In 2023, certain changes came into effect regarding the settlement of capital gains taxation.

Permanent Home Ownership

To benefit from the tax exemption, in addition to reinvesting the amount from the sale, it is necessary that the property has served as a habitual and permanent residence, proven by tax domicile, for at least the 24 months prior to the transaction. Additionally, only those who did not benefit from the exemption in the year in question or in the three preceding years are eligible to benefit from the exemption.

Secondary Housing

Another provision introduced by the Government is a temporary measure that allows the sale of a second residence or land for construction, the proceeds of which can be used to repay a loan associated with the taxpayer's or a descendant's (children or grandchildren's) first home.

There are criteria to be observed to benefit from this exemption, which can be consulted in the document that addresses changes in real estate gains.

An additional novelty concerns the exemption from taxation when a property intended for housing is sold to state entities, autonomous regions, public business entities in the housing sector or municipalities.

But after all, what are real estate capital gains?

Capital gains represent the profit obtained from the sale of an asset, i.e., the difference between the sale price and the purchase price of a given asset. This difference may be positive, constituting a capital gain, or negative (capital loss). Such transactions may involve tangible assets, such as real estate, or intangible assets, such as financial products, and are subject to tax.

According to the definitions provided by the Tax Portal, "realized capital gains or losses are understood to be gains or losses obtained through the sale of assets for consideration, regardless of the underlying cause, as well as those arising from accidental events". These events may involve tangible assets, such as real estate, or intangible assets, such as shares.

How are capital gains taxed?



Capital gains on real estate are taxed on half of the gain. For example, if someone buys a property for R$150,000 and sells it for R$200,000, the capital gain will be R$50,000. Taxes will be levied on half of this amount, i.e. R$25,000. The applicable tax rate depends on the taxpayer's income, since taxation is done through aggregation within the scope of the IRS.