Santos sees surge in property transfers ahead of potential inheritance tax hike
The city of Santos, in São Paulo, Brazil, has experienced a significant increase in property transfers due to inheritance and donations. The number of registrations rose from 817 in 2020 to 1,401 in 2024 and 1,380 in 2025. This surge is attributed by the Brazilian Notarial College - São Paulo Section (CNB-SP) to discussions and the approval of Brazil's Tax Reform in 2023. The CNB-SP anticipates further increases as families seek to preemptively address potential financial impacts from complementary law nº 227/2026. This legislation, effective January 2027, introduces changes to the Imposto sobre Transmissão Causa Mortis e Doação (ITCMD), the tax on inheritances and donations, with potentially higher rates. Currently, São Paulo's ITCMD rate is 4%, but the new law allows for progressive rates, with a maximum limit of 8%. Fernanda Camargo, head notary at the 8th Notary Office of Santos, explained that while states can set initial lower rates, São Paulo has not yet approved a new table, maintaining the 4% rate until new state legislation is enacted. The new federal law also mandates that the ITCMD consider the market value of transmitted assets, which could broaden the tax base and increase costs in some cases. Despite recent records, the pace of transfers slowed in early 2026, with 432 public deed registrations by July. The CNB-SP advises families considering estate planning to seek specialized legal advice to evaluate the benefits of making asset donations under current rules. They caution against arbitrary donations, recommending instead a strategic approach to succession planning for legal and tax predictability, if it aligns with individual family circumstances.
The observed increase in property transfers in Santos ahead of potential ITCMD rate changes reflects a rational response by individuals to anticipated shifts in tax policy. This behavior highlights a common dynamic where taxpayers adjust their financial strategies to mitigate perceived future tax burdens. The impending changes, driven by broader tax reform, aim to modernize the tax system by incorporating market values and potentially progressive rates. This transition period presents both opportunities for proactive planning and challenges related to legal and tax complexity. As families navigate these changes, the emphasis on seeking specialized legal advice underscores the importance of informed decision-making in estate and tax planning, particularly in the context of evolving fiscal landscapes.
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