ITBI charges linked to IPTU still cause inconvenience to taxpayers

The decision of the Superior Court of Justice (STJ) of 2022, which defined that the calculation basis for charging the Real Estate Transfer Tax (ITBI) could not be linked to the value of the Urban Property and Territorial Property Tax (IPTU ) still generates disputes. When carrying out a property purchase and sale transaction, lawyer specializing in tax law Renato Gomes says that, unfortunately, taxpayers are still surprised by the ITBI charge linked to the IPTU value.

“There are many city halls that have still sought to charge based on the IPTU value. And, many times, the taxpayer has to resort to looking for a lawyer and taking legal action to have their right guaranteed to pay the amount that was actually negotiated”. It still continues.

“What often ends up happening is that even though the city hall has an attitude that is illegal, I would also say unconstitutional, it ends up receiving this amount illegally due to circumstantial situations on the part of taxpayers, who give up simply saying, ‘ah, okay , I will pay’. People will complain, but they will end up paying”, he laments.

According to Gabriel Campos Lima, who is also a lawyer specializing in tax law, currently this decision still prevails and city halls need to follow what was established by the STJ.

“Despite some appeals filed with the Federal Supreme Court (STF), the decision is still valid. The topic is not over yet, but it continues with this same decision that recognizes the need to apply the real value of the real estate transaction as the basis for calculating the ITBI”, he explains.

STJ decision

According to lawyer Gabriel Campos Lima, the STJ’s decision is also valid for any ITBI payments over the last five years that the city hall has charged at a higher value than that declared by the taxpayer.

“Although the process did not end with the decision, today it is valid and applies to all taxpayers. This is still the decision that admits the need to recognize the value declared by the taxpayer as the real value of the operation, leaving the municipality with the need to prove that that value is unreal or fraudulent or something like that”, he informs.

As ITBI is a municipal tax and it is up to each city hall to apply and collect it, the manager tries to benefit from yet another charge, as tax lawyer Renato Gomes explains.

“What happens is that, over time, the municipal legislator, in an attempt to seek an increase in taxation, began to think that this sale value had to be the value of the property released for the purposes of calculating IPTU, which is also a municipal tax, is a tax on urban land property. It turns out that IPTU has a whole specific system”, he points out.

Rules to comply with

In the opinion of lawyer Renato Gomes, municipalities should implement what remains established by the STJ without seeking interpretations that could benefit the city hall itself.

“City councils should simply respect these decisions and only charge the amount based on the taxpayer’s declaration. If she finds that there is a significant difference in value and she does not agree with the taxpayer’s declaration, she can initiate an administrative procedure that will investigate whether this value is correct or not”, he highlights.

For the tax professional, it is necessary to have transparency in the operations carried out so that neither party is harmed.

“The city hall has the means to question this amount and arrive at the amount it understands is owed. So, that’s why city halls should respect this entire system of rules and regulations created exactly so that there would be tax justice”, she observes.