Tax Reform: Senate Approves Reductions and Exemptions for the Real Estate Market
Senator Eduardo Braga’s (MDB-AM) opinion on the regulation of the Tax Reform brought important changes to the real estate market. The text, presented this Monday (9), benefits landlords and real estate transactions by expanding discounts on Value Added Tax (VAT) and creating new exemption bands for individuals.
Main Changes in VAT for the Real Estate Market
- Increased Discount for Rentals:
The VAT discount for rental transactions was list of china cell phone number database increased from 60% to 70%, providing greater tax relief for landlords. - Exemption for Individuals:
Individuals who earn up to R$240,000 per year from rentals and own up to three rented properties will be exempt from VAT. Landlords who exceed these limits will be subject to the tax. - Increase in Social Reduction:
The value of the social reduction for rents increased from R$400 to R$600, further reducing the tax calculation base.
Rules for Selling Real Estate
For sales, the social reduction remains unchanged in relation to the text approved in the Chamber of Deputies:
- R$ 100 thousand for construction.
- R$ 30 thousand for lots.
Additionally, individuals who sell more than three properties in the previous year or who sell properties built by themselves in the last five years will also be subject to VAT.
Other Important Changes
- General VAT Reduction:
The discount on the standard VAT rate for real estate transactions has increased from 40% to 50%. - Transition Period:
The opinion introduced transition rules for 10 tips for young doctors real estate operations already contracted, mitigating the tax impact on long-term ventures and offering greater legal certainty to the sector.
Opportunities and Challenges in the Real Estate Market
With the changes in tax reform deb directory the real estate market gains momentum to maintain its competitiveness and make business viable in a scenario of high taxation. However. The adjustments are still subject to final. Approval and will require attention from everyone involved in the market.
