Brazil is a beautiful country with diverse landscapes and a rich culture. Sources tell me expats are always excited when they arrive in Brazil on assignment. However, before they can enjoy the sunset at the beach or a caipirinha on their balcony, they must understand the terms of their housing rental situation. During the exciting process of searching for a new home, it's not uncommon to come across the question, "IPTU? What does that mean?".
IPTU – What is it?
IPTU is the Portuguese acronym for “Imposto sobre a propriedade predial e territorial urbana”, which translates to “Urban Building and Land Tax”. Brazilian municipalities have constitutional authority to collect taxes on urban real estate within their municipality limits. In rural areas, the tax is known as ITR, which stands for “Imposto sobre a propriedade territorial rural”.
Who pays for the IPTU?
Here is where some expats need clarification. The property owner is the one who is responsible for paying the IPTU. They can be sued by the municipality if the tax is unpaid. Despite this, it is common in Brazil for landlords to pass on this tax to their tenants as part of their lease. Sources tell me that there are different payment schemes depending on the lease and the property, but that is between the tenant and landlord in their lease discussion. IPTU is typically separate from the rent, condo fees, and utilities.
How much is IPTU?
There is no simple answer to how much IPTU will cost a tenant other than “it depends”. IPTU rates vary from municipality to municipality, from city to city, and even from apartment building to apartment building. Whilst meeting with a source in Brazil, they pointed out buildings only a block apart from each other both with different IPTU rates. AIRINC tracks these expenditures through onsite research, interviews, and discussions with tax professionals, but it's only possible to provide calculated estimates due to the specific criteria involved in the fee.