On December 21, 2022, the São Paulo State Legislative Assembly approved Bill No. 511/2020, which reduces the ITCMD rate to 1% in cases of inheritance and 0.5% in cases of donation in the State of São Paulo. Currently, this rate is 4%.
After approval by the legislative house, the bill will be sent for the Governor’s approval, who may veto it due to the significant loss of revenue for the state.
The bill was introduced by Deputy Frederico D’Avila (União Brasil) in August 2020 as part of a package of tax reduction measures in response to the COVID-19 pandemic.
If approved, the new ITCMD rate for the state of São Paulo will favor donations in potential estate planning, considering that, with the bill’s approval, the State of São Paulo will have one of the lowest rates for this tax, as the Federal Constitution allows rates of up to 8%.
Thus, with the eventual promulgation of the law, its effects are immediate, without the need to wait for the 90-day period for the application of the more favorable rates.