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Expropriation in Brazil: public utility and social interest takings, prior cash compensation, urgent possession, mediation and agrarian reform

Last verified: 2026-10-27 · Status: Stable

Any level of government can expropriate property for public utility or social interest against fair, prior compensation in cash, except for the constitutional cases paid in public debt securities: idle urban land under a compulsory use law and unproductive rural land taken by the Union for agrarian reform. The government must make a written offer the owner can accept in 15 days, mediation or arbitration may be chosen, and a declaration lapses if the taking is not agreed or filed in court within five years. Urgent provisional possession needs a deposit, of which the owner may withdraw 80 percent while disputing the price, and compensatory interest of up to 6 percent a year runs on any shortfall.

USD figures use the Banco Central do Brasil PTAX selling rate of R$5.3346 per US dollar for 27 October 2026. Conversions are for orientation only.

Key facts

Compensation standard for public utility and social interest expropriation	Fair and prior, in cash (except constitutional exceptions) CF art. 5 XXIV, as of 2026-10-27 · in force
Years after the declaration within which the taking must be agreed or filed	5 yearsDL nº 3.365/1941 art. 10, as of 2026-10-27 · in force
Days for the owner to accept or reject the offer	15 daysDL nº 3.365/1941 art. 10-A, as of 2026-10-27 · in force
Share of the deposit the owner may withdraw while disputing	80 %DL nº 3.365/1941 art. 33 § 2, as of 2026-10-27 · in force
Maximum compensatory interest on the shortfall	6 % a yearDL nº 3.365/1941 art. 15-A, as of 2026-10-27 · in force
Minimum degree of land utilization for a productive rural property	80 %Lei nº 8.629/1993 art. 6 § 1, as of 2026-10-27 · in force

The rule

1. Constitutional guarantee. The law sets the procedure for expropriation for public necessity or utility, or for social interest, with fair and prior compensation in cash, except in the cases the Constitution itself provides. Urban expropriations are paid in cash, except the sanction for idle land under a compulsory use law, paid in public debt securities redeemable over up to ten years.
Cost to do it: Compensation is owed by the expropriating authority; the owner's cost is appraisal and legal fees to contest the price.Constituição Federal of 5 October 1988, Art. 5 XXIV; art. 182 §§ 3 and 4 III, 1988-10-05 official text · verified 2026-10-27

2. Public utility takings. With a declaration of public utility, all property may be expropriated by the Union, states, municipalities and the Federal District; listed purposes include national security, public health, urban plans, subdivision for better use, industrial districts, public works and services, mining and hydro power. Taking state or municipal property needs legislative authorization unless agreed between the entities. The taking must be agreed or filed in court within five years of the decree, failing which the decree lapses and the same property can be declared again only after one year.
Cost to do it: Five year window; claims for compensation for restrictions by public acts also lapse in five years (art. 10 sole paragraph).Decreto-Lei nº 3.365 of 21 June 1941, art. 2 as amended by Lei nº 14.620 of 13 July 2023, Art. 2 caput and §§ 2 and 2-A; art. 5; art. 10 caput, 1941-06-21 official text · verified 2026-10-27

3. Offer, mediation and arbitration. The authority must notify the owner with a copy of the declaration, a plan of the property and the offered amount, stating that the owner has 15 days to accept or reject and that silence means rejection. If accepted and paid, the agreement is a title for registration. The owner may opt for mediation or arbitration with an institution registered by the expropriating body, under the Mediation Law and the Arbitration Law.
Cost to do it: Mediation or arbitration fees under the chosen institution's rules.Decreto-Lei nº 3.365 of 1941, arts. 10-A and 10-B added by Lei nº 13.867 of 26 August 2019, Art. 10-A §§ 1 to 3; art. 10-B §§ 1, 2 and 4, 2019-08-26 official text · verified 2026-10-27

4. Court case, urgent possession and deposit. In court, the defense may address only procedural defects or the price; other questions need a separate action. If the authority claims urgency and deposits the arbitrated amount, the judge grants provisional possession; urgency must be followed by a request within 120 days and cannot be renewed. The owner may withdraw up to 80 percent of the deposit even while disputing the price. Compensatory interest of up to 6 percent a year runs on the difference between the court's value and the offer, from possession, without compounding. Lawyer fees are fixed at 0.5 to 5 percent of the difference between the award and the offer.
Cost to do it: Owner can access 80 percent of the deposit early.
Example: Offer and deposit R$4,000,000; owner withdraws R$3,200,000. Court fixes R$5,000,000: the R$1,000,000 difference bears compensatory interest of up to R$60,000 a year from possession. / Offer of about US$749,822; difference of about US$187,455 with up to about US$11,247 a year of interest.Decreto-Lei nº 3.365 of 1941, arts. 15, 15-A (wording of Lei nº 14.620 of 2023), 20, 27 § 1 and 33 § 2, Art. 15 caput and §§ 2 and 3; art. 15-A; art. 20; art. 27 § 1; art. 33 § 2, 2023-07-13 official text · verified 2026-10-27

5. Agrarian reform. The Union may expropriate, for social interest and agrarian reform, rural property that does not fulfill its social function, paying in agrarian debt securities redeemable over up to 20 years from the second year after issue, with useful and necessary improvements paid in cash. Small and medium properties (up to 4 and from 4 to 15 fiscal modules) whose owner has no other rural property, and productive properties, cannot be taken. A property is productive when its degree of land utilization is at least 80 percent and its degree of exploitation efficiency at least 100 percent. Invaded properties cannot be inspected or taken for two years after vacated. The court procedure is a summary one, in which the judge grants possession to the Union on filing.
Cost to do it: Bare land is paid in long dated agrarian bonds, not cash, which lowers its present value for the owner.Constituição Federal arts. 184 to 186; Lei nº 8.629 of 25 February 1993 arts. 2, 4, 6 and 9; Lei Complementar nº 76 of 6 July 1993, CF arts. 184, 185 and 186; Lei nº 8.629 art. 2 § 6, art. 4 II and III and § 1, art. 6 §§ 1 and 2; LC nº 76 arts. 1, 5 and 6, 1993-02-25 official text · verified 2026-10-27

6. Social interest takings. Expropriation for social interest, decreed to promote a fair distribution of property or condition its use to social welfare, including putting unproductive property to use, follows Lei nº 4.132 of 10 September 1962, with the Decreto-Lei nº 3.365 procedure applied where it is silent.
Cost to do it: Cash compensation under CF art. 5 XXIV.Lei nº 4.132 of 10 September 1962, Arts. 1, 2 I and 5, 1962-09-10 official text · verified 2026-10-27

Worked example

Road project. A state declares a warehouse of public utility and offers R$4,000,000 (about US$749,822). The owner rejects it within 15 days (DL nº 3.365 art. 10-A) and the state files suit claiming urgency, depositing the offer and taking possession (art. 15). The owner withdraws R$3,200,000 (art. 33 § 2) and contests only the price (art. 20). If the court fixes R$5,000,000, up to 6 percent a year interest runs on R$1,000,000 from possession (art. 15-A).

Step by step

1. Watch official gazettes for declarations of public utility affecting your property and note the five year window.
2. Commission an independent appraisal before answering the offer.
3. Decide within 15 days whether to accept, negotiate or opt for mediation or arbitration.
4. In court, limit the defense to price and procedure and request withdrawal of 80 percent of the deposit.
5. For farms, keep productivity records above the 80 and 100 percent indices.

Common traps

Letting the 15 days run. Silence counts as rejection (art. 10-A § 1 IV).
Raising other disputes in the expropriation case. Only procedure and price may be contested (art. 20).
Unproductive farmland. It can be taken for agrarian reform and paid in agrarian bonds (CF art. 184).

Sources

← Zoning, subdivision and urban planning in Brazil: master plans, building rights, preemption, neighborhood impact studies and lot rulesIndigenous land in Brazil: constitutional protection, nullity of private titles, Lei nº 14.701 and the Supreme Court's December 2025 ruling on the time frame thesis →