By: Vitor Ferrari and Ivan Kubala
Last February 24, the 1st Section of the Superior Court of Justice (STJ), when judging Special Appeal No. 1.937.821/SP under the Repetitive Appeal system, decided that the Real Estate Transfer Tax (ITBI) must be calculated based on the property’s sale value instead of the assessed value, which is the criterion used to calculate the Urban Territorial Property Tax (IPTU). The controversy was represented in Theme No. 1113 and is expected to be adopted by the other courts in Brazil. The decision has not yet been published
The Special Appeal that represented the discussion of the matter was filed by the Municipality of São Paulo, challenging the position adopted by the Court of Appeals of the State of São Paulo based on Theme No. 19 of the Incidents of Resolution of Recurrent Claims. At that time, the São Paulo State court held that the ITBI tax basis may be either the property transfer value or the assessed value of the property adopted in the IPTU, whichever is greater.
However, Justice Gurgel de Faria, reporting justice for the case, established some premises for the calculation basis definition. The first of these is that the ITBI tax must be calculated based on the property value transmitted under normal market conditions, since the transaction value declared by the taxpayer is presumed to correspond to the market value. Therefore, the Municipal Tax Authorities could only change the calculation basis by means of an administrative proceeding, being prohibited from previously arbitrating the calculation basis or using reference values. The understanding was unanimously supported by the other Justices.
Therefore, judgment of Theme No. 1113 represents a very important precedent for setting the ITBI tax base. In our opinion, setting the tax base on the actual transaction value is closer to the tax nature itself, whose taxable event is the real estate transfer.
With the collaboration of Luis Felipe Meira Marques Simão