Owning Brazilian real estate personally or through a holding company: what changes in 2027

For a holding company, December 31, 2026 sets the starting value of the adjustment reducer (redutor de ajuste), which lowers the tax base on a future sale. The reducer is one factor in comparing personal and corporate ownership, and the date does not require anyone to transfer property.

This note is written for owners of portfolios of completed properties held as long-term assets, and for families considering how to organize those assets. Real estate development, land subdivision, construction and residential leases of up to 90 consecutive days, which follow the rules for hotel services (article 253 of Complementary Law No. 214/2025), have rules of their own and are not covered here.

At a glance: individual or holding company from 2027

What starts in 2027

In 2026, the CBS and the IBS already apply in a test phase, at rates of 0.9% and 0.1%, and taxpayers that meet the applicable tax compliance obligations are excused from paying them (Complementary Law No. 214/2025, articles 343, 346 and 348). On January 1, 2027, the CBS replaces PIS and Cofins. The IBS, which replaces the state ICMS and the municipal ISS, has a general transitional rate of 0.1% in 2027 and 2028, rises gradually from 2029 to 2032 and applies in full from 2033 (Constitutional Amendment No. 132/2023). The reference rates have yet to be set by Senate resolution.

For real estate, Complementary Law No. 214/2025 created a specific regime (articles 251 to 270). Its main rules are:

• Leases, paid assignments of use and leasing arrangements (arrendamento): rates reduced by 70% (article 261, sole paragraph).
• Sales and other real estate transactions: rates reduced by 50% (article 261).
• Residential leases: a deduction of R$ 600 per month, per property, from the tax base, capped at the base itself and adjusted monthly by the IPCA (article 260, as amended by Complementary Law No. 227/2026). The deduction comes off the base, not off the tax.
• Property swaps with no cash balance, and the creation of security interests such as mortgages and fiduciary liens (alienação fiduciária): not taxed (article 252, paragraph 2, I and II).

When an individual becomes a taxpayer

An individual who leases or sells real estate stays outside the IBS and CBS unless one of the thresholds in article 251, paragraph 1, of Complementary Law No. 214/2025 is crossed. In that case, the individual becomes a taxpayer under the regular regime, like a real estate company:

• Leasing: in the previous year, total income from these transactions above R$ 240,000 and more than three separate properties (item I).
• Sales: more than three separate properties sold in the previous year, counting only those held for less than five years (item II and paragraph 3).
• Sales of properties the seller built: more than one property sold in the previous year among those built in the preceding five years (item III).

The individual becomes a taxpayer in the same year if rental income exceeds the threshold by more than 20%, about R$ 288,000 in statutory terms, with more than three separate properties, or if sales exceed the limits in items II and III (Complementary Law No. 214/2025, article 251, paragraph 2). The CBS regulations (Decree No. 12,955/2026) and the IBS regulations (CGIBS Resolution No. 6/2026) apply the property count to the same-year rule as well (article 382, paragraph 1, III). The R$ 240,000 threshold is adjusted monthly by the IPCA from January 2025 (paragraph 5).

The same regulations define a separate property as each independent unit, built or not, with exclusive use and its own location, even if it is not recorded at the land registry. A unit used as a whole may span more than one registry record (article 383). A fractional interest in a co-owned property counts as a separate property (article 382, paragraph 9). Counting registry records or lease contracts may therefore give a different result from counting properties.

Below these thresholds, the individual remains outside the IBS and CBS, and rental income continues to be subject to individual income tax at progressive rates.

What changes for an asset-holding company

A holding company that leases real estate and pays income tax under the presumed profit method (lucro presumido) currently pays PIS and Cofins on a cumulative basis, at 3.65% of revenue, in addition to IRPJ and CSLL. From 2027, PIS and Cofins give way to the CBS, with the 70% reduction, and the IBS phases in. Under the regular regime, the company may offset credits for IBS and CBS paid on purchases connected with its activity. A company that leases its own properties may not elect the Simples Nacional, the simplified regime for small businesses (Complementary Law No. 123/2006, article 17, XV).

Older lease contracts have a transition rule. For fixed-term contracts, the landlord may elect to pay IBS and CBS at 3.65% of gross receipts, with no credits and no social reducer (article 487):

• Non-residential leases: the contract must have been signed by January 16, 2025, with the date proven by a notarized signature or an electronic signature, and either recorded at a registry by December 31, 2025 or made available to the Federal Revenue Service and the IBS Management Committee as provided in the regulations. The election lasts for the original term of the contract.
• Residential leases: the contract must have been signed by January 16, 2025, with the date proven by a notarized signature, an electronic signature or payment of rent by the last day of the month following the first month of the lease (Decree No. 12,955/2026, article 463, paragraph 1, II). The election lasts for the original term or until December 31, 2028, whichever comes first.

The election is irrevocable (Decree No. 12,955/2026, article 463, main text). For non-residential contracts, the CBS regulations add that the election is made by issuing the first tax invoice under it and that the contract must be kept and produced if the tax authorities request it (article 463, paragraph 1, I, b). Before electing, it is worth comparing the result with the regular regime, which allows credits and, for residential leases, the social reducer, taking into account the remaining term of each contract.

Distributed profits are also taxed. Since January 2026, Law No. 15,270/2025 has required 10% income tax withholding on the total amount of profits and dividends paid, credited, used or delivered in a month by the same company to the same resident individual, once that amount exceeds R$ 50,000. Profits for periods through 2025 have their own transition rule. The law also introduced an annual minimum tax on income above R$ 600,000, starting with calendar year 2026 and assessed in the 2027 tax return, with credit for tax already paid and a cap mechanism. The two rules do not simply add up.

Why December 31, 2026 matters for a holding company

From January 1, 2027, each property owned by a taxpayer under the regular regime carries an adjustment reducer. It serves only to lower the IBS and CBS base when the property is sold and is adjusted by the IPCA up to the date of sale (article 257, main text and paragraphs 1 and 3). If the buyer is also a taxpayer under the regular regime, the reducer passes to the buyer. Otherwise, it lapses (article 257, paragraph 4).

The starting value of the reducer depends on when the property entered the holding company’s portfolio (article 258):

• Property held on December 31, 2026: the acquisition cost, adjusted by the IPCA up to that date, or, at the taxpayer’s election, the property’s reference value, an estimate of market value calculated by the tax authorities and published on Sinter, the national land information system (article 258, I, and article 256). If the reference value is not available on December 31, 2026, a taxpayer that does not elect to set the reducer under article 258, I, may calculate it based on an estimate of market value made under a specific procedure provided in the regulations (article 258, paragraph 2).
• Property acquired on or after January 1, 2027 from a person outside the regular regime, such as an individual who is not a taxpayer: the acquisition cost, with no option to use the reference value (article 258, III).

The ITBI, the municipal real estate transfer tax, and the laudêmio, a fee due on transfers of certain land held under long-term tenure, paid on the acquisition are added to the reducer (article 258, paragraph 6, I). If the declared acquisition cost is not consistent with market value, the tax authorities may challenge it in an administrative proceeding (article 258, paragraph 3).

Contributing a property to the capital of a holding company is, as a rule, not subject to IBS and CBS (article 6, IV). The adjustment reducer for a contributed property depends on the date of the transfer and the tax status of the contributor, and calls for a case-specific analysis.

As a planning step, a holding company that already owns real estate would do well to gather the deeds, ITBI payment slips and other proof of acquisition for each property, preferably before December 31, 2026. The law sets no deadline for collecting these documents; the statutory date is the one that fixes the starting value of the reducer. Transferring properties to a holding company is a separate decision that turns on other factors.

How to assess your situation

Comparing personal ownership with transfer to a holding company should take into account the owner’s net annual cash flow, the cost of entry (ITBI where applicable, any capital gains tax, registry and notary fees), the net result of a future sale and the cost of running the structure, such as accounting and administration. Governance and succession planning are separate goals that may justify a holding company for other reasons and should be analyzed on their own.

Two points weigh on this comparison and follow their own rules. Whether ITBI immunity applies when property is contributed to the capital of a company whose main activity is real estate is under review by the Federal Supreme Court (STF, Topic 1,348), and the outcome should be checked before any transaction. On a future sale, the company’s income tax depends on how the property is classified and how it was used, and the adjustment reducer does not address that part.

• Owner below the thresholds: take stock of the number of separate properties, the year’s rental income and any plans to sell. Below the thresholds, the individual stays outside the IBS and CBS. Crossing them makes the individual a taxpayer, which does not require setting up a holding company.
• Individual above the thresholds: take stock of income, expenses backed by tax invoices and lease contracts signed by January 16, 2025. The next step is to organize IBS and CBS compliance and compare it with the holding company alternative.
• Existing holding company: gather the acquisition documents for each property, preferably before December 31, 2026, check whether the reference value is available, and review older lease contracts and the profit distribution policy.

Frequently asked questions

Will someone who leases one or two properties pay IBS and CBS from 2027?

As a rule, no. For leasing, an individual becomes a taxpayer in two cases: if, in the previous year, the individual had more than three separate properties and rental income above R$ 240,000, a statutory figure adjusted by the IPCA; or if, in the current year, rental income exceeds that threshold by more than 20%, also with more than three properties (Complementary Law No. 214/2025, article 251; Decree No. 12,955/2026, article 382). Owners who have reduced their portfolio should also look at the previous year. Sales have thresholds of their own. Outside these cases, rental income remains subject only to income tax.

When does an asset-holding company start paying IBS and CBS on rent?

In 2026, both taxes are in a test phase, and taxpayers that meet the applicable tax compliance obligations are excused from paying them. From January 1, 2027, the CBS replaces PIS and Cofins on the rent the holding company receives, at a rate reduced by 70%. The IBS has a general transitional rate of 0.1% in 2027 and 2028, before the real estate reductions, and rises gradually until 2033. Contracts signed by January 16, 2025 may qualify for transition treatment if they meet the requirements and proof rules of article 487 of Complementary Law No. 214/2025.

What is the adjustment reducer?

It is an amount attached to each property owned by a taxpayer under the regular regime and deducted from the IBS and CBS base when the property is sold. It has no effect on the tax on rent. For properties already owned on December 31, 2026, it equals the acquisition cost adjusted by the IPCA or, at the taxpayer’s election, the reference value.

What is the social reducer?

It is a deduction of R$ 600 per month, per property, from the IBS and CBS base on residential rent received by a taxpayer under the regular regime. The deduction comes off the base, not off the tax. The amount is adjusted monthly by the IPCA and cannot exceed the base itself.

Does the December 31, 2026 date require transferring properties to a holding company?

No. The date sets the starting value of the adjustment reducer for properties already held by the company, and the reducer matters only on a future sale. A transfer depends on a broader comparison that includes the cost of entry, net annual cash flow, the result of a sale and succession goals. The capital contribution itself is, as a rule, not subject to IBS and CBS (article 6, IV), but the law does not say expressly how the adjustment reducer is set in that case.

Open questions

As of October 17, 2026, we had not located the supplementary rules on the methodology and publication of property reference values, the procedure for challenging them, or the IBS and CBS reference rates.