Tax Benefits For Real Estate Investors In Brazil

Published on September 30, 2025 and written by Cyril Jarnias

Brazil, with its vast territory, dream beaches, and dynamic economy, is attracting more and more foreign real estate investors. Beyond its tourist and economic appeal, the country also offers interesting tax benefits for real estate investors. Let’s explore together the tax opportunities that make Brazil a prime destination for real estate investment.

A local tax system favorable to investors

The Brazilian tax system, although complex, offers several advantages to real estate investors, whether local or foreign.

Attractive tax rates on rental income

In Brazil, rental income is subject to personal income tax (IRPF). The tax rate varies according to the amount of income, ranging from 0% to 27.5%. However, investors benefit from a standard 20% deduction on their gross rental income, which significantly reduces the taxable base.

Generous tax deductions

Property owners can deduct several types of expenses from their rental income, including:

• Property maintenance and repair costs
• Property and housing taxes
• Property management fees
• Real estate loan interest

These deductions allow for a significant reduction in the tax burden on rental income.

A special regime for vacation rentals

Brazil has implemented a special tax regime for vacation rentals, called “flat service.” This regime allows property owners to benefit from reduced taxation on short-term rental income, with a fixed rate of 5% on gross revenue.

Advantageous international taxation: Brazil, a tax partner of choice

Brazil has signed numerous tax treaties with other countries, aimed at avoiding double taxation and facilitating cross-border investments.

Extensive double taxation agreements

Brazil has concluded double taxation agreements with more than 30 countries, including France, Germany, Spain, and Portugal. These agreements allow foreign investors to avoid being taxed twice on their Brazilian real estate income.

Favorable tax treatment of real estate capital gains

For non-residents, capital gains realized from the sale of real estate in Brazil are subject to a fixed tax rate of 15%. This rate is relatively low compared to many other countries, making Brazilian real estate investments particularly attractive to foreign investors.

The possibility to repatriate profits

Brazil allows the repatriation of profits from real estate investments without particular restrictions, subject to compliance with reporting obligations. This flexibility is a major asset for international investors.

Local taxes: a reduced burden for property owners

Local taxes in Brazil are generally lower than in many other countries, which contributes to the attractiveness of the Brazilian real estate market.

A moderate property tax

The property tax in Brazil, called IPTU (Imposto Predial e Territorial Urbano), is calculated on the market value of the property. Rates vary by municipality but are generally between 0.3% and 1.5% of the property’s value. These rates are relatively low compared to those applied in many European countries.

No occupancy tax for property owners

Unlike many countries, Brazil does not impose an occupancy tax on owner-occupiers. This absence of tax represents significant savings for investors who choose to occupy their property part of the year.

Exemptions for new properties

Some municipalities offer temporary IPTU exemptions for new real estate properties, generally for a period of 2 to 5 years. This measure aims to encourage construction and investment in new real estate.

Brazil vs the world: an advantageous tax comparison

Compared to other popular real estate investment destinations, Brazil positions itself very competitively in terms of taxation.

Generally lower tax rates

The maximum marginal tax rate on income in Brazil (27.5%) is lower than that of many European countries, where it can exceed 40%. This difference translates into potentially higher profitability for real estate investors in Brazil.

Advantageous capital gains taxation

The fixed 15% rate on real estate capital gains for non-residents is particularly attractive. For comparison:

• In France: up to 36.2% (19% tax + 17.2% social contributions)
• In the United States: up to 20% for non-residents
• In Portugal: 28% for non-residents

Moderate transaction costs

Transaction costs related to purchasing real estate in Brazil (notary fees, registration fees, etc.) are generally lower than those applied in many European or North American countries. These reduced costs contribute to improving the overall profitability of the investment.

Conclusion: Brazil, a tax haven for real estate investment?

Brazil undoubtedly offers an attractive tax environment for foreign real estate investors. The combination of moderate tax rates, generous tax deductions, and favorable international taxation makes the country a prime destination for diversifying your real estate portfolio.

However, it is important to note that the Brazilian tax system can be complex and that rules may vary by region. Therefore, it is crucial to surround yourself with competent local professionals (lawyers, accountants, tax advisors) to effectively navigate this environment and optimize your investment strategy.

Additionally, investors should keep in mind that taxation is only one aspect among others to consider when investing in real estate abroad. The country’s economic and political stability, the growth prospects of the local real estate market, as well as the risks related to exchange rate fluctuations are all factors to take into account in the investment decision.

Nevertheless, for investors ready to explore new horizons and diversify their real estate portfolio, Brazil represents a tempting opportunity, combining high return potential and significant tax benefits.