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Taxes on Real Estate Funds

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Real Estate Investment Funds (FII) have gained increasing popularity among investors due to their attractive profitability and the possibility of investing in real estate without the need to buy an entire property. However, an issue that often arises is related to taxes on Real Estate Funds. This article will address this topic to help you understand better.

First of all, it is important to understand what Real Estate Funds are. FIIs are funds that invest in real estate assets, either in the acquisition of physical properties (such as commercial buildings, logistics warehouses, etc.) or in financial securities related to the real estate market (such as CRIs, LCIs, etc.). The income from these funds comes from renting real estate, selling real estate or earnings from financial securities.

In terms of taxation, FIIs have a very specific tax treatment. The first thing to understand is that FIIs are exempt from income tax (IR) at source. This means that the income distributed by the funds does not have the IR withheld at source, as with other types of investments. However, this does not mean that these earnings are exempt from income tax. The exemption at source exists to facilitate fund management, but the investor may still have to pay income tax on these earnings.

FiI taxation is divided into two parts: income taxation and capital gain taxation. FII income is taxed at source at the rate of 20%. This means that if you receive an income of R$1000, you will have to pay R$200 in income tax. However, this taxation only occurs when the income is distributed by the fund. If the proceeds are reinvested by the fund, there will be no taxation.

The capital gain is taxed when the investor sells his shares of the fund. The IR rate on capital gains is 20%, regardless of the amount of the gain. This means that if you sell your shares for more than you paid for them, you will have to pay 20% income tax on the difference. For example, if you bought a share for R$100 and sold it for R$120, you will have to pay R$4 in income tax (20% of R$20).

A special feature of FIIs is that they are exempt from income tax for individuals when sold on the secondary market and the investor owns less than 10% of the fund's shares. This means that if you sell your shares on the stock exchange and have less than 10% of the fund's shares, you will not have to pay income tax on the capital gain. This exemption only applies to sales of up to R$ 20,000 per month.

In summary, the taxation of FIIs is a bit complex, but it is important to understand so as not to have surprises when declaring income tax. Income is taxed at source at a rate of 20%, while capital gains are taxed at a rate of 20% when shares are sold. However, there is an exemption for sales of up to BRL 20,000 per month in the secondary market for investors who own less than 10% of the fund's shares.

It is important to remember that tax laws can change and that it is always good to consult a tax professional or the Internal Revenue Service for clarification. Furthermore, tax treatment may vary depending on the type of FII, so it is important to read the fund's regulations before investing.

FIIs are a great option to diversify your portfolio and invest in real estate more affordably. However, like any investment, it is important to understand all aspects, including taxation, before investing.

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