Taxes for Non-Residents: IPTU, Rental Income and Capital Gains

After sorting out documents, currency exchange and the property, there is one question every investor from abroad asks: how much tax will I pay in Brazil? The answer depends on the stage (buying, renting or selling), and it is worth understanding each one before closing, so that your projected return is your net return.

On purchase: ITBI

ITBI is the municipal transfer tax, paid by the buyer. In Rio de Janeiro, the rate is 3% of the property value, the same for Brazilians and foreigners. Some buildings converted to housing downtown are exempt under the Reviver Centro program (see Reviver Centro: what it is and how it works).

While you own it: IPTU

IPTU is charged every year by the city on every urban property, with no distinction between Brazilian and foreign owners. The amount depends on the neighborhood and the property, and it is usually one of the most predictable costs of owning a studio.

On rent: 15% withheld at source

When the property generates income (long-term, corporate or short-term rental), that income is taxed in Brazil. For non-tax-residents, the rule differs from residents:

• Flat 15% rate (25% for tax haven residents), without the progressive table used for residents
• Withholding at source: the tax is paid by a representative resident in Brazil or by the rental manager, in the month the rent is received
• No annual tax return in Brazil for this income

Some expenses paid by the owner may reduce the tax base, under Federal Revenue rules. If your country has a double taxation agreement with Brazil, tax paid here may be credited there: check with an accountant.

On sale: capital gains

When you sell, the difference between the sale price and the purchase cost pays capital gains tax, with progressive rates by profit bracket: 15% up to R$ 5 million, 17.5% up to R$ 10 million, 20% up to R$ 30 million and 22.5% above that (25% for tax haven residents). When the seller lives abroad, the buyer (or the seller's representative) is responsible for withholding and paying the tax.

So keep all purchase documents from day one, including the exchange contract for the original transfer: it is what proves how much you invested.

What changes with the tax reform

Brazil's consumption tax reform (Complementary Law 214/2025) creates two new taxes, IBS and CBS, which will also apply to rentals from 2027. For individuals, it only applies to those with more than three rented properties and rental income above R$ 240,000 a year, with a reduced rate for rentals. Owners of one or two studios are, in most cases, not affected.

This article provides general information and does not replace individual tax advice. Rates and rules for non-residents can change: always confirm current conditions with an accountant before buying, renting out or selling property in Brazil.

Frequently asked questions