ITBI (Property Transfer Tax) in the Contribution of Real Estate: Topic 1.348 could increase legal certainty for asset holding companies and real estate companies.

The transfer of real estate to contribute to a company's share capital is a frequent operation in the asset and succession planning of families. Despite the immunity provided for in the Federal Constitution, many municipalities require the Real Estate Transfer Tax (ITBI) when the company receiving the assets operates predominantly in the purchase, sale, or rental of real estate.

This controversy is being analyzed by the Supreme Federal Court in General Repercussion Case 1,348. As of October 13, 2026, the published score is six votes to two in favor of immunity, even when the company's activity is predominantly real estate-related. The judgment remains in progress, with a scheduled conclusion on October 19, unless there is a further interruption.

Understanding the Constitutional Controversy of ITBI (Property Transfer Tax)

Generally, ITBI (Tax on the Transfer of Real Estate) applies to onerous transfers of real estate, such as buying, selling, and exchanging. Gratuitous transfers, such as donations or inheritances, are subject to ITCMD (Tax on Inheritance and Donations), which is a state tax. Therefore, the tax treatment depends on the nature of the transaction.

In the case of capital contributions, a partner transfers real estate to the company to fulfill their contribution to the share capital. For this scenario, Article 156, § 2, item I, of the Constitution provides for ITBI (Real Estate Transfer Tax) exemption. The debate arises because the same provision contains a caveat related to the predominant real estate activity of the acquiring legal entity.

In Case 1.348, the Brazilian Supreme Court (STF) is examining whether this exception also applies to capital contributions or if it is limited to transfers resulting from mergers, acquisitions, spin-offs, or dissolutions of legal entities. The majority opinion holds that, in capital contributions, the exemption is independent of the company's predominant activity. If confirmed, this interpretation could prevent claims based solely on the fact that the company engages in real estate activities.

Practical Impacts for Holding Companies and the Limits Maintained by the Supreme Federal Court

The distinction has practical consequences for asset and family holding companies. A company that receives real estate as a contribution to its share capital performs a different operation than one that buys real estate. The eventual confirmation of the favorable thesis will not eliminate the ITBI (Property Transfer Tax) from all acquisitions made by holding companies, nor will it dispense with the analysis of the structure and documents of each transaction.

The limit defined by the Supreme Federal Court in Topic 796 also remains relevant: immunity does not extend to the value of assets exceeding the share capital to be paid up. Thus, the discussion about the company's activity does not eliminate the need to examine the values involved and their allocation to the share capital. Furthermore, the favorable interpretation being formed does not prevent the auditing of operations involving fraud or simulation.

Strategies for Taxpayers: New Tax Returns and Refunds of Taxes Paid

For taxpayers who are making a capital increase, the first step is to review corporate documents, property registrations, the values assigned to assets, and the basis for any potential municipal tax assessment. If tax exemption is denied, legal action to challenge the assessment should be considered, including a request for an injunction when there is urgency and the legal requirements are met.

Anyone who has already paid ITBI (Property Transfer Tax) in a similar transaction should assess the possibility of restitution through legal action. This analysis requires verifying the reason for the charge, the documentation of the payment, and the applicable deadlines. As a rule, the Brazilian Tax Code (CTN) establishes a five-year period, counted from the extinction of the tax credit, to claim restitution of undue payment.

In this context, the possibility of the Supreme Federal Court (STF) modulating the effects of its decision, establishing time limits for its application, deserves attention. Therefore, it is recommended to prioritize evaluating the advisability of filing the lawsuit before the conclusion of the trial, especially in cases involving the recovery of amounts paid.

The formation of a majority represents a significant step forward for the discussion, but it will still be necessary to monitor the conclusion of the trial, the final drafting of the legal precedent, and any eventual definition of its long-term effects. For families and businesses, the advice is to review completed or planned transactions now, identify charges that may be subject to questioning, and define appropriate measures to protect their rights.

Article written by: João Rezende.

• The formation of a majority represents a significant step forward for the discussion, but it will still be necessary to monitor the conclusion of the trial, the final drafting of the legal precedent, and any eventual definition of its long-term effects. For families and businesses, the advice is to review completed or planned transactions now, identify charges that may be subject to questioning, and define appropriate measures to protect their rights.