On 28 October 2026, Brazil's Federal Court of Accounts (TCU) approved the calculation of the reference rate for the CBS — one of the two new consumption taxes — at 11.3% for 2027 (case TC 006.529/2026-7). The Senate has until 15 December 2026 to confirm the rates by resolution; if it does not, the TCU figure applies automatically. For the first time, owners of Brazilian rental property have a real number to work with.
Scope note. This content addresses Brazilian law only. Matters governed by foreign law are handled in partnership with lawyers licensed in the relevant jurisdiction.
Context a foreign reader needs
Brazil is in the middle of replacing five consumption taxes (PIS, Cofins, ICMS, ISS and IPI) with two: the federal CBS and the subnational IBS. The transition runs from 2027 to 2033. Unlike a US sales tax, these apply to services and to the leasing of real property — rental income is inside the base. This is a separate layer from income tax: rent paid to a non-resident owner is already subject to 15% withholding at source in Brazil, collected in Brazil by the owner's local attorney-in-fact. And because Brazilian courts have exclusive jurisdiction over property located in Brazil, how the property is held also determines what a future Brazilian probate will look like.
What happened
Complementary Law 214/2025 reduces the IBS and CBS rates by 70% for the leasing of real property (art. 261, sole paragraph). Applied to the 11.3% reference rate, that is roughly 3.4% of gross rent in CBS from 2027, the year the CBS is charged and PIS and Cofins are abolished, while the IBS runs at a token 0.1% test rate.
Whether an individual owner falls inside the regime is set by art. 251, § 1, I: an individual becomes an IBS/CBS taxpayer on leasing when, in the previous year, two conditions are met together — total rental revenue above BRL 240,000 (monetarily adjusted, art. 251, § 5) and operations involving more than three distinct properties. Paragraph 2 brings the status forward into the current year if revenue exceeds the threshold by 20%, about BRL 288,000. A social reducer of BRL 600 per month per residential property applies (art. 260), but not to commercial property. Short-term residential lettings of up to 90 days — the Airbnb case — follow the hospitality rules instead (arts. 253 and 281, with a 40% reduction).
Finally, Decree 13,075/2026 requires individual CBS taxpayers to register for a CNPJ (a Brazilian tax ID for entities) and to issue tax documents from 1 January 2027.
The technical reading
The year that matters is this one. Article 251 looks back at the previous calendar year, so your 2027 status is decided by what your Brazilian portfolio does through 31 December 2026. There is nothing to decide in 2027; there is something to count in 2026.
Residence is not one of the tests. Article 251 asks about revenue and the number of properties, not about where the owner lives or pays tax. For a non-resident owner, the new tax therefore stacks on top of the 15% income tax already withheld at source — the decision-relevant figure is not 3.4%, it is 3.4% plus 15% on gross rent, before any US treatment of the same income.
The practical trap is counting. The threshold applies to the whole portfolio, not to one lease: apartments in different cities, different property managers, some held in co-ownership, one or two let short-term. Most owners abroad do not know their own number. And if the number puts them inside the regime, the CNPJ registration and invoicing obligations from 1 January 2027 require someone in Brazil with authority to act — which is a power-of-attorney problem before it is a tax problem, with the rules for non-residents still unsettled.
One common simplification is worth correcting. The 70% reduction belongs to the real-estate regime and does not distinguish individuals from companies: a Brazilian holding company pays the same IBS and CBS on rent. The real comparison between holding property personally and holding it through a Brazilian company is about the taxation of profits, compliance cost, and above all what happens on death — including whether a Brazilian probate will be needed over each individual property. That comparison already existed. What changed on 28 October is that it can now be run with a real rate instead of a guess.
Who this affects
- Brazilians resident in the United States or elsewhere who rent out property in Brazil
- Foreign nationals of any nationality who own rental property in Brazil
- Heirs living abroad who inherited already-tenanted Brazilian property
- Families whose Brazilian holding company earns mainly rental income
- Owners mixing short-term and conventional lettings in the same portfolio
What to do, and by when
- Close your 2026 count before 31 December: total gross rental revenue for the year and the number of distinct properties involved, including co-owned units and those vacant for part of the year.
- Separate conventional leases from short-term lettings in the portfolio, since the regimes and reductions differ and the classification affects both the base and the count.
- Review existing leases for who bears a new tax — whether there is a pass-through, rebalancing or review clause. Most leases signed before 2025 are silent on the point.
- Check that your Brazilian power of attorney covers what 2027 will require — CNPJ registration, issuing tax documents, withholding and filing — and that it is a public instrument, apostilled under the Hague Apostille Convention.
- Re-run the personal-ownership versus company comparison with the rates now known, weighing the recurring tax cost against the future cost of settling the estate in Brazil.
The cost of doing nothing
Entering 2027 without knowing whether your portfolio is inside or outside the regime means learning the answer from the first assessment — or from a lease that gives you no way to pass on a tax nobody contemplated when it was signed.
Editorial record
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Pillar: 6 — Ties to Brazil
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Related service (performed in Brazil): review of Brazilian lease agreements and tax pass-through clauses; apostilled public power of attorney and representation of non-residents; formation and review of Brazilian holding companies; registration compliance and succession planning for Brazilian real estate
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Editorial tier: Gold
Sources: - Agência Brasil, 28/10/2026 — TCU aprova cálculo da alíquota de referência da CBS em 11,3%: https://agenciabrasil.ebc.com.br/economia/noticia/2026-10/tcu-aprova-calculo-da-aliquota-de-referencia-da-cbs-em-113 · - Lei Complementar 214/2025 — texto oficial: https://www.planalto.gov.br/ccivil_03/leis/lcp/lcp214.htm · - Análise — pessoa física como contribuinte de IBS/CBS na locação (art. 251, LC 214/2025): https://www.barbieriadvogados.com/pessoas-fisicas-como-contribuintes-quando-o-aluguel-vira-atividade-empresarial/ · - CRC-MG — Emissão de CNPJ e de documentos fiscais por pessoas físicas contribuintes da CBS a partir de 1º/1/2027 (Decreto 13.075/2026): https://crcmg.org.br/noticias/emissao-do-cnpj-e-de-documentos-fiscais-por-pessoas-fisicas-contribuintes-da-cbs-comecara-em-1o-de-janeiro-de-2027/ · - IRRF sobre aluguel pago a não residente — DARF 9478, EFD-Reinf e responsabilidade do procurador: https://brasiltax.com/blog/nao-residente-no-brasil-imposto-de-renda-aluguel-imovel/
Notice
This content is strictly informational, under Provimento No. 205/2021 of the Federal Council of the Brazilian Bar Association (OAB), with no commercial or client-solicitation purpose. The practical guidance is general and does not substitute for analysis of a specific matter. Artificial intelligence assisted in research and drafting, under the review and technical responsibility of the signing attorney, in line with OAB Recommendation No. 001/2024.
Verification record
Sources were checked as of November 2, 2026, at the links listed above.
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Andrade & Cintra Advogados is a boutique law firm dedicated to Civil, Corporate and Real Estate Law, with a focus on Family and Succession Law, concentrated on estate and succession planning, the structuring of family and asset-holding companies, corporate governance and the organization of wealth for succession purposes — always with business purpose, substance and legal compliance. International practice in cooperation with Sintra Legal & Partners.
About the author
Dr. J. Guilherme de Andrade Cintra — Founding Partner · OAB/SP nº 220.915. Editorial co-authorship assisted by artificial intelligence (Anthropic Claude) as editor, under the review and responsibility of the signing attorney.
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