How does this regime affect individuals? The REARP allows individuals to update, to market value, real estate already declared in their Income Tax return and acquired up to December 31, 2024. This update charges an upfront and final tax on the difference between the old value and the updated value, at a rate of 4% — significantly lower than the traditional capital gains tax, which ranges from 15% to 22.5%.
What changes in practice? After joining, the updated value becomes the new acquisition cost of the property. In practice, this means that in the event of a future sale, tax will only apply to gains exceeding that value, rather than a potentially outdated historical cost. Depending on the situation, this approach may result in a significant reduction in the total tax burden.
What to consider before joining REARP? Joining the REARP should be preceded by a technical and individualized analysis, considering, among other factors:
- Whether the difference between the declared value and the market value justifies the update;
- Whether your asset planning allows for keeping the property for at least five years;
- Whether paying the tax — in full or in installments — is financially viable in the current scenario.
Attention to the deadline! The option for this regime must be formalized by 02/23/2026.
If the property is sold before the 5-year period from the date of joining:
- The effects of the REARP are disregarded;
- In practice, this results only in an advance tax payment, without the liquidity of an actual sale.
- The 4% tax is paid either in full, by the last business day of the month following enrollment, or in up to 36 installments, subject to the Selic rate.
