By: Vitor Antony Ferrari, Ivan Kubala

In real estate transactions, particularly in the transfer of real estate, whether free of charge or for a fee, the incidence of tax (ITCMD and ITBI, for example) is a very recurring issue and has always generated debates in the administrative and judicial spheres, as the respective municipal and state legislation does not exhaust all issues relating to the matter.

In the case of the Inheritance and Donation Tax, applied to donations and inventories, for example, there is vigorous discussion in the São Paulo Court about the calculation basis, whether the reference market value of the ITBI or the market value of the IPTU payment slip should be considered, although it has been recognized that the use of the reference market value is inadmissible, although it is admitted that the Tax Authorities determine the market value of the real estate for purposes of levying the aforementioned tax.

Regarding the Property Transfer Tax, applied to other real estate transactions, a similar discussion has been taking place in the courts, and the São Paulo Court had also already taken a position that the aforementioned tax should be calculated based on the highest value, comparing the value of the legal transaction with the reference market value set by the City Hall.

Based on these parameters, the advantage for the tax authorities was clear, as the tax would always be collected based on the highest value, regardless of the legal rules relating to the tax in question.

The matter reached the Superior Court of Justice, which decided to refer it for judgment using the repetitive special appeals procedure, in November of last year (2021), receiving the number 1,113.

On February 24, 2022, topic no. 1,113 was judged by the First Section of the STJ, which established the thesis that the ITBI should be calculated on the market value of the property, which can only be waived through an administrative process. In this way, the STJ creates a greater balance between taxpayers and the Tax Authorities, in addition to extolling legal norms.

Therefore, those who intend to sell or buy real estate must be careful not to be forced to pay taxes in disagreement with the recent position of the STJ, which is why it is important to always have the legal support of a lawyer.

With the collaboration of Luis Felipe Meira Marques Simão