Brazilian real estate funds and Fiagro before the IBS and the CBS

Supplementary Law 214/2025 defined in an innovative way the position of investment funds before the IBS and the CBS. As a rule, funds are not taxpayers of the new taxes. Real estate investment funds and Fiagro, however, received a specific regime, in which non incidence ceases to be automatic and becomes conditional on express statutory requirements.

The statutory requirements for the exception

Under art. 26 of Supplementary Law 214/2025, as amended by Supplementary Law 227/2026, the FII and the Fiagro are not treated as taxpayers when their quotas are admitted to trading on an exchange or organized over the counter market, the fund has at least one hundred quotaholders and no individual quotaholder, alone or together with related persons, holds twenty percent or more of the quotas. The test is objective and continuous, so that the supervening loss of any requirement subjects the fund to the regular regime as a taxpayer.

Funds that become taxpayers are subject, in transactions with real property, to the specific regime of the supplementary law, which provides base reductions and a rate reduction for lease, rental and onerous assignment, under art. 261 and the related provisions of the real estate chapter.

The irrevocable election for the regular regime

The statute allows a fund that meets the non incidence requirements to elect, nonetheless, the regular IBS and CBS regime. The election is irrevocable and must be weighed rigorously. It is attractive, in essence, to funds whose tenants are taxpayers able to take credits on the rents paid, in which case the output tax is neutralized along the chain and the fund starts taking credits on its own acquisitions, from works to property management services. For portfolios of individual tenants, the election tends to represent cost without countervailing benefit.

Practical repercussions

Administrators and managers should revisit fund regulations, verify the composition of the quotaholder base against the new thresholds and reassess ongoing lease agreements, whose tax burden may change during the transition. In property acquisitions by funds, diligence now includes projecting the treatment of the seller and of the fund itself under the new system, an element that becomes part of pricing and of the relevant contractual representations.

This article is for general information only and does not constitute legal advice. For guidance on specific situations, please contact our team at contato@gotlibrocha.com.br.