Tax reform: change could increase taxation for the real estate sector

At the hearing, data from a study was presented that shows that the tax burden applied today in construction and development is 7.8%. Even with a 40% reduction, already foreseen in the current text, the tax burden for the sector would rise to 10.9%, a change that could further aggravate the country’s housing deficit — which currently stands at 7 million homes, according to the president of the Brazilian Chamber of Construction Industry (Cbic), Renato de Sousa Correia.

So that the sector does not feel the impact, a greater reduction — of 60% — would be enough to keep the tax burden at the same current rate, of 7.8%. In the case of rent, the text provides for a 60% reduction, but this number should be 80% to also absorb the impact and not affect taxation on leases.

Rentals

The rapporteur of the matter in the Senate, Eduardo Braga (MDB-AM) presented IBGE data that show that the number of rentals increased significantly between 2016 and 2022 — going from 18.5% to 21.1%. According to the parliamentarian, this movement is driven mainly by young people who cannot invest high amounts in purchasing property.

Other data presented at the hearing reinforce Braga’s numbers, such as those presented by the president of the Union of Companies for the Purchase, Sale, Leasing or Administration of Residential or Commercial Properties (Secovi/SP), Ely Wertheim.

Today, anyone who buys a property to earn from leasing pays around 12% tax. The reduction foreseen by the current text of the reform is 60%, which would increase the tax burden from 12% to 20%, according to Wertheim. The rental sector demands that the reduction rate be increased to 80%, which would not resolve the issue, but would mitigate the impact of the change. In the opinion of representatives of the sector, if the change in the text does not occur, inflation on rent may increase, due to the housing deficit that may exist.

My Home, My Life

Another impact predicted by the reform, according to the president of Secovi, is on the Minha Casa, Minha Vida program. The manager claims that if the reduction for development does not increase from 40% to 60%, the properties in the program could have a 15% increase in their price.

IPTU

The text of the tax reform provides for a change to IPTU, which is a new possibility of changing the calculation base. This update, according to EC 132/23, can be done through municipal decree. The word “update”, provided for in the new legislation, may raise doubts regarding the tax, as it may mean recomposing the IPTU value due to inflation or market variations.