Campinas Sees Record Property Transfers to Heirs Amid Tax Reform Fears
Notary Publics in Campinas, São Paulo, recorded a record 3,074 property transfers to heirs in 2025, a 64% increase over five years. This surge is attributed to anticipated changes from Brazil's Tax Reform, which could raise the inheritance tax (ITCMD) rate in São Paulo from a flat 4% to a progressive system potentially reaching 8%. The reform mandates states with a single ITCMD rate to adopt progressive scales based on asset value, and calculations will shift to market values instead of potentially lower reference values. These changes, however, require state-level legislative approval and are not expected to take effect before 2027, even if passed in 2026. The increase in transfers aims to avoid higher future tax burdens and potential property value appreciation. Families are utilizing methods like 'donation with reservation of usufruct,' allowing them to transfer ownership while retaining the right to live in or manage the property. Legal experts suggest the current "panic scenario" is driven by fears of even higher future tax rates, citing past proposals for rates up to 27.5%. Additionally, a recent Federal Revenue directive from September 2025 requires updating property tax cadastres based on notary data, aligning them with real market values and further incentivizing early transfers.
The surge in property transfers to heirs in Campinas, driven by anticipated tax reform, highlights a common dynamic where individuals seek to preemptively mitigate future financial obligations. The shift from a flat to a progressive ITCMD rate, coupled with a move towards market-value assessments, represents a significant recalibration of wealth transfer taxation. This behavior underscores a broader societal trend of proactive financial planning in response to evolving regulatory landscapes, particularly concerning intergenerational wealth. The legal and financial systems are adapting to increased scrutiny on asset valuation and taxation, prompting individuals to navigate complex legal structures like 'donation with reservation of usufruct' to balance succession goals with asset control. Future policy discussions will likely focus on balancing revenue generation with economic efficiency and fairness in wealth transfer.
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