ITCMD Rates by State Brazil 2026 — Complete Table

ITCMD (Imposto sobre Transmissão Causa Mortis e Doação) is Brazil’s inheritance and gift tax, levied by each of the 26 states and the Federal District individually. Unlike a federal tax with uniform rates, ITCMD rates, brackets, exemptions, and procedures vary dramatically across states — from Santa Catarina’s former flat 1% on small estates to São Paulo’s 4% flat rate that is now transitioning to progressive brackets under LC 227/2026. The Constitutional ceiling is 8% (CF Art. 155 §1° I, as regulated by Resolução do Senado 9/1992), and LC 227/2026 now mandates that all states adopt progressive rates within this ceiling. Understanding which state’s rate applies to your situation — and whether strategic domicile planning can reduce your exposure — is essential for anyone with assets in Brazil.

Complete ITCMD Rate Table — All 27 States (2026)

Important notes:

• Rates and thresholds change frequently as states implement LC 227/2026
• “Implementing reform” means the state is in the process of adopting progressive rates per the LC 227/2026 mandate
• Exemption thresholds apply to the total estate value or donation value; amounts below are exempt
• Some states have separate rates for inheritance (causa mortis) and donation (doação)

States Most Relevant to Foreigners

São Paulo (SP)

São Paulo is the financial and commercial capital of Brazil, where most foreign investment and expat activity concentrates.

• Current rate: Flat 4% on all inheritance and donation values above the exemption
• Exemption: Donations up to R$90,800 (2,500 UFESPs); residential properties up to 2,500 UFESPs for inheritance
• Post-reform: São Paulo must adopt progressive rates under LC 227/2026. A bill is pending in the state legislature that would implement brackets from 2% to 8%. The transition timeline is uncertain but expected by 2027.

• “São Paulo at flat 4% has been the great equalizer — every estate paid the same rate regardless of size. Progressive rates change the math entirely. A R$10 million estate will see its ITCMD roughly double, making pre-reform planning the highest-ROI engagement I offer.”

— Zachariah Zagol, Founding Partner, OAB/SP 351.356

Practical impact: São Paulo’s move from flat 4% to progressive up to 8% will approximately double the ITCMD bill on estates above R$5,000,000

Rio de Janeiro (RJ)

• Current rate: Progressive 4-8%, with rates increasing based on estate/donation value
• Brackets (inheritance): 4% (up to ~R$400,000), 4.5% (~R$400K-R$800K), 5% (~R$800K-R$1.6M), 6% (~R$1.6M-R$3.2M), 7% (~R$3.2M-R$6.4M), 8% (above ~R$6.4M)
• Already compliant with LC 227/2026 progressive requirement

Santa Catarina (SC)

Historically a planning-friendly state with the lowest ITCMD rates in Brazil.

• Former rate: Flat 1% (inheritance) and 1% (donation) — making it extremely attractive for domicile planning
• Current rate: Progressive 1-8% after 2024 reform
• Impact: SC’s rate increase eliminated the most aggressive domicile planning strategy in Brazil (see below)

Minas Gerais (MG)

• Current rate: Flat 5%
• Post-reform: Must transition to progressive. Expected to range from 2% to 8%.

Paraná (PR)

• Current rate: Flat 4%
• Exemption: R$80,000 for inheritance; R$40,000 for donations
• Post-reform: Must adopt progressive rates

Distrito Federal (DF)

• Current rate: Progressive 4-6%
• Post-reform: May need to expand brackets up to 8%

Which State’s ITCMD Applies?

The applicable state depends on the type of asset and the deceased’s/donor’s domicile:

Real Property (Imóveis)

Rule: ITCMD is collected by the state where the property is located (CF Art. 155 §1° I).

• Property in São Paulo → SP collects ITCMD
• Property in Bahia → BA collects ITCMD
• This applies regardless of where the owner lived

Movable Property (Bens Móveis) — Including Bank Accounts, Investments, Vehicles

Rule for inheritance (causa mortis): ITCMD is collected by the state where the probate proceedings are processed, which is generally the state of the deceased’s last domicile (CF Art. 155 §1° I; CPC Art. 48).

• Deceased domiciled in São Paulo with bank accounts in Rio de Janeiro → SP collects ITCMD on the movable assets

Rule for donations: ITCMD is collected by the state where the donor is domiciled (CF Art. 155 §1° II).

Foreign Assets — The LC 227/2026 Change

Before LC 227/2026, ITCMD on assets located abroad was constitutionally uncertain. The STF had ruled in RE 851.108 (2021) that states could not collect ITCMD on foreign assets without a federal complementary law authorizing it. The Receita Federal enforces complementary federal reporting requirements on foreign asset declarations.

LC 227/2026 resolved this: States may now collect ITCMD on foreign assets. The applicable state is:

• For inheritance: the state of the beneficiary’s domicile (for movable assets) or the state of the property (for Brazilian real property of a foreign-domiciled decedent)
• For donations: the state of the donor’s domicile (if Brazilian) or the donee’s domicile (if the donor is foreign-domiciled)

This is a major change for foreigners. Previously, a US-domiciled person’s US bank account inherited by a Brazilian heir was arguably ITCMD-free. Under LC 227/2026, the heir’s domicile state collects ITCMD.

For full analysis of the reform, see our LC 227/2026 guide.

Understanding Progressive vs. Flat Rate Impact

The transition from flat to progressive rates fundamentally changes the ITCMD math for estate planning:

Flat Rate Example (Current São Paulo — 4%)

Progressive Rate Example (Post-Reform Projection — 2-8%)

Key insight: Progressive rates help small estates (under R$2M) and significantly hurt large estates (over R$5M). The planning urgency is proportional to estate size — families with R$10M+ estates should accelerate donations and holding company structuring before their state implements the higher brackets.

Can You Change Domicile to Reduce ITCMD?

The Strategy

Since movable-asset ITCMD follows the deceased’s last domicile, moving from a high-rate state (São Paulo at 4%, transitioning to 8%) to a low-rate state could theoretically reduce ITCMD exposure.

The Reality

1. Genuine domicile change is required: Brazilian tax authorities and courts examine whether the domicile change was genuine (new home, social ties, voter registration, employment, healthcare) or artificial (merely renting an apartment to claim a different address). Sham domicile changes are challenged and disregarded.

2. SC’s rate increase closed the most popular loophole: Santa Catarina’s former 1% flat rate attracted domicile planning. The 2024 rate increase to progressive 1-8% eliminated most of the advantage.

3. Real property ITCMD doesn’t move: If your primary asset is a São Paulo apartment, SP collects ITCMD regardless of where you live. Domicile planning only helps with movable assets (bank accounts, investments, vehicles, company quotas).

4. Timing matters: Some states require a minimum period of domicile (1-2 years) before accepting the domicile claim for ITCMD purposes. Moving shortly before death invites challenge.

5. Cost-benefit: The cost of genuinely relocating (selling/buying property, moving, new registrations) must be weighed against the ITCMD savings on movable assets.

6. LC 227/2026 uniformity pressure: As all states move toward progressive rates with an 8% ceiling, the spread between states narrows. The advantage of domicile planning decreases as states converge toward similar rate structures. What was once a 7% differential (SP at 4% vs. BA at 3.5-8%) becomes much smaller when SP also implements 2-8%.

When It Still Makes Sense

“Domicile planning is not about finding the cheapest state — it is about making a genuine life change that happens to carry tax benefits. SEFAZ authorities actively investigate sham relocations, and the penalty for a failed domicile claim is the full tax plus 20% surcharge.” — Zachariah Zagol, Founding Partner, OAB/SP 351.356

Domicile planning remains viable when:

• You have a genuine reason to relocate (retirement, family, lifestyle)
• Your movable assets significantly exceed your real property value
• The rate differential is substantial (e.g., moving from a state implementing 8% maximum to one with a lower effective rate on your estate size)
• You make the move well in advance (5+ years before anticipated death)

Planning Implications

1. State Selection for Holding Companies

A holding company’s registered office determines which state collects ITCMD on the quota transfers. If your holding is registered in São Paulo but you could establish it in a lower-rate state (where you have a genuine connection), the ITCMD savings on quota transfers could be significant.

2. Donation Timing Under Progressive Rates

Progressive rates create an incentive to spread donations over multiple years. If your state allows annual exemptions and the progressive brackets reset per transaction, making several smaller donations over time may result in a lower aggregate rate than one large donation. See our donation planning guide.

3. Pre-Reform Action

States still using flat rates (SP at 4%, PR at 4%, MG at 5%, ES at 4%) will eventually transition to progressive rates up to 8%. Executing donations or holding company transfers while flat rates are in effect locks in the lower rate on those transfers.

4. Cross-State Asset Distribution

If you own real property in multiple states, your total ITCMD exposure is the sum of each state’s assessment on its respective properties. Estate planning must account for the combined rate across all states where you hold assets.

Frequently Asked Questions

Can I pay ITCMD in installments?

Most states allow installment payment (parcelamento). São Paulo allows up to 12 installments for ITCMD. Some states allow more. Interest (SELIC or state-specific rate) applies to installment payments. The installment plan must be approved by the state tax authority, and the partition deed or probate sentence cannot be finalized until ITCMD is fully paid or the installment plan is active.

What if the state disagrees with my declared asset values?

States can challenge declared values and assess ITCMD on a higher basis. In São Paulo, the SEFAZ uses a reference value system for real property. If you disagree with the state’s assessment, you can file an administrative challenge or, ultimately, a judicial challenge. This process adds time and cost to the probate.

Do foreigners pay higher ITCMD rates?

No — ITCMD rates are based on asset value and the applicable state, not the taxpayer’s nationality. Foreigners and Brazilians pay the same rates.

Is there a federal inheritance tax in Brazil?

No. ITCMD is exclusively a state tax. Brazil has no federal estate or inheritance tax (unlike the US, which has a federal estate tax). However, income tax on capital gains at the federal level can apply in certain succession scenarios, and LC 227/2026 is a federal law that regulates ITCMD parameters for all states.

Why ZS Advogados?

ITCMD planning requires state-specific knowledge that most law firms — even large ones — do not maintain across all 27 jurisdictions. Which state applies, what rate applies to your specific estate value, and whether a structural change (holding, donation, domicile) reduces your exposure are questions that require current, state-level analysis.

Zachariah Zagol — the first American admitted to the Brazilian Bar (OAB/SP 351.356), with an LL.M. from USC Gould School of Law — tracks ITCMD rates and reform implementation across all states relevant to his international clients. He structures estate plans that account for multi-state exposure, LC 227/2026 transition timing, and the interaction between Brazilian ITCMD and US estate tax.

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