IR 2023: Learn how to declare the purchase and sale of property – 04/25/2023 – Market

The purchase, sale and financing of real estate must be informed by taxpayers who are required to declare the 2023 Income Tax.

Even if the good has not yet been delivered or paid in full, it is necessary to report it to the Federal Revenue. Before starting, the taxpayer must gather the documents that prove the situation of the property, such as a deed, registration in a notary, bank details and invoices for any renovation.

Anyone who owns a property also needs to be careful when declaring. Despite being an asset that can appreciate over the years, the value of the property cannot change from one year to the next.

The procedure can only be done in case of renovation or if financing is being paid. “You cannot update with the market value”, says David Soares, IOB Income Tax consultant.

The income tax return must be submitted by 11:59 pm on May 31st. If the taxpayer who is obliged to settle the accounts does not meet the deadline, he will pay a fine. The minimum amount is R$ 165.74 and can reach 20% of the tax due in the year.

How to declare the purchase of property

If you purchased a property in 2022 or started financing, you need to inform the Revenue about the movement.

• The purchase is declared under Goods and Rights. Select group 01 (Real Estate), choose the code that fits the property (house, apartment, building, shed, land, etc.) and define its location (Brazil or abroad)

• Fill in the data with the IPTU number (if the number is greater than 30 characters, put it in discrimination), acquisition date, address, number, complement, neighborhood, city, state, zip code, total area in m² or ha, number of property registration and notary

• In breakdown, put details of the operation such as down payment, financing (installments already paid), if you used FGTS, name and CPF or CNPJ of the seller, amount paid for property transfer tax and other information you consider relevant to the Revenue

• In case of purchase in 2022, leave the Status field on 12/31/2021 blank. On 12/31/2022, add what was paid by that date for the property as down payment, FGTS and financing installments, and fill it out. “If the property was paid off, enter the amount paid and it will be included in the next declarations”, says Marco Antonio Vasquez, partner at VRL Advogados.

Financing is not debt

If the property is being financed, the taxpayer must update its value over the next few years with the installments paid in the calendar year. If you own a property and are paying the loan, just update the status field in 2022 with the sum of the 2021 value plus the installments paid in 2022.

Those who opted for this form of payment should not declare the financing as a debt. Consultant David Soares, from the IOB, warns that this is one of the most frequent errors in the declaration. “A lot of people think they need to fill in debt and real liens, but that’s not it. The property is not a real guarantee, because if the person does not pay the financing, whoever is financing it can take the property”, he explains.

Use of FGTS to purchase property

The use of the FGTS (Employment Severance Indemnity Fund) must be described in the breakdown under Assets and Rights and must be reported under Exempt and Non-Taxable Income.

• Select line 4 (Indemnities for termination of employment, including as a PDV, and for accidents at work; and FGTS). Define whether you are the owner or dependent. “If the holder and dependents used the FGTS for this property purchase, it is necessary to have a form for the holder and another for each dependent”, says Vasquez.

I have a consortium, how do I do it?

If you entered a consortium in 2022 to purchase property, the act must be declared to the Revenue, even if it has not yet been contemplated.

• Go to Assets and Rights, select group 99 (Other Assets and Rights) and code 05 (Consortium not contemplated). Define whether it belongs to the holder or the dependent, the location and CNPJ of the administrator

• In breakdown, fill in the number of installments paid in the year, and put the situation on 12/31/2021 and 12/31/2022. If the consortium was already in previous declarations, add the values ​​of the installments paid in 2022 to the amount of 2021.

If the consortium has been contemplated or a bid has been made, and the property has been acquired, it is necessary to change the form in Goods and Rights, informing in detail that the consortium has been contemplated or a bid has been made, describing the value and putting all the data of the property, as already mentioned above. Leave the Status field on 12/31/2022 blank.

Next, the taxpayer needs to open a file in Assets and Rights to communicate the purchase of the property. Follow the same steps explained above, and it is necessary to inform in the discrimination field that the consortium letter of credit was used, entering its data and adding the value in situation on 12/31/2022.

How to declare property for sale

Anyone who has sold a property must make changes to the Assets and Rights sheet. The Status field on 12/31/2022 must be left blank. In discrimination, the name and CPF or CNPJ of the buyer, the sale value, any capital gain, the amount paid for brokerage, registration of the property and the notary where the sale was registered must be informed.

Another duty is to verify the need to pay the capital gain, if the sale value was greater than the purchase value. The calculation is made by the Federal Revenue’s GCAP (Capital Gain) system and payment must be made by the last working day of the month following the sale.

The collection of the tax follows a progressive table, according to the amount received

Income per month	profit tax
Up to BRL 5 million	15%
Between BRL 5 million and BRL 10 million	17.5%
Between BRL 10 million and BRL 30 million	20%
Over BRL 30 million	22.5%

_{Source: Federal Revenue}

Discharge is carried out by issuing a Darf (Federal Revenue Collection Document), using the Revenue e-CAC (Virtual Service) system, with code 4600.

If there is a delay, a fine of 0.33% per day is charged, limited to 20% in the month, plus 1% interest for the month of payment and the addition of the Selic rate (Special System for Settlement and Custody). The Revenue provides Sicalc (Legal Additions Calculation System), which automatically makes the calculation.

Data submitted to GCAP is imported into the IR return by going to the Capital Gains item in the left hand menu, clicking on GCAP 2022 Import.

Tax exemption on the sale of property

There are some conditions that exempt the seller from transferring part of the profit to the federal government.

• If the taxpayer has a single property and the sale value was equal to or less than R$ 440 thousand. This exemption is allowed if there has been no negotiation of another property, regardless of the exemption, in the last five years.

• If the taxpayer sold the property and is going to buy another one within 180 days. When logging into GCAP, the contributor enters the requested data. Then, the system asks if another property will be purchased in 180 days. To be exempt, you must answer Yes. This rule does not apply to the purchase of land, parking spaces or parking spaces.

In the second case, if the taxpayer does not use all the capital gain in the purchase of the property, there will be a proportional charge on the unused amount. “If he bought it for BRL 200 thousand and sold it for BRL 500 thousand, he had a gain of BRL 300 thousand. about the R$ 150,000 he didn’t use”, says Marco Antonio Vasquez.

In the two aforementioned cases of exemption, this benefit must be declared under Exempt and Non-Taxable Income. The line is 6 for the first situation and 7 for the second. The contributor can then either import the value data from GCAP or enter it manually.

Since last year, the Revenue has opened another possibility of exemption. “If the taxpayer is buying a second property and wants to use what he has already paid for it to acquire another property, he will also be exempt from capital gains”, explains Soares.

Finally, the Revenue also grants a 100% exemption for properties acquired before 1969. In the case of properties between 1969 and 1988, there is a progressive reduction in capital gains ranging from 95% (1969) to 5% (1988). .

“It is recommended that the taxpayer always fill out the GCAP, even if he has the exemption”, explains Soares.

Property received in estate

In case of receiving inheritance property, the taxpayer needs to have the deed of the property and open a new file in Goods and Rights as if it were the purchase of a good. It is necessary to inform in the discrimination field that the good comes from an estate, detailing the name and CPF of the former owner.

If the heir maintains the same amount that was declared by the taxpayer who died, there will be no collection of Income Tax. The value of the property must be declared in “Situation on 12/31/2022”.

The taxpayer must also open a file in Exempt and Non-Taxable Income. Select line 14 (Equity transfers, donations and inheritances), identify whether it belongs to the holder or the dependent, inform the name and CPF of the person who inherited the asset, and fill in the amount.

If the option is to update the value of the property, a possible option at this time, it is necessary to verify if there was a profit between the purchase price and the update value. If so, the taxpayer needs to calculate the capital gain using the Gcap program.

In both cases, you must pay a separate tax, the ITCMD (Transmission Tax Cause Mortis and Donation), which is state and refers to the transfer of goods. “If there was no such payment, the State Treasury can look for the taxpayer, as it will know through the crossing of data”, says David Soares. The tax rate varies according to the federation unit.

Property renovation must also be declared

In addition to financing, another possibility for the value of the property to be increased by the owner is in case of renovation that brings permanent changes such as changing the floor, plumbing, expansion, carrying out works such as gutters, paving roads and installing light and sewage. .

If the property was purchased after 1988, the changes must be included in the property’s file under Assets and Rights in the breakdown field, mentioning what was done and the total amount spent. The taxpayer needs to add the amount to what was already in place on 12/31/2021 to update on 12/31/2022.

If the property was acquired prior to 1988, the renovation needs to be opened in another form under Assets and Rights, selecting group 01 (Real Estate) and code 17 (Improvements). In the breakdown, it is necessary to describe the work that was done and the amount spent. Fill in the property details, leave the situation on 12/31/2021 field blank and enter the renovation amount on 12/31/2022.

The recommendation is to keep the invoices for the materials purchased and professionals paid for the services. However, none of the expenses with materials or services allow income tax deduction.

What’s in the pre-filled statement

One of the improvements made to the pre-filled IR statement involves the real estate portion. According to the Revenue, the resource brings data sent by the registry offices in the DOI (Declaration of Real Estate Operations).

With this, the operations carried out in 2022 for purchase, exchange, donation, adjudication, promise of purchase and sale or assignment of rights must already be completed. The sales operations are not included in the pre-filled declaration.

Revenue and consultants consulted by Sheet recommend that the taxpayer check all data, especially the value of the property, as the responsibility lies with the person declaring it, at the risk of falling into the fine mesh.