2/25/2022
In the inheritance and donation of real estate in the State of São Paulo, many taxpayers have been surprised by the notary’s office responsible for registering the operation, which, in compliance with the guidelines of the State Tax Department, requires that ITCMD – and all the fees and notary’s charges – is paid according to the reference market values used by the São Paulo City Hall to collect the ITBI.
However, according to the state law, these values are not consistent with the calculation basis that should be used for the correct assessment of the ITCMD, especially considering the fact that, in general, the market values of the properties established for IPTU purposes are considerably lower than those established to ITBI.
Law 10705/2000 states that ITCMD tax basis will be the one used in the donation agreement, which cannot be lesser, in the case of real estate property, than the value established for IPTU purposes. This way, this normative act does not establish any provision that ITCMD tax basis could or should become the ITBI reference value.
And it is exactly for this reason that the São Paulo State Court of Justice has been establishing its jurisprudence clearly against the State Tax Authorities.
In recent months, there have been several decisions expressly acknowledging the taxpayer’s right to use, while the current wording of Law 10,705/2000 is in effect, the IPTU market value values when determining the calculation basis for the payment of ITCMD levied on transactions whose taxable event appears to be the transmission causa mortis or donation of real estate or rights related thereto.
Even though it is not a definitively consolidated jurisprudential position, at least for now, such decision represents a significant victory for taxpayers from São Paulo, which, if necessary, may appeal to the Judiciary to have their rights assured.
Co-authors: Camila Caçador Xavier and Tiago Zonta Guerreiro
