Countries › Brazil › Guide › 11. Real estate and land › Real estate investment funds (FII) in Brazil: structure, 20 percent tax on distributions and gains, the individual exemption and when a fund is taxed like a company

Real estate investment funds (FII) in Brazil: structure, 20 percent tax on distributions and gains, the individual exemption and when a fund is taxed like a company

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

Fundos de Investimento Imobiliário (FII) are unincorporated funds raised through the securities distribution system to invest in real estate projects, and are the main listed route into Brazilian property. Distributions and gains on quotas are taxed at 20 percent, but distributions to individuals are exempt when the quotas trade on an exchange or organized OTC market, the fund has at least 100 quotaholders and the individual holds less than 10 percent (and related individuals less than 30 percent). A fund investing in a project whose developer, builder or partner holds more than 25 percent of the quotas is taxed like a company.

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

Withholding on FII distributions (general rule)	20 %Lei nº 8.668/1993 art. 17, as of 2026-10-27 · in force
Tax on gains from selling or redeeming FII quotas	20 %Lei nº 8.668/1993 art. 18, as of 2026-10-27 · in force
Minimum quotaholders for the individual distribution exemption	100 holdersLei nº 11.033/2004 art. 3 § 1 I, as of 2026-10-27 · in force
Stake at or above which an individual loses the exemption	10 %Lei nº 11.033/2004 art. 3 § 1 II, as of 2026-10-27 · in force
Developer or builder stake above which the FII is taxed as a company	25 %Lei nº 9.779/1999 art. 2, as of 2026-10-27 · in force

The rule

1. What an FII is. Real estate investment funds are pools of resources without legal personality, raised through the securities distribution system under Lei nº 6.385 of 1976, for investment in real estate projects; they are regulated by the securities regulator (CVM).
Cost to do it: Offering and administration costs set by the fund documents.Lei nº 8.668 of 25 June 1993, Art. 1, 1993-06-25 official text · verified 2026-10-27

2. Tax on distributions and gains. Income and capital gains distributed by FIIs on a cash basis to any beneficiary, including exempt companies, are subject to 20 percent withholding. Gains on sale or redemption of quotas are taxed at 20 percent, withheld on redemption and under the variable income rules on sales. The tax is an advance for companies taxed on real, presumed or arbitrated profit and final in other cases.
Cost to do it: 20 percent of distributions and gains unless an exemption applies.
Example: Distribution of R$100,000 to a company quotaholder: R$20,000 withheld. / About US$18,746 distributed, about US$3,749 withheld.Lei nº 8.668 of 1993, arts. 17, 18 and 19 as worded by Lei nº 9.779 of 19 January 1999, Arts. 17, 18 I and II and 19, 1999-01-19 official text · verified 2026-10-27

3. Exemption for individuals. Distributions by FIIs to individuals are exempt from income tax at source and in the annual return when the quotas are admitted to trading exclusively on stock exchanges or organized OTC markets and actually trade there. The exemption applies only if the fund has at least 100 quotaholders, is denied to an individual holding 10 percent or more of the quotas or entitled to more than 10 percent of income, and is denied to related individuals together holding 30 percent or more. New funds have 180 days from the first paid in quota to reach 100 holders.
Cost to do it: Zero tax on qualifying individual distributions; capital gains on quota sales remain taxed at 20 percent (Lei nº 8.668 art. 18).Lei nº 11.033 of 21 December 2004, art. 3 III and §§ 1 and 2 as worded by Lei nº 14.754 of 12 December 2023, Art. 3 III; § 1 I to III; § 2, 2023-12-12 official text · verified 2026-10-27 · changed: Lei nº 14.754 of 12 December 2023, effective 1 January 2024, raised the minimum to 100 quotaholders, added the 30 percent related party cap and required that quotas actually trade.

4. Funds taxed like companies. An FII that invests in a real estate project whose developer, builder or partner is a quotaholder holding, alone or with related persons, more than 25 percent of the quotas is taxed under the rules for companies. Related persons include relatives up to the second degree and companies they control, or for a company quotaholder its controller, subsidiaries and affiliates.
Cost to do it: Corporate level income taxes on the fund, removing its pass through advantage.Lei nº 9.779 of 19 January 1999, Art. 2 caput and sole paragraph, 1999-01-19 official text · verified 2026-10-27

5. Fund level financial income. Income and net gains of FIIs from fixed and variable income investments are subject to withholding under the rules for companies, except investments in mortgage notes (LH), real estate receivables certificates (CRI) and real estate credit notes (LCI); the tax withheld can be offset against the tax withheld on distributions to quotaholders not entitled to the individual exemption.
Cost to do it: Fund managers often hold CRI and LCI for this reason.Lei nº 8.668 of 1993, art. 16-A added by Lei nº 9.779 of 1999 and amended by Lei nº 12.024 of 27 August 2009, Art. 16-A caput and §§ 1 to 3, 2009-08-27 official text · verified 2026-10-27

Worked example

Individual versus company quotaholder. A listed FII with 50,000 quotaholders distributes R$100,000 (about US$18,746) to an individual holding 0.5 percent of quotas: exempt (Lei nº 11.033 art. 3 III). The same distribution to a company quotaholder bears R$20,000 (about US$3,749) withholding, credited against its corporate tax (Lei nº 8.668 arts. 17 and 19 I). If the individual later sells the quotas at a R$50,000 gain, 20 percent, R$10,000, is due (art. 18).

Step by step

1. Check the fund's listing and trading status and quotaholder count against Lei nº 11.033 art. 3 § 1.
2. Keep each individual holding under 10 percent and related holdings under 30 percent if the exemption matters.
3. For sponsors: keep the developer or builder and related persons at or below 25 percent of quotas (Lei nº 9.779 art. 2).
4. Compute and pay the 20 percent tax on quota sale gains under the variable income rules.

Common traps

Large family stakes. Related individuals at 30 percent or more lose the exemption (Lei nº 11.033 art. 3 § 1 III).
Sponsor concentration. More than 25 percent held by the developer turns the fund into a corporate taxpayer (Lei nº 9.779 art. 2).
Assuming gains are exempt too. Only distributions qualify; quota sale gains are taxed at 20 percent.

Sources

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