This state tax is charged after the transfer of goods or titles (such as credits, real estate and rights in general) from one individual to another, either after death or as a donation. The rate varies from case to case and the function of this type of tax is essentially tax.
The Right taxes
Tax on the Transmission of Intermediate Goods is a municipal tax under the jurisdiction of the Federal District and the Municipalities. In some cities it may also be known by the acronym SISA. This type of municipal tax affects the transfer of ownership of houses, buildings and real estate in general.
Thus, the process of buying and selling a residence, for example, is only made official after the payment of this tax. In the vast majority of cases the ITBI is paid by the buyer of the property. However, everything will depend on the type of negotiation. Visiting taxfyle.com/sales-tax-calculator is important there for tax calculation.
The Right rarte
The ITBI rate varies from city to city, however, it is on average 2% under the market value of the property. This is an average of capitals and larger cities across Brazil. Therefore, in the case of a property in the amount of R $ 200,000 with a 2% rate, the ITBI fee will be R $ 4 thousand.
- According to the Federal Constitution, the minimum collection rate is 2% based on the company’s gross earnings. Not only do companies of all sizes providing services have to pay this tax, but also self-employed professionals in this segment. Generally, the rate is 5% above the invoice value of each service provided.
- In some municipalities the rate is only 2% (minimum rate, according to the constitutional amendment) to stimulate the provision of certain services, as is the case with services in the computer area, for example.
All professionals with complete higher education as is the case with doctors, lawyers, administrators, engineers, political scientists, architects, communicators and others – who work without employment (that is, without a formal contract) must also contribute with the payment of the municipal tax ISS.
Basis of Calculation
The basis for calculating this tax depends on the property’s market value (that is, the market value at which it should be sold). In order to calculate the property’s market value, in turn, the following factors are taken into account: size of the land, total area built and not built, location of the land in the city plan and qualification (which will depend on the finish of the constructions). After calculating the property’s market value, this value is multiplied by the rate of your municipality. Generally, the rate is 1.0% for houses and businesses or up to 3% for buildings and land.