ITBI FOR REAL ESTATE ACQUIRED AT AUCTION

The acquisition of real estate by judicial auction can be a profitable business, since the purchase price is below the market value. However, the advantage did not extend to Real Estate Transfer Tax – ITBI, which was calculated by the municipal tax authorities according to the market value of the property and not the auction price. Faced with this issue, many taxpayers have filed lawsuits in order to review this understanding and have obtained favorable decisions, including in the Superior Court of Justice – STJ. The issue is being pacified with regard to public auction, however, it is possible that the position will gradually be applied to extrajudicial auctions.