Changes in ITBI may affect taxpayers

The federal government’s new proposal to anticipate the collection of the Property Transfer Tax (ITBI) – a municipal tax that falls on the buyer of a property – and start collecting the tax when signing the purchase and sale contract and no longer when registering the property at the registry office, as is currently done, does it reopen discussions that have already been pacified in the higher courts. This understanding comes from professor of labor procedural law and tax law Mateo Scudeler.

“The proposed new legal wording, by expressly providing for the possibility of charging the tax in the act of purchase and sale, modifies the understanding of the Superior Court of Justice consolidated in topic 1.113, when interpreting the current wording of the National Tax Code that this exaction , that is, this tax charge would only be due at the time of transfer of the asset, which is the registration of the transfer of ownership in the property registration”, he explains.

The change was registered in the second complementary tax reform bill, which has already been sent to the National Congress for deliberation. According to specialist lawyer Gustavo Conde, a lawyer at Vieira e Serra Advogados, the discussion about the ITBI and its calculation basis, which continues to this day, only creates even more inconvenience for taxpayers.

“The Supreme Court has already had several monocratic and collegiate decisions to rule this out, including topic 1,124 already has a decision, although it has not yet been decided. This not only exposes taxpayers to a risk, but also makes real estate business difficult, as property expectations will sometimes be taxed which did not materialize. And the tax cannot be levied on expectations, on a legal fiction. It has to focus on the effective transfer of property”, he highlights.

Consolidated decisions

In the opinion of professor of procedural labor law and tax law Mateo Scudeler, it is important to consider that the jurisprudence of the Superior Court of Justice (STJ), consolidated in topic 1.113, deals with the current wording of the National Tax Code.

“Any change in regulation, through new complementary legislation, would therefore alter the very legal basis of interpretation and standardization given by the Superior Court of Justice, which certainly interpreted the legislation currently in force, which will be different if the regulation is approved. now proposed by the federal government”, he explains.

For lawyer specialized in tax law Gabriel Campos Lima, it is necessary to be careful when proposing changes that could interfere in the lives of taxpayers, who end up being the most affected.

“Once again, the tax reform seems to be taking a step back instead of seeking simplification, instead of applying what has already been decided by the Judiciary and will end up generating more demands from taxpayers, who probably do not agree with this collection or with the moment of this collection, they will file a lawsuit, the litigation within the Judiciary will increase”, he complains.

Impact on municipalities

The National Tax System underwent changes after the approval of the Tax Reform in 2023. According to the Secretary of Finance of the Municipality of Campinas (SP), Aurílio Caiado, with the new wording, two new taxes were included on operations with goods real estate: the Tax on Goods and Services (IBS) and the Contribution on Goods and Services (CBS). To integrate these new taxes, the secretary explains that Complementary Bill No. 108/2024 proposed two relevant changes to the ITBI, a tax already levied on several real estate transactions.

According to him, the first change refers to the triggering event, which will be considered at the time of signing the act or onerous translational title of the immovable property or the real right over it. The second change concerns the calculation basis, which will be the transmission value or the reference value, whichever is higher.

“Although these proposals appear to represent a significant change in ITBI collection, in essence, they only standardize practices already adopted by several municipalities. It is worth mentioning that the two issues in question — calculation basis and moment of the ITBI triggering event — are still under discussion in the Supreme Court”, said Finance Secretary, Aurílio Caiado.

In relation to the questioned risks, the tax auditor and specialist on the subject, Cesar Saito, recalls that these proposals are still under discussion in the Chamber of Deputies and may undergo relevant changes during the legislative process, making it premature to make statements about the future of ITBI.