Taxpayers have been managing, in the courts of São Paulo, to avoid paying some municipalities the Real Estate Transfer Tax (ITBI) relating to property division and divorce, in specific situations involving the division of property with real estate.
One of these situations, according to the newspaper Valor Econômico on its website, involves the equal division of values. When, in the partition of R$ 1 million, for example, one party keeps a property worth R$ 500,000 and the other the same value in a financial investment, the municipalities charge the ITBI on the transfer of the property. In this case, it is understood that the party who kept the asset bought the other’s share.
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In a similar situation, there is collection when what is legally called an “excess of moiety or a non-proportional distribution of assets” occurs. In this case, when one of the parties keeps, for example, a property worth R$ 500,000 plus R$ 200,000 in a financial investment and the other only R$ 300,000. In this situation, the municipality charges ITBI on the asset, since it understands that it should have been divided, and additionally ITCMD to the State on the value received in excess in the division of money.
The municipal laws that provide for the collection use as a basis article 2017 of the Civil Code, according to which “in dividing the assets, the greatest possible equality shall be observed as to their value, nature, and quality.”
These charges, however, have been overturned by the courts. There are already decisions against the municipalities of São Paulo, whose ITBI rate corresponds to 3%, Campinas (2.7%), Indaiatuba (2%), São Vicente (3%), Santos (2%), and Birigui (2%).
Property division and divorce
In a case recently analyzed by the 14th Public Law Chamber of the Court of Justice of São Paulo (TJ-SP), the appellate judges were unanimous in denying an appeal by the City Hall of Campinas in a case involving a consensual divorce. They upheld the judgment that ordered the suspension of the collection and the return of the tax already collected.
Since the division of assets was not proportional, the municipality demanded the ITBI so that the changes in the real estate registries could be carried out. According to the decision, however, this was not the case because the transfer of the properties was made through an amicable division that resulted in an unequal split.
Furthermore, according to the decision, there is no proof that the transfer occurred with remuneration; on the contrary, since there was the collection of the ITCMD, which would demonstrate the gratuitous donation between the spouses.
For the rapporteur of the case, appellate judge Mônica Serrano, the Constitution is clear in determining that it is within the competence of the municipality to institute a tax on onerous transfers of real estate, “which did not occur in the case at hand. A mere supposition does not make reality. There was only a division of assets between the former spouses.”
Another case
The 15th Chamber of the TJ-SP also has a recent decision in favor of a couple who divorced in Birigui and made an equal distribution of their assets. The appellate judges upheld the judgment that ordered the municipality to issue a certificate of non-incidence of the ITBI tax in relation to the divided property.
According to the decision, “the division of assets constitutes a non-onerous act and represents merely the patrimonial division of assets already existing in joint ownership, ruling out any hypothesis of sale or transfer, and therefore ITBI does not apply.” See the full article on the newspaper’s website, here.
Source: Valor Econômico (clipping)
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