Capital gains exemption: reinvest within 180 days

The rule

Article 39 exempts the gain earned by an individual resident in Brazil on the sale of residential properties, provided the seller, within 180 days counted from the date of the contract, applies the sale proceeds to the purchase of residential properties located in Brazil. The Receita Q&A 2026 (question 575, item 6) adds the following readings:

• The count of 180 days includes the day of the contract.
• If several properties are sold, the 180 days run from the contract of the first sale.
• The choice is irrevocable and must be reported in the capital gains statement (Demonstrativo da Apuração dos Ganhos de Capital) of the annual return.
• The benefit can be used once every five years, counted from the contract of the sale that used it, or the first of several sales.
• Brokers’ fees paid by the seller are not part of the proceeds that must be reinvested.

Partial reinvestment

If the proceeds are only partly reinvested, article 39, paragraph 2, taxes the gain “proportionally to the value of the portion not applied”. If more than one property is bought, the exemption covers only the share of the gain matching the amount used for residential properties (paragraph 3).

Calculation, not an official figure: a sale price of R$ 1,000,000 with a gain of R$ 300,000, of which R$ 600,000 is reinvested in a residential property within the deadline. The reinvested share is 60%, so the taxed share of the gain is 40%, or R$ 120,000, before any reduction factor. The taxed share then follows the usual chain in capital gains tax on property.

What counts as a residential property

The Receita defines a residential property as a unit built in an urban or rural area for residential purposes, according to the building rules of the locality. The exemption applies in these cases (Q&A 575):

• A swap of residential properties, including with a cash balance.
• The sale or purchase of a residential property under construction or “off plan”, meaning a future unit sold under the incorporation law (see buying off-plan in Brazil).
• A sale whose proceeds pay off, in whole or in part, the remaining debt on a residential property in Brazil that the seller already owns, even if it is under construction.
• A sale of a share in a condominium property followed by the purchase of a private property, and the reverse (Q&A 578), or the purchase of a co-owner’s share in a property one already shares (Q&A 579).
• A resale and repurchase of the same residence within 180 days, if the repurchase is documented (Q&A 598).
• Use of a real estate consortium credit letter within the 180 days to buy the residence (Q&A 580).

It does not apply to:

• Selling a residential property to use the money to build another property, or on improvements or renovations of properties already owned (Q&A 576).
• The sale or purchase of land, even with an approved building permit and plans (Q&A 577).
• The purchase of only a parking space or storage box.
• A loan between private persons not tied to the instrument of acquisition, when the proceeds repay it (Q&A 581).

If you miss the deadline

If the conditions are not met, the tax is demanded on the gain with default interest, and a fine. Under article 39, paragraph 4, interest runs from the second month after receipt, and the Receita (Q&A 580) states that the fine applies if the tax is not paid within 210 days of the contract, that is the 180 days plus 30. The gain is then taxed in full, so keeping the dates of the contract, the payments and the new deed matters. A purchase that falls just outside the 180 days does not qualify.

How it interacts with other rules

• The single-property exemption is separate; a seller may qualify under one or the other.
• Receipts and purchases by instalments have special rules in the Q&A (question 575): the exemption applies to the sums received and used within the 180 days, counted from the first sale contract.
• Gains and losses from different sales in the same month cannot be netted (Q&A 583).
• The Receita’s GCAP program calculates the exemption and generates any payment slip due on the taxed portion. Use it to run the case rather than estimating by hand.

Which professional to consult

An accountant can build the timeline and the GCAP declaration. A lawyer registered with the OAB can check a swap or a purchase through an incorporation. Professionals are checked by the reader on their official registers.