Possibility of Returning Amounts Overpaid in Real Estate Transfer Tax

If you've bought property in the last five years... you may be entitled to get back the money you've paid in property transfer tax.

An important decision by the Superior Court of Justice (STJ) has ruled that municipalities can no longer demand payment of the Real Estate Transfer Tax (ITBI) using an increased calculation base.

For those unfamiliar with the term, the calculation basis is the value on which the ITBI rates (percentages) are levied. For example, on a property worth R$100,000.00, subject to a rate of 3%, the tax to be paid would be, in simplified terms, R$3,000.00.

Before the ruling, municipalities had the freedom to set the ITBI calculation base, opting for the highest value between IPTU, negotiation value or reference venal value, which often resulted in higher tax collection for the municipality.

But now this practice is no longer tolerated! The STJ has defined clear and objective criteria for calculating ITBI, removing the ability of municipalities to choose the highest value in order to collect more.

Here are the main points of interest for those who have bought a property in the last five years or intend to do so soon:

1. Market Value: The ITBI calculation basis must reflect the real value of the property under normal market conditions, without being tied to the IPTU or any other tax floor;

2. Presumption of Declared Value: The value declared in the transaction by the taxpayer is presumed to be the market value, and can only be challenged by the tax authorities through an administrative process, in accordance with art. 148 of the CTN;

3. Prohibition of Municipal Arbitrariness: The municipality cannot define the basis for calculating ITBI based on reference values established unilaterally.

Unlike the IPTU, which is levied on property based on generic values, taking into account factors such as location and size, the ITBI must take into account the individual market value of the property, including aspects such as improvements and state of repair.

The amounts to be refunded can be substantial. For example, in a case where the taxpayer paid more than R$30,000.00, when the correct amount would be a maximum of R$12,000.00, they will receive a refund of R$18,000.00, duly corrected!

Thus, those who have purchased real estate in the last five years have the right (and should exercise it) to request a refund of what they have overpaid in ITBI, provided that the tax was calculated based on a higher value than the actual transaction.

This decision can be extremely beneficial for many people, allowing them to regularize the ownership of their property and considerably reduce the costs of making the transfers.

If you need help with this process, our legal team specializing in tax law is on hand to guide you through every step. Based on a careful analysis of your case, we will draw up a personalized strategy to ensure that your rights are fully respected, from the collection of documents to representation in administrative or judicial proceedings.