understand what the new Brazilian real estate registry will look like, which the IRS has already started to implement

Thanks to it, each property will have a unique national identifier, to standardize property registrations and combat informality in rentals. Find out how this new registration will work below.

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• The Normative Instruction (IN) which created the IPC was published in August. According to the text, the IRS will integrate information from notaries, town halls, federal and environmental agencies into a single national database. The creation of this system was planned in the tax reform project.
• Thanks to this unique identifier, the tax administration will be able to cross-reference information from registers, notaries, banks and town halls with income tax declarations.

When will the system start to be implemented?

• According to the timetable proposed by the Finance Administration, the implementation of the real estate “CPF” began on November 25. Integration with registration acts will take place gradually.

• Yes, all urban and rural properties will receive a new registration with the CIB. The taxpayer will, however, have no role in this transition, since the information will have to be provided by the civil status offices.
• The law provides that notarial firms must adapt their systems within one year from the start of the transition. In other words, all properties are due to benefit from the CIB by December next year, if the timetable is met.

Reference price of the property

• Furthermore, the CIB introduces the notion of “reference value”, an official estimate of the market value of real estate calculated based on parameters defined by the Finance Administration.
• This value will be used as a parameter to calculate taxes such as ITBI, IBS, CBS, IPTU and ITCMD.

What changes for the taxpayer?

• Rent and income tax declarations can be compared to actual CIB records;
• Real estate transactions will require the mandatory use of the CIB code in documents and contracts;
• New penalties may be applied in the event of inconsistencies or omissions in registration;

How to prevent problems?

Tax lawyer, partner at Machado Meyer Advogados, Andre Menon, recommends a review of taxpayers’ real estate transactions to avoid possible inconsistencies with other declarations.

— The examination includes checking the property documentation, such as deeds, registration, notarial deeds, contracts (rental, sale, etc.) and possible georeferencing, ensuring that all data is correct and up to date — he explains.

In addition, the expert emphasizes that it is also important to verify the information declared to the income tax, ensuring that property values, rents and other income are consistent with the records that will be linked to the CIB.

Georeferenced location

Each property will be linked to a precise position on the map, guaranteeing greater cadastral reliability at no additional cost to the taxpayer.