ITCMD in Brazil: inheritance and gift tax on property

Who sets what

• Federal Constitution (article 155, I and paragraph 1): the states and the Federal District levy the tax. For real estate, the state of the property has the power. For movable assets, the power belongs to the state of the deceased’s or donor’s domicile (since Amendment 132/2023). The Senate sets the maximum rates, and the tax “will be progressive by the value of the share, the legacy or the gift”.
• Complementary Law 227 of 13 January 2026, Book II: a national set of general rules. It entered into force on publication (article 182), with a few unrelated exceptions.
• State laws: the rates, the exemptions, the deadlines, the penalties and the forms. They differ.

I could not read the Senate resolution that caps the rate, nor most state laws, so no national rate is given here.

The national rules in LC 227/2026

• What is taxed: any asset or right with economic value acquired by inheritance or gift (article 148). The tax arises on the death, whether or not an inventory is opened (article 148, paragraph 3). For gifts it arises on the signing of the contract, even as an advance on the inheritance, on the deed for real estate, or when a usufruct is created (article 151).
• Taxpayer: the heir or legatee on an inheritance; the donee on a gift (article 157). A separate event arises for each heir or donee (article 148, paragraph 2).
• Base: the market value of the asset or right (article 152). Debts of the deceased are deducted if their origin, authenticity and existence before the death are proved (paragraph 1). For financed property or consortium assets there are special rules (article 153).
• Rates: must be progressive by the value of the share, legacy or gift, and observe the Senate’s maximum (article 156). The rate in force is the one at the date of death or the gift. The bands are applied marginally: the first band to the part falling in it, the next to the excess (paragraph 2).
• Repeated gifts: between the same donor and donee, earlier gifts within the period set by state law are added together, and the tax is recalculated with credit for tax already paid (article 155).
• Who has the power: real estate in Brazil belongs to the state or Federal District where it stands, “even if the deceased or the donor has domicile or residence abroad” (article 158, I). For movables and rights, the rule is by domicile: the deceased’s or donor’s, or, where they live abroad, that of the heir or donee, and if both live abroad, the state where the assets are located in Brazil (article 159).
• Not taxed: among other cases, a renunciation of the inheritance made without condition and without any act of acceptance, and private pension or insurance benefits (article 150).

For a foreigner living abroad, this means a Brazilian apartment inherited from a parent is taxed by the Brazilian state where it stands, regardless of the parent’s residence. See inheriting Brazilian property from abroad.

What São Paulo’s law says

The consolidated text of Lei 10.705/2000 published by the São Paulo Legislative Assembly gives:

• Rate: “4 percent on the value fixed as the base” (article 16, in the wording of Lei 10.992/2001, in effect from 1 January 2002), replacing an earlier two-band scale of 2.5 percent and 4 percent.
• Floor for real estate: the base cannot be lower than the value used for the IPTU for urban property, or the declared value for the ITR for rural property (article 13). See IPTU.
• Payment: on an inheritance, within 30 days of the court’s decision approving the calculation, and no later than 180 days from the opening of the succession (otherwise interest and penalties, unless the judge extends); on a gift, before the deed or contract is made (articles 17 and 18). Notaries must require the payment slip.
• Late payment: a fine of 0.33 percent a day, capped at 20 percent, and default interest at the Selic rate, with a minimum of 1 percent a month (articles 19 and 20).

That consolidated text lists no change to the 4 percent rate after 2001, and its last update line dates from 2015. Because the Constitution now requires progressive rates, check with the São Paulo finance secretariat whether the state has enacted a new scale. Payotte did not read Rio de Janeiro’s law (the state finance site refused the connection), so it gives no Rio rate; a rate you see on a private website is not a source.

Interaction with the income tax

A gift of money is not taxed by the income tax; the state ITCMD may apply (Receita Federal Q&A 613). A gift of property at a value above the donor’s last declared value may create capital gain for the donor; see capital gains tax. On an inheritance, the estate’s final return may choose a transfer value above the deceased’s declared value, with 15 percent on the difference (Q&A 609); see inheritance and inventory.

Which professional to consult

A lawyer registered with the OAB handles the declaration to the state and the inventory; see the property lawyer page. An accountant helps with the income-tax side. The state finance secretariat issues the payment slip.