Brazil tax reform triggers urgent estate planning due to new ITCMD rules

Tax reforms in Brazil, specifically regarding the Imposto sobre Transmissão Causa Mortis e Doação (ITCMD), are driving a new wave of estate and wealth planning. Following Constitutional Amendment No. 132/2023 and the regulation of ITCMD via Complementary Law No. 227, sanctioned in January 2026, families and entrepreneurs are urgently re-evaluating asset transfer strategies.

A major change is the mandatory adoption of progressive tax rates. Previously, several states used fixed rates; for example, São Paulo currently applies a 4% rate. Under the new system, taxation will increase according to the value of the donated or inherited assets, up to a national ceiling of 8%.

Furthermore, the new legislation consolidates the use of market value as the calculation base for transmitted assets. This shift from historical or accounting values to market values is expected to significantly expand the taxable base, particularly for high-value real estate and corporate holdings. Consequently, effective organization of assets—including real estate, investments, and corporate interests—is becoming essential to mitigate rising tax burdens and ensure long-term continuity.