In early March, the Brazilian Federal Revenue consolidated through Normative Instruction (IN) No. 2179/2024, the tax regulation of special regimes applicable to real estate developments and the construction of housing units under the Minha Casa, Minha Vida (MCMV) and Casa Verde e Amarela (CVA) programs.

This IN centralizes all rules concerning the Special Taxation Regime (RET) applicable to real estate developments. If the requirements for the RET benefit are met, the real estate development may benefit from reduced rates for IRPJ, CSLL, PIS, and COFINS, currently set at 1% for social interest residential property projects and 4% for other developments (rates subject to changes due to tax reform).

Recently, IN 2199/2024 was published, modifying Article 11 of the original IN. The new regulation establishes that the qualification of the real estate development for RET-Development will be declared through an Executive Declaratory Act, issued by the Tax Auditor of the Federal Revenue, after a digital procedure that will be available to taxpayers starting January 1, 2025.

Until this date, the option for RET-Development may be made via the e-CAC portal, provided that the other requirements of IN 2179/2024 are met.

Once the option for RET-Development is made, it is irrevocable and will remain valid as long as there are credit rights or obligations of the developer towards the purchasers of the properties.

The Tax Department of Marins Bertoldi Lawyers closely monitors the developments of the topic and is fully available to clarify any doubts and delve deeper into each business reality.

By Gabriel de Araujo Garcez Hoerner and Ana Caroline Ferreira