Recently, Law No. 14.973/2024 was enacted, offering property owners the opportunity to update the value of their assets to market prices, resulting in lower tax costs for future sales or transfers. This measure is part of the fiscal compensation package for the payroll tax exemption of 17 sectors of the economy and municipalities, with a projected impact on 2024 tax revenue.
The update, available until December 16, 2024, allows individuals and legal entities to voluntarily regularize the value of their properties by paying taxes at reduced rates on the difference between the purchase price and the new market value.
Conditions and Benefits
- Individuals: The Income Tax rate will be reduced to 4% on the appreciation of the property, whereas the original rate ranges from 15% to 22.5%.
- Legal Entities: Companies may pay 6% in Corporate Income Tax (IRPJ) and 4% in Social Contribution on Net Profit (CSLL) on the appreciation, instead of the usual 34% rate that applies to profits from real estate sales.
Owners must choose to update and pay the tax within 90 days, even if they do not plan to sell the assets immediately. The advantage of this measure is a lower tax payment at the time of sale, depending on the time elapsed since the value update.
Long-Term Impact The tax benefit will be greater the longer the property is held before being sold. If the property is sold after 15 years from the update, the owner will be able to take full advantage of the tax reduction. The progressive discount on capital gains begins to apply after 36 months from the update and increases up to a 180-month period, according to the table below:
| Up to 36 months | 0% |
| Between 36 and 48 months | 8% |
| Between 48 and 60 months | 16% |
| Between 60 and 72 months | 24% |
| Between 72 and 84 months | 32% |
| Between 84 and 96 months | 40% |
| Between 96 and 108 months | 48% |
| Between 108 and 120 months | 56% |
| Between 120 and 132 months | 62% |
| Between 132 and 144 months | 70% |
| Between 144 and 156 months | 78% |
| Between 156 and 168 months | 86% |
| Between 168 and 180 months | 94% |
| After 180 months | 100% |
Procedures for the Update The Federal Revenue Service regulated the measure through Normative Instruction No. 2,222, published on September 20, 2024. From September 24, 2024, taxpayers can carry out the update through the Declaration of Option for Real Estate Value Update (Dabim), available on the Federal Revenue Service’s e-CAC system.