On the 24th, the 1st Section of the Superior Court of Justice (STJ), when judging Special Appeal No. 1,937,821/SP under the Repetitive Appeals system, decided that the Real Estate Transfer Tax (ITBI) should be calculated based on the sale value of the property instead of the market value, a criterion used to calculate the Urban Territorial Property Tax (IPTU). The controversy was represented in Theme No. 1,113 and is expected to be adopted by 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, contesting the understanding adopted by the Court of Justice of the State of São Paulo based on Theme No. 19 of the Incidents of Resolution of Repetitive Demands. On that occasion, the São Paulo court considered that the basis for calculating the ITBI can be either the value of the transfer of the property or the market value of the property adopted in the IPTU, whichever is higher.

However, Justice Gurgel de Faria, the rapporteur of the case, established some premises for defining the calculation basis. The first of these is that the ITBI should be calculated based on the value of the property transferred under normal market conditions, since the value of the transaction declared by the taxpayer is presumed to correspond to the market value. Therefore, the Municipal Tax Authority could only change the calculation basis by initiating an administrative proceeding, and was prohibited from previously arbitrating the calculation basis or using reference values. The understanding was unanimously accepted by the other Justices.

Therefore, the judgment of Theme No. 1,113 represents a very important precedent for establishing the ITBI calculation basis. In our understanding, establishing the calculation basis based on the real value of the transaction is closer to the nature of the tax itself, whose taxable event is the transfer of real estate.