Countries › Brazil › Guide › 11. Real estate and land › IBS and CBS on real estate in Brazil: who is in the regime, the adjustment and social reducers, the 50 and 70 percent rate cuts and the CIB property code

IBS and CBS on real estate in Brazil: who is in the regime, the adjustment and social reducers, the 50 and 70 percent rate cuts and the CIB property code

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

The new dual VAT (IBS for states and municipalities, CBS for the Union) has a specific regime for real estate: sales, transfers of real rights, leases, brokerage, administration and construction by regular regime taxpayers. Individuals enter it only above set thresholds, such as more than R$240,000 of rent from more than 3 properties. Sales are taxed on price less an adjustment reducer tied to acquisition cost (and, for new homes and lots, a social reducer), at rates cut by 50 percent, and leases at rates cut by 70 percent; every property must get a national CIB code, and LC 227/2026 later amended some of these articles.

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

IBS and CBS rate reduction on real estate sales and other real estate operations	50 % reduction of standard ratesLC nº 214/2025 art. 261, as of 2026-10-27 · in force
IBS and CBS rate reduction on leases and rentals of property	70 % reduction of standard ratesLC nº 214/2025 art. 261 sole paragraph, as of 2026-10-27 · in force
Prior year rental revenue above which an individual with more than 3 properties enters IBS and CBS	240000 BRLLC nº 214/2025 art. 251 § 1 I, as of 2026-10-27 · in force
Social reducer per new residential property sold (as enacted, updated by IPCA)	100000 BRLLC nº 214/2025 art. 259, as of 2025-01-16 · in force
Social reducer per residential lot sold (as enacted, updated by IPCA)	30000 BRLLC nº 214/2025 art. 259, as of 2025-01-16 · in force
Date from which the adjustment reducer is attached to each property	2027-01-01 LC nº 214/2025 art. 257, as of 2026-10-27 · in force

The rule

1. Scope and who is in. Real estate operations by taxpayers that compute IBS and CBS under the regular regime are subject to the specific real estate regime. Individuals are regular regime taxpayers for: leasing, onerous assignment and rental, if in the prior calendar year revenue from these operations exceeded R$240,000 and involved more than 3 distinct properties; sales or assignments of rights over more than 3 distinct properties in the prior year; and sales in the prior year of more than 1 property built by the seller in the preceding 5 years. Exceeding those sale limits, or exceeding the rental revenue limit by 20 percent, in the current year also brings the individual in for that year.
Cost to do it: Below the thresholds, an individual owner's rents and sales stay outside IBS and CBS.
Example: Individual with rent of R$300,000 last year from 4 flats: in the regime this year. / R$240,000 is about US$44,989; R$300,000 about US$56,237.Lei Complementar nº 214 of 16 January 2025, Art. 251 caput, § 1 I to III and § 2, 2025-01-16 official text · verified 2026-10-27

2. Taxed operations, timing and base. IBS and CBS apply to sales of property (including from incorporations and subdivisions), onerous creation or transfer of real rights, leases and rentals, administration and brokerage, and construction services. A sale is taxed when the sale act takes place, which includes a promise, reservation letter with down payment or any commitment document; rent and service fees are taxed on each payment. The base is the operation value, including interest and monetary correction on installment sales; taxes and fees on the property and condominium charges are excluded from rent. Exchanges of property, except the cash difference, and security rights are not taxed.
Cost to do it: LC nº 227 of 13 January 2026 amended art. 252 § 2 I, § 5 and § 8; check the compiled text for their current wording.Lei Complementar nº 214 of 2025, Art. 252 caput and § 2 I and II; art. 254 caput and § 1; art. 255 caput, § 1 and § 2, 2025-01-16 official text · verified 2026-10-27 · changed: LC nº 227 of 13 January 2026 amended art. 252 § 2 I, § 5 and § 8, art. 258 II a and III and art. 260 caput of LC nº 214 (per the Congress normas.leg.br amendment index).

3. Adjustment reducer. From 1 January 2027 each property owned by a regular regime taxpayer carries an adjustment reducer (redutor de ajuste), used only to reduce the base when it is sold and corrected by IPCA. For property owned on 31 December 2026 its initial value is the updated acquisition value or, at the taxpayer's option, the reference value the tax authorities will publish on Sinter; for property acquired from 1 January 2027 it is the acquisition value. The reducer passes to a buyer that is also a regular regime taxpayer and is extinguished otherwise.
Cost to do it: Documenting acquisition costs well before 31 December 2026 sets a higher reducer and a lower future base.Lei Complementar nº 214 of 2025, Arts. 256, 257 and 258 I and § 1, 2025-01-16 official text · verified 2026-10-27

4. Social reducers. On the sale of a new residential property or residential lot by a regular regime taxpayer, a social reducer of R$100,000 per new home and R$30,000 per lot (amounts as enacted, updated monthly by IPCA since publication) is deducted from the base after the adjustment reducer, once per property. Residential leases also have a social reducer per property under art. 260, whose caput was amended by LC nº 227 of 2026.
Cost to do it: Reduces the base for new homes and lots; see the compiled text for the current residential lease reducer.Lei Complementar nº 214 of 2025, Art. 259 caput and §§ 1 to 3; art. 260, 2025-01-16 official text · verified 2026-10-27

5. Rate cuts. IBS and CBS rates for real estate operations are reduced by 50 percent, and for leases, onerous assignments and rentals of property by 70 percent. Residential stays of up to 90 days follow the hotel services rules instead (art. 253).
Cost to do it: Pay 50 percent of the standard IBS and CBS rates on sales and 30 percent on leases; the standard rates are set as reference rates under the reform timeline.Lei Complementar nº 214 of 2025, Art. 261 caput and sole paragraph; art. 253, 2025-01-16 official text · verified 2026-10-27

6. Developers and construction. In incorporations and subdivisions, IBS and CBS on unit sales are due on each payment; the seller offsets credits on inputs, and surplus credits can be refunded into the account of the segregated estate (patrimônio de afetação) during the project. Each construction project, incorporation or subdivision is computed separately under its own CNPJ or CPF registration as a distinct cost center, and the work receives a cadastral identification.
Cost to do it: Project level accounting and invoices tagged with the work's registration number.Lei Complementar nº 214 of 2025, Arts. 262, 269 and 270, 2025-01-16 official text · verified 2026-10-27

7. CIB national property code. All urban and rural properties must be registered in the Cadastro Imobiliário Brasileiro (CIB), part of Sinter, which must appear on all municipal construction documents. Federal bodies, notaries and registrars and state capitals had 12 months to adapt their systems, and state bodies and other municipalities 24 months. Joint acts may impose reporting duties on notaries, registrars and commercial boards.
Cost to do it: No fee set in the law.Lei Complementar nº 214 of 2025, Arts. 265, 266, 267 and 268, 2025-01-16 official text · verified 2026-10-27

Worked example

New home sale by a developer (base only). A developer sells a new flat for R$800,000 (about US$149,964). Its adjustment reducer for the unit, built from land and construction costs, is R$500,000; the social reducer of R$100,000 (as enacted, before IPCA updates) also applies. The base is R$800,000 less R$500,000 less R$100,000 = R$200,000 (about US$37,491), taxed at 50 percent of the standard IBS and CBS rates (LC nº 214 arts. 258, 259 and 261), due as each installment is received (art. 262).

Step by step

1. Test each individual owner against the art. 251 thresholds every year.
2. For property held at 31 December 2026, assemble acquisition and improvement records, and decide whether to use the updated cost or the official reference value as the initial adjustment reducer.
3. Developers: set up project level registrations and cost centers (art. 270).
4. Track the CIB code of each property.
5. Read the compiled LC nº 214 for the provisions amended by LC nº 227 of 2026 before pricing deals.

Common traps

Signing a promise counts as the sale. The taxable event happens at the commitment, including a reservation letter with a down payment (art. 254 § 1).
Losing the reducer on a sale to a non taxpayer. It is extinguished unless the buyer is a regular regime taxpayer (art. 257 § 4).
Using outdated text. LC nº 227 of 2026 amended arts. 252, 258 and 260.

Sources

← Short term rentals in Brazil: holiday leases up to 90 days, condominium approval after the 2026 STJ rulings, tourism registration and IBS and CBSCondominiums and off plan purchases in Brazil: building rules, fees and fines, the incorporation memorial, segregated estates, delays and cancellations →