The IPTU will be corrected for inflation between 2022 and 2024 through the PL (Bill) approved by the City Council of São Paulo. The readjustment will take place based on the official inflation meter: the INPC (National Index of Prices to the Extended Consumer).
What this article covers:
The PL — in addition to reviewing the PGV, changes to the IPTU🇧🇷 ISS (Tax on Services of Any Nature) and ITBI (Tax on the Transfer of Real Estate) — updated the COSIP (Public Lighting Service Contribution) tariff and IPTU exemption rules.
The main argument against the measure is that this IPTU readjustment through inflation would result in a substantial increase in the contribution made by peripheral neighborhoods. The IPTU adjustment is then limited to 10% of the owner’s salary cap.
Who is entitled to exemption from IPTU SP amounts?
All properties located in the Urban Zone pay IPTU. As it is a municipal tax, it is up to the city hall of each municipality to define values, exemptions and all questions of this tax that will end up in the public coffers.
Each municipality has its own specific rules to exempt the taxpayer from paying the IPTU, but generally speaking, all INSS insured retirees are entitled to IPTU exemption (total or partial, depending on their income).
For beneficiaries whose income is equivalent to up to three minimum wages (R$ 3,135.00) there is total exemption; those earning three to four minimum wages (R$3,135.00 to R$4,180.00) receive a 50% discount; and beneficiaries with an income of four to five minimum wages (R$ 4,180.00 to R$ 5,225.00) receive a 30% discount.
In addition to the salary factor, it is necessary that the retiree or pensioner does not own real estate in other municipalities; the property in question must be the applicant’s residence; the value of the property must not exceed R$ 1,256,424.00.
To apply for an exemption, you must go to the city hall of your city and request it at the local Treasury Department.
What is the Generic Plan of Values and how does it influence IPTU?
The Generic Plant of Values (PGV) is a formula for calculating the value of real estate with the intention of collecting the taxes due. Taxes such as IPTU (Urban Land and Property Tax) and ITBI (Real Estate Transfer Tax) are taken into account.
The PGV, therefore, is an essential tool for the municipal authorities to be able to collect taxes fairly on property valued at real values in the real estate market.
Small municipalities have great difficulty in developing an average value for real estate properties due to the low level of consistent information.