Brazil's Bahia and Espírito Santo record surge in property donations before ITCMD tax rise

In 2025, Bahia's notary offices recorded 2,763 public deeds of property donation, a 65% increase over 2020, while Espírito Santo logged 2,064 deeds, up 53% from the same year. Families are accelerating transfers to avoid higher taxes expected under the national tax reform, which will make the state inheritance and donation tax (ITCMD) progressive, potentially reaching up to 8% from the current 3% in Bahia and 4% in Espírito Santo. The reforms are slated to take effect in 2027, prompting a wave of succession planning among middle‑class owners.

Bahia's ITCMD revenue rose from R$165 million in 2020 to R$388 million in 2025, a 135% jump, underscoring the fiscal importance of the levy. Officials in both states are preparing legislative adjustments to align with the new federal guidelines. “O planejamento sucessório envolve um leque de possibilidades,” said Fabiana Aurich of the state notaries' union, noting that families must weigh tax costs against the benefits of early donation.