Angelo Ambrizzi
Lawyer at Marcos Martins Advogados
The purpose of this text is to study the doctrinal and jurisprudential understanding of what are the material and temporal criteria of the Matrix Rule of Tax Incidence – RMIT of the Real Estate Transfer Tax – ITBI.
This issue is relevant because there are municipalities that choose, through local legislation, mistaken concepts of both the taxable event and the moment when ITBI is levied.
By way of illustration, we will analyze the legislation of the Municipality of Campinas, which, like others, adopts the wrong requirements, as mentioned above.
This is because the legislation of this Municipality considers the moment of tax incidence to be the purchase and sale operation, whether this is materialized by contract or by corporate operations.
The normative instrument that regulates ITBI in Campinas is Law No. 12.391/05, which in its article 3 requires the taxpayer to pay the tax when the public or private instrument of transfer of the property is drawn up. Transcript:
Article 3: It shall be incumbent on the taxpayer to pay the tax when the instrument of transfer or constitution of rights in rem relating to the property is drawn up, even if the taxable event should, under the terms of civil law, occur later, with the refund of the amount paid being assured if the presumed taxable event does not occur.
It is clear that the Campinas legislation determines that the payment, and therefore the taxable event, of ITBI occurs with the formalization of the legal transaction.
In contrast to the position adopted by the municipality, there is another that considers the registration of the instrument of transfer at the real estate registry office to be the correct taxable event for ITBI, and that it is unacceptable to charge the tax based solely on civil sale and purchase transactions or corporate transactions involving the transfer of real estate.
This understanding seems more appropriate to the case.
The Federal Constitution granted taxing powers to the municipalities to institute a tax on the transfer of real estate, under the terms of article 156, item III:
Art. 156. Municipalities are responsible for imposing taxes on:
[…]
II – the “inter vivos” transfer, by any title, by onerous act, of immovable property, by nature or physical access, and of rights in rem over immovable property, except those of guarantee, as well as the assignment of rights to their acquisition;
The National Tax Code (CTN) provides for ITBI in Article 35 as follows:
Art. 35. The tax, which is the responsibility of the states, on the transfer of real estate and rights relating thereto has as its taxable event:
I – the transfer, by any title, of ownership or useful domain of real estate by nature or by physical access, as defined in civil law;
II – the transfer, under any title, of rights in rem in immovable property, except rights in rem of guarantee;
III – the assignment of rights relating to the transfers referred to in items I and II.
At the time the CTN was published, the competence to institute tax on the transfer of immovable property lay with the states. With the current Constitution, this power has been shared between the states and municipalities, so that the latter can institute the tax on the transfer of real estate for consideration and by inter vivos act, while the latter are responsible for instituting the tax due on transfers for free (causa mortis or donation).
The interpretation of the aforementioned articles shows that the materiality of the Property Transfer Tax, which is the responsibility of the municipalities, is the onerous transfer of ownership of immovable property.
It is therefore necessary to check in civil law when the transfer of ownership of immovable property takes place.
In this context, article 1.245 of the Civil Code states that the transfer of ownership of real estate only takes place with the registration of the transfer deed at the Real Estate Registry Office.
Art. 1.245. Ownership is transferred between living persons by registering the transferable title in the Real Estate Registry.
§ Paragraph 1 – Until the transfer deed has been registered, the seller shall continue to be regarded as the owner of the property.
The sole paragraph above reinforces the provisions of the caput, determining that until the transfer deed is registered, the seller remains the owner of the property.
Thus, if ITBI is levied on the transfer of ownership of real estate and this transfer only occurs with the registration of the transfer deed at the real estate registry office, it is clear that the taxable event only occurs with registration.
Before registration, therefore, the tax cannot be levied by the municipalities, as the taxable legal event has not occurred.
In this sense, the Federal Supreme Court and the Superior Court of Justice (STJ) have consistently ruled.
Below is the understanding of the STF in its most recent judgment.
INTERLOCUTORY APPEAL IN EXTRAORDINARY APPEAL WITH INTERLOCUTORY APPEAL. TAX LAW. TAX ON THE TRANSFER OF REAL ESTATE – ITBI. TRIGGERING EVENT. PROMISE TO BUY AND SELL.
1. The transfer of ownership of the property becomes effective upon public registration, at which point the Real Estate Transfer Tax (ITBI) is levied, in accordance with the case law of the Federal Supreme Court. Therefore, the promise to buy and sell does not represent a taxable event capable of giving rise to a tax obligation. Precedents.
2. Interlocutory appeal dismissed, with the imposition of a fine, under the terms of art. 1.021, §4, of the CPC.
(STF; ARE 930585 AgR / SP – SÃO PAULO; Rapporteur: Justice Edson Fachin; Date of Judgment: 09/30/2016; Date of Publication: 10/18/2016) (emphasis added)
Although the Supreme Court decision handed down in 2016 is very clear as to when ITBI is levied, it should be pointed out that the Supreme Court has been ruling in the same direction for many years, so much so that other judgments are cited in the Rapporteur’s vote. Below is a transcript of part of the vote:
See, by the way, the summary of RE-RG 748.371, reported by Justice Gilmar Mendes, DJe 1.08.2013:
“Allegation of curtailment of the right of defense. Issue relating to the alleged violation of the principles of adversarial proceedings, broad defense, the limits of res judicata and due process of law. Judgment of the case depends on prior analysis of the proper application of infra-constitutional rules. Rejection of general repercussion.”
[…]
“INTERLOCUTORY APPEAL IN EXTRAORDINARY APPEAL WITH INTERLOCUTORY APPEAL. REAL ESTATE TRANSFER TAX. TAXABLE EVENT PROMISE OF PURCHASE AND SALE. IMPOSSIBILITY. The tax obligation arises from the verification of the occurrence of the factual situation provided for in the tax legislation, which, in this case, derives from the transfer of immovable property. Under civil law, the transfer of ownership of the property becomes effective upon registration. Thus, claiming ITBI on the execution of a promissory purchase and sale agreement implies considering the credit to have been constituted before the taxable event occurred. Interlocutory appeal dismissed” (ARE 805.859-AgR/RJ, Rel. Min. Luís Roberto Barroso)
[…]
“CIVIL PROCEDURE. INTERLOCUTORY APPEAL IN EXTRAORDINARY APPEAL WITH INTERLOCUTORY APPEAL. PRELIMINARY GENERAL REPERCUSSION. DEFICIENT REASONING. APPELLANT’S BURDEN. ABSENCE OF PREQUESTIONING. STF PRECEDENTS 282 AND 356. TAXATION. ITBI. PROMISSORY PURCHASE AND SALE AGREEMENTS. UNDUE COLLECTION. PRECEDENTS. INTERLOCUTORY APPEAL DISMISSED”. (ARE 798.004-AgR/RJ, Reporting Justice Teori Zavascki)
[…]
“INTERLOCUTORY APPEAL IN EXTRAORDINARY APPEAL WITH INTERLOCUTORY APPEAL. REAL ESTATE TRANSFER TAX. TAXABLE EVENT PROMISE OF PURCHASE AND SALE. IMPOSSIBILITY. The tax obligation arises from the verification of the occurrence of the factual situation provided for in the tax legislation, which, in this case, derives from the transfer of immovable property. Under civil law, the transfer of ownership of the property becomes effective upon registration. Thus, claiming ITBI on the execution of a promissory purchase and sale agreement implies considering the credit to have been constituted before the taxable event occurred. Interlocutory appeal dismissed” (ARE 805.859-AgR/RJ, Rel. Min. Luís Roberto Barroso).
The STJ follows the same line adopted by the Supreme Court, safeguarding its sphere of competence.
TAXATION. ITBI. TRIGGERING EVENT. OCCURRENCE. REGISTRATION OF TRANSFER OF IMMOVABLE PROPERTY.
1. The triggering event for transfer tax is the transfer of real estate ownership, which only takes place when the legal transaction is registered with the competent office.
2. Interlocutory appeal not granted.
(STJ; AgRg nos EDcl no AREsp 784819 / SP; Rapporteur: Justice HERMAN BENJAMIN; Date of Judgment: 03/17/2016; Date of Publication: 06/01/2016) (emphasis added)
CIVIL PROCEDURE. VIOLATION OF ART. 535 OF THE CPC. INEXISTENCE. DUE CONSIDERATION OF THE APPEAL ISSUES. DISAGREEMENT WITH THE THESIS ADOPTED. TAXATION. ITBI. TRIGGERING EVENT. PROMISE TO BUY AND SELL. NOT APPLICABLE. SUMMULA 83/STJ. DECREE 16.419/06. LOCAL LAW. SÚMULA 280/STF.
[…]
2. The case law of this Court has established that the triggering event for ITBI is the registration of the transfer of ownership of the property, which is not required in the case of a promissory purchase and sale agreement. Precedent 83/STJ therefore applies.
[…]
Interlocutory appeal dismissed.
(STJ; AgRg no AREsp 813620 / BA; Rapporteur: Justice HUMBERTO MARTINS; Date of Judgment: 17/12/2015; Date of Publication: 05/02/2016) (emphasis added)
It is clear, therefore, that the taxpayer has the right not to be subject to payment of ITBI prior to registration of the instrument transferring the property at the real estate registry office, since it is clear that the ITBI taxable event only occurs with the registration of the title transferring the property at the competent office, so that the tax cannot be demanded without this formal act of transferring the property.
For taxpayers who are obliged to pay ITBI when the legal transaction (sale and purchase agreement and corporate acts) takes place, it is necessary to file a lawsuit requesting the non-existence of a legal tax relationship in order to remove the requirement to pay ITBI before registering the transfer deeds at the competent real estate registry office, thus recognizing that the tax is only levied at the time of registration.
