Brazil's states move to raise inheritance tax rates to up to 8%

Several Brazilian states are preparing to increase the rates of the inheritance and donation tax (ITCMD). Under Constitutional Amendment 132, states may set progressive brackets up to 8%. Minas Gerais proposes a tiered structure of 3%, 5% and 8% instead of a flat 5% rate, while São Paulo is considering rates that also reach 8%.

The broader tax reform makes progressivity mandatory nationwide, assigns tax collection to the state where the decedent resided, and standardises rules for assets abroad. The prospect of higher rates has spurred a surge in lifetime donations, especially of real estate, as families try to lock in current tax levels. Experts caution that such pre‑emptive transfers may not always reduce overall tax liability and that updated property valuations could increase tax bases far more than the rate hike itself.