The tax authorities will use the "CPF (Brazilian taxpayer ID) of properties" to tax undeclared rent and fine taxpayers.

Starting in 2026, property owners who informally rent out properties will face unprecedented tax scrutiny with the "CPF dos Imóveis" (Property Taxpayer Identification Number). The Brazilian Real Estate Registry (CIB) will allow the Federal Revenue Service to automatically identify those who omit rental income, applying fines that can reach 150% of the amount owed. The change, driven by the tax reform on rentals, will integrate data that is currently scattered, closing loopholes for tax evasion.

With the "CPF of properties," the Federal Revenue Service will be able to cross-reference data that is currently scattered across registry offices, city halls, banks, and various public agencies. In addition to fines, the Federal Revenue Service will be able to retroactively collect unpaid taxes for the last five years. This change is driven by the regulation of the tax reform on consumption, which establishes an integrated monitoring system with the new taxation.

How will the "CPF for Real Estate" work?

The CIB is the tool that, starting in 2026, will give the Federal Revenue Service the ability to monitor assets and real estate transactions in the country. It will function as a unique national identifier for each property, centralizing information that is currently scattered across various agencies.

The end of data dispersion.

Centralization solves a problem. Currently, property control is fragmented: registry offices use General Property Registry (RGI) registration numbers, municipalities use property registrations for the Urban Property Tax (IPTU), and Incra monitors rural properties. These systems do not communicate with each other, allowing loopholes for tax evasion.

With the implementation of the "CPF for Properties," this compartmentalization ends. According to Vinicius Cunha, tax lawyer and partner at MCW Advogados, the objective is "to establish a unique identification number for each property, bringing together information that was previously fragmented."

To enable integration, the Federal Revenue Service published Normative Instruction 2,275/2025, regulating the CIB and establishing rules for data sharing through the National System for Territorial Information Management (Sinter). The new unique identifier must appear in deeds, records, and other notarial acts. Notaries and registrars must electronically transmit the data to Sinter.

How will the IRS use the "CPF of properties" to identify tax evaders?

With this infrastructure in operation, tax authorities gain unprecedented power. The CIB will allow for automated monitoring. Tax administrations will gain the ability to track and audit real estate transactions through cross-referencing information.

With the unified system, the Internal Revenue Service will be able to identify inconsistencies between:

• Income Tax Returns.
• Occupancy records (tenant's declaration).
• Formal contracts.

Samuel Miranda, a tax law specialist, warns that the net is closing in. Starting in 2026, tenants will be required to declare that they live in rented accommodation and to disclose the identity of their landlord. "When a tenant declares, the Internal Revenue Service automatically cross-references the data. If the landlord has not declared the income, an audit will follow."

In addition to the tenant's declaration, the tax authorities will not rely solely on the landlord's declaration. Methods for identifying omissions will multiply:

• Tenant's declaration: The tenant must indicate who the landlord is, and the system will automatically cross-reference the information.
• Transactions through real estate agencies: Even if the owner and tenant omit it, the real estate agency is obligated to declare the commission received, indicating from whom it was received and to whom it was paid.
• Monitoring Pix and banks: Transactions above R$ 2,000 generate information that may lead to the taxpayer being summoned, although they do not serve as direct legal proof.

Given this cross-referencing of data, evading income tax through rental income will become more difficult.

The penalties for those who omit income.

Once the omission is identified, the consequences are immediate. For owners who operated informally, receiving rent "under the table," the deadline for regularization ends on December 31, 2025. From January 1, 2026, Complementary Law 214/2025 will institute automated inspection mechanisms, and those who omit income will be subject to penalties.

Cunha warns that taxpayers who omit rental income "may face fines of up to 150%". In addition, the Internal Revenue Service may retroactively collect unpaid taxes for the last five years.

Samuel Miranda points out that the debt grows due to the fine and the adjustment based on the Selic rate. "With the Selic rate high and the fine, the interest increases the debt. Considering the last five years, a debt of R$ 10,000 can more than double."

In more serious situations, the penalties are aggravated. In cases of fraud or deceit, the owner may commit a tax crime, punishable by two to five years imprisonment. Although the crime may be suspended upon payment of the amounts due, the collection by the Federal Revenue Service includes fines, inflation adjustments, and interest, without discounts.

The new taxation on rentals: who will pay IBS and CBS?

In addition to scrutinizing omitted income, the tax reform brings a structural change to the taxation of rental income. By replacing PIS, Cofins, ICMS, and ISS with the new Goods and Services Tax (IBS) and Goods and Services Contribution (CBS), it broadened the tax base. Previously, property rentals did not qualify as either services or goods, thus remaining outside the scope of these taxes.

With the new model (IBS and CBS combined), the scenario changes. Leasing becomes taxable. For residential properties, the effective rate will be around 11%. For commercial properties, the rate will be between 15% and 20%.

When does an individual pay the new tax?

However, not all property owners will be affected by the new taxation. The Federal Revenue Service will not tax all rental income from individuals. The IBS/CBS tax on rentals, starting in 2027, will only apply when the volume of business is considered an economic activity.

Tax expert Bianca Xavier, a professor at FGV Direito Rio, explains that, to qualify under the rule, the landlord must meet two requirements simultaneously:

• Number of properties: Owning more than three rented properties (i.e., starting with the fourth property).
• Annual income: receiving more than R$ 240,000 per year exclusively from the rental, assignment, or lease of these properties.

The law considers the performance of the previous year. If the individual meets both criteria in 2026, they will pay the IBS/CBS tax starting in January 2027. The amount of R$ 240,000 will be adjusted annually by the IPCA (official inflation index).

How to regularize undeclared rent and avoid fines.

Given this scenario of increased scrutiny and new tax rules, regularization becomes urgent. Landlords with undeclared old rental income must act before the CIB system comes into effect in 2026.

Experts suggest that the best strategy is regularization through voluntary disclosure. By correcting the situation before being notified, the taxpayer avoids fines and tax evasion.

The process requires correcting previous tax returns, including rental income and proof of deductible expenses (such as property tax and condominium fees). The debt can be paid in installments of up to 60 months directly on the Federal Revenue Service website.

Individual or holding company: which is the best option?

Beyond regularization, property owners need to assess the best structure for the future. With increased oversight through the "CPF of properties" (a Brazilian individual taxpayer registration number) and the growing complexity of calculations, the decision to keep assets under personal ownership (PF) or transfer them to a legal entity (PJ) becomes strategic.

Is equity holding worth it?

For owners with multiple properties and operations involving buying, selling, and renting, a holding company tends to be advantageous.

The main difference lies in the use of tax credits. Legal entities that act as IBS/CBS taxpayers can take advantage of tax credits on acquisitions. A company that pays tax on the purchase of a service or asset (such as land) deducts this amount when it sells the constructed property. This reduces the tax burden and increases competitiveness.

In addition to leveraging tax credits, migrating to an asset holding company can reduce the income tax rate. For individuals, the tax rate on rental income can reach 27.5%. For legal entities, it can drop to around 11.33%.

Miranda emphasizes that if the owner has a property that generates income of R$ 10,000 per month or more, opening a holding company can already be beneficial in reducing the tax burden.

For those who choose this structure, time is short. The transfer of real estate to a holding company must be completed by 2025. Samuel Miranda warns: "Ideally, the transfer should be done by 2025. The Supreme Federal Court [STF] is judging the maintenance of the ITBI [Property Transfer Tax] exemption. If the exemption is lifted, transfers will become more expensive."

When does the individual still make sense?

A holding company isn't the solution for everyone. For those who own properties for personal use or with low turnover, or who don't meet the IBS/CBS criteria, keeping the assets in the name of the individual may make sense. However, the individual will not have access to tax credits.

The impact on the tenant's wallet.

The changes don't just affect homeowners. The real estate market and tenants, who are already facing rising costs and a housing shortage, will feel the effects of formalization and the new taxation.

IBS and CBS tax pass-through to rent.

Owners and property managers, facing pressure to formalize and pay the new taxes, tend to pass these costs on to tenants.

Andressa Sehn da Costa, a partner at Rafael Pandolfo Advogados Associados, points out that the new rule could double the tax burden on rentals. Currently, rentals brokered by legal entities are taxed at 3.65%. With the IBS and CBS, the taxation on residential rentals will rise to approximately 11%. For commercial rentals, the rate will be between 15% and 20%.

The impact on your wallet is direct. A residential rent of R$ 2,000 per month will see an increase of approximately R$ 150 per month in taxes passed on, totaling R$ 1,800 more per year. For commercial rents, the impact will be even greater.

To avoid conflicts, Cunha advises landlords to review their rental agreements. They need to include clauses in the lease agreements, through addendums, that expressly provide for the transfer of the amount related to IBS and CBS.

"CPF of properties" leads to risk of increased property tax.

In addition to the transfer of IBS and CBS, there is another risk on the horizon. The CIB, by unifying data and creating a national information system, brings an indirect consequence: pressure on the IPTU (property tax).

The Brazilian Federal Revenue Service will annually define a reference value for each property, calculated based on market data, which will serve as a parameter for real estate transactions and tax returns.

Although IPTU (Property Tax) is a municipal tax and not part of the Tax Reform, municipalities will have access to this data.

Lawyer Eduardo Natal, partner at the law firm Natal & Manssur Advogados, believes that the reference value tends to become a parameter for tax audits, increasing the cross-referencing of information and the detection of tax discrepancies in real estate transactions.