Estate Planning: How Inheritance of Property Works in Brazil

If you buy property planning to hold it for many years, or to leave it to children or other heirs, it pays to think about succession from the start. For a foreign investor, there is an extra layer: Brazilian rules may differ from those in your home country.

The rule: property in Brazil, probate in Brazil

Under the Code of Civil Procedure (art. 23), only Brazilian courts or notaries can handle probate for property located in the country. In other words, a studio in Rio, even one owned by an investor who never lived here, goes through probate in Brazil, which may run alongside the estate process in the home country. Brazilian law has rules on which country's law governs the inheritance, but in practice assets here follow Brazilian procedure and taxes.

Forced heirs: a point to watch

Brazilian law reserves half of the estate (the "legítima") for forced heirs: descendants, ascendants and spouse. A will can only freely dispose of the other half. In many countries testamentary freedom is broader, so do not assume that a will made abroad will apply to the property in Brazil without adjustments.

Probate at a notary: faster

When all heirs agree, probate can be done at a notary's office, without going to court, which is usually much faster. Since 2024, a resolution of Brazil's National Council of Justice (CNJ) allows this route even when there are minor heirs or a will, under certain conditions. Heirs living abroad can take part through a power of attorney.

Inheritance tax: ITCMD

Transfers by inheritance or gift pay ITCMD, a state tax. In the state of Rio, rates are progressive, from 4% to 8%, depending on the value. Brazil's tax reform made progressive rates mandatory nationwide and changed the collection rules for cases where the deceased lived abroad, a topic still being regulated. Confirm the calculation with a lawyer when planning.

Structures that can simplify succession

• A will in Brazil: sets out who receives the property within the limits of the forced share and avoids validating a foreign will
• Holding company: for people with more than one property, a company that owns the assets allows shares to be transferred instead of probating property by property; it has its own running costs and taxes
• Lifetime gift with usufruct: brings succession forward while the donor keeps the use or income; ITCMD is paid on the gift

Not a reason to delay buying, a reason to plan

None of this is an obstacle to buying. It is the same reasoning experienced investors use in any country: the earlier you think about the ownership structure, the simpler and cheaper succession will be in the future.

This article provides general information and does not replace individual legal or estate planning advice. The rules may involve international treaties and specifics of your home country: always consult a lawyer who specializes in inheritance and international law.

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