Property owners in Brazil are bringing forward gifts of real estate as the tax reform makes progressive ITCMD rates mandatory, though the timing depends on each state.
According to Portas (Notícias), property owners in Brazil are bringing forward donations and asset reorganisations ahead of expected changes to the ITCMD, the tax on inheritance and gifts. The tax reform made progressive rates mandatory in all states, so the rate rises with the value transferred. The effect will be neither automatic nor uniform: each state legislature must approve its own rule before it takes effect. São Paulo still charges a flat 4%, while states such as Rio de Janeiro already use progressive brackets of 4% to 8%. In the São Paulo legislature, bill PL 7/2024 proposes rates of 2% to 8%, while PL 409/2025 suggests brackets of 1% to 4%, keeping the current ceiling. Citing a Metro Quadrado report, Portas notes that an increase approved in 2026 could take effect only after 90 days, and if approval comes in 2027, the higher charge could not start before 2028. Another change concerns the tax base for donations of shares in family holding companies. In São Paulo, such structures can still try to use the historical acquisition cost of the properties as a reference. A property bought for R$100,000 and now valued at R$1 million, for example, would produce a significant tax difference if market value became the basis. The São Paulo state tax authority already requires updated valuations in certain transactions, which has led to disputes with taxpayers. The trend is already visible in notary offices: Brazil recorded 185,861 property donation deeds in 2025, the highest annual volume in the series from the Colégio Notarial do Brasil, 6.5% above 2024 and 59% higher than in 2020. A direct donation of a property remains taxed in the state where it is located. Portas stresses that bringing donations forward is not a universal solution: usufruct, capital gains, notary costs, state rules, holding governance and loss of flexibility over the assets all need to be weighed, and the bills are still pending.