you plan the ideal time to sell.
For properties acquired before December 2005, both factors apply multiplicatively across their respective time windows.
Table: how much you would pay in different scenarios
Property sold in May 2026 for R$ 1,000,000, acquisition cost of R$ 200,000 (gross gain: R$ 800,000):
| Tax rate | Gain range |
|---|---|
| 15% | Up to R$ 5 million |
| 17.5% | R$ 5M to R$ 10M |
| 20% | R$ 10M to R$ 30M |
| 22.5% | Above R$ 30M |
| Purchase year | Years held | m2 (months) | FR2 | Adjusted gain | Tax (15%) |
|---|---|---|---|---|---|
| 2005 (Jan) | ~21 years | 245 | 0.424 | R$ 339,200 | R$ 50,880 |
| 2010 (Jan) | ~16 years | 196 | 0.507 | R$ 405,600 | R$ 60,840 |
| 2015 (Jan) | ~11 years | 136 | 0.622 | R$ 497,600 | R$ 74,640 |
| 2020 (Jan) | ~6 years | 76 | 0.766 | R$ 612,800 | R$ 91,920 |
| 2023 (Jan) | ~3 years | 40 | 0.870 | R$ 696,000 | R$ 104,400 |
Practical conclusion: someone selling with 16 years holding pays roughly 41% less tax than someone selling with 3 years holding, with the same gross gain.
How to calculate your real estate profit: step by step
Step 1 — Gather input data
| Necessary data | Where to find it |
|---|---|
| Purchase price | Sale and purchase deed or latest IRPF declaration |
| Acquisition date | Deed |
| Sale price | Sale deed or contract |
| Sale date | Deed |
| Documented improvements | Invoices for materials and services |
| Acquisition expenses | Receipts and DARFs from the time |
| Real estate commission | Receipt or contract with the agency |
| Exemption scenario | See previous section |
Step 2 — Calculate total acquisition cost
Total Cost = Purchase price + Improvements + Acquisition expenses
| Item | Amount |
|---|---|
| Purchase price (Jan/2010) | R$ 300,000 |
| ITBIITBI — Imposto sobre Transmissão de Bens ImóveisImposto municipal sobre transferência onerosa de imóvel entre vivos. Em Florianópolis: alíquota de 2% sobre o valor declarado (STJ Tema 1.113).Ver tudo → paid at purchase | R$ 6,000 |
| Notary and registration | R$ 3,000 |
| Documented renovation (2015) | R$ 40,000 |
| Total Acquisition Cost | R$ 349,000 |
Step 3 — Calculate gross capital gain
Gross Gain = Sale Price − Total Cost − Commission paid at sale
| Item | Amount |
|---|---|
| Sale price (May/2026) | R$ 700,000 |
| (−) Total Acquisition Cost | R$ 349,000 |
| (−) Real estate commission (5%) | R$ 35,000 |
| Gross Capital Gain | R$ 316,000 |
Step 4 — Apply the FR2 reduction factor
- m2 = 196 months (Jan/2010 to May/2026)
- FR2 = 1 ÷ (1.0035)^196 ≈ 0.507
Adjusted Gain = R$ 316,000 × 0.507 = R$ 160,212
Step 5 — Calculate the tax
Tax = R$ 160,212 × 15% = R$ 24,032
Summary
| Step | Amount |
|---|---|
| Total acquisition cost | R$ 349,000 |
| Net sale proceeds (after commission) | R$ 665,000 |
| Gross gain | R$ 316,000 |
| FR2 (≈ 0.507) | ≈49.3% reduction |
| Adjusted taxable gain | R$ 160,212 |
| Tax to pay (15%) | R$ 24,032 |
Real estate profit calculator
Simulate your case with the Regente calculator: enter the purchase date and amount, additional expenses, sale date and amount, and commission. The tool applies FR1 and FR2 automatically, verifies exemption scenarios, and compares the correct calculation with the 15% myth.
How to calculate and pay (GCAP + DARF)
1. Calculate with the GCAP program
Receita Federal provides free Capital Gains Calculation Program (GCAP 2026) at gov.br/receitafederal.
In GCAP you enter: type of operation, acquisition date and amount, total cost (with improvements), sale date and amount, and any applicable exemption scenario.
2. Payment deadline after sale
The tax must be paid by the last business day of the month following the sale — do not wait for the annual tax return.
Example: property sold in May 2026 → DARF due June 30, 2026.
DARF code: 4600.
3. Declaration on annual tax return
Data from GCAP is imported to the IRPF for the following year. GCAP generates an export file that the IRPF program reads directly.
FAQ
Direct answers:
How much is the tax on property sales in 2026?
15% of the adjusted gain for most operations (gain up to R$ 5M). The tax does not apply to the total sale price, only to the profit — already reduced by holding period factors. For properties held 10+ years, the reduction factor can cut the taxable base in half.
When is it exempt from income tax on property sales?
Your only property up to R$ 440,000 (no other sale in the last 5 years); full reinvestment within 180 days in a residential property; property purchased before 1969; gain below R$ 35,000.
What is the reduction factor?
A legal discount on the taxable base that increases with holding period. For properties acquired after 2005, FR2 applies at 0.35%/month compounded. After 16 years, the taxable base drops to about 50% of the gross gain.
What is the deadline to pay tax after property sale?
By the last business day of the month following the sale. Use the GCAP program (free, available at gov.br/receitafederal) to calculate and generate the DARF (code 4600).
Can I deduct renovations from the calculation?
Yes — renovations documented with invoices are part of acquisition cost, reducing taxable gain. Keep all work invoices over the years.
Did you inherit a property and will sell it? The calculation is different: the value declared in the inventory and ITCMD paid directly affect the future tax on sale. Read: The Inheritance Trap: How ITCMD Can Cost R$ 50,000 More on Property Sale.
Regente Imóveis does not provide accounting or legal advice. This article is for educational purposes. Before any material tax decision, consult an accountant specializing in individual income tax.
Suggested internal links:
– The Inheritance Trap: ITCMD vs. capital gains on inherited property
– Family holding in 2026: when it makes sense — and when it doesn’t
– How to verify if a builder is reliable before signing
Simulate your case — free calculator
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Capital Gains Calculator
on Property Sale — 2026
Calculate the real tax considering the Reduction Factor for holding period — not just 15% of the difference.
The most common misconception: “the tax is 15% of the difference between the purchase price and the sale price.” In practice, Law 11.196/2005 created a progressive reduction factor that can cut the taxable gain in half or more — depending on holding period. This calculator shows the real tax.
Acquisition Data
Month and year of the purchase deed
Amount paid for the property (deed or latest IRPF declaration)
These expenses add to the acquisition cost and reduce the capital gain
Sale Data
Month and year of the sale deed
Total price received for the property
Standard: 6% in Florianópolis (subtracts from the gain)
Check Exemptions
If any exemption applies, there is no tax to pay. Answer the questions below:
