Brazil's inheritance tax overhaul will increase property transfer costs from 2026

Brazil is set to change the calculation of the state inheritance and donation tax (ITCMD) beginning in 2026, with the new rules taking the market value of properties as the base rather than historic or venal values. The shift, combined with a move toward progressive tax brackets—up to a national ceiling of 8% for high‑value estates—means families inheriting appreciated real estate could face substantially higher tax bills.

The reforms, part of the broader tax restructuring, also limit some deductions and allow states to consolidate successive donations, reducing the effectiveness of strategies that split transfers to stay in lower brackets. As a result, many families are accelerating estate planning actions such as lifetime donations, updating wills, and establishing family holding companies to manage assets and potentially lower tax exposure.

Data from the Brazilian Notarial College shows a sharp rise in donation deeds, with 185,861 registries in 2025—a 59% increase since 2020—and a corresponding surge in ITCMD collections, especially in the Southeast. Experts advise reviewing succession plans promptly to mitigate unexpected costs.