Taxation of Rental Income in Brazil

Landlords of real estate property in Brazil pay taxes over rental income. But the rules are different for residents and non-residents.

Income tax is paid over the net amount received in rent. Here, net amount means the rent less any allowed expenses. For example, you can deduct condo fees, property taxes (IPTU) and other fees like garbage disposal. You can even deduct fees paid to a rental management company.

Residents pay rates that range from 0% to 27.5%. If they receive less than BRL$1,903.98 in rent per month, they’ll be exempt from paying tax on the rental income. Non-residents, on the other hand, pay a flat tax rate of 15%.

Non-resident landlords must also appoint a resident attorney-in-fact who’ll be responsible for paying the rental income tax. Payment is then processed under the attorney-in-fact's tax ID number (CPF).

The payment due date also varies depending on residency status. After receipt of rent, residents have until the end of the next month to pay the tax. For non-residents, the tax must be paid on the same date that rent is received.

Finally, with respect to reporting, only residents must file an annual tax return declaration. However, there's another type of declaration for non-residents. A Withholding Tax Declaration (Declaração de Imposto Retido na Fonte - DIRF) must be filed by the attorney-in-fact by the end of February following the year when rent was received.

Renting out property in Brazil? Now you know what to do when it comes to paying and declaring taxes on rental income.