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01/28/26I'm in the process of applying for a VITEM XIV visa, and have been doing a lot of reading through this site for help. Can someone please tell me if I would be subject to Brasilian income tax on the profit after I sell my home in the US? Thank you for any help on this!

Jim - @chefjim

Hi, Jim!  I put my condo on the market before I moved to Brazil in 2017, but the sale wasn't finalized until 2018, by which time I was in Brazil and already a legal resident.  So this was one of the first questions that I asked my Brazilian accountant when she was preparing my 2018 Brazilian Income Tax return.  The answer at the time was a clear "No". 

The Brazilian tax rules -- like those in the US and many countries -- get tweaked constantly every year, and there have been a lot of changes in the intervening years, so while I imagine that the response would still be "no", as soon as you're settled finding a Brazilian accountant that you feel comfortable with and discussing this as part of your overall tax planning should be high on your To-Do list.

I agree with Abthree. When I sold in the UK many years ago, the answer was no. When I sold in Florida a few years ago, the answer was still no.

Like @abthree and @Peter Itamaraca I researched this question thoroughly before becoming a Brazil resident.   

The answer I received was identical:  the eventual sale of pre-residency real estate (in my case, a NYC condo several years ago), would be Brazil tax-exempt post-residency. 

The "catch," or so I was told, was that I had to declare the holding on the first Brazil tax return following residency; otherwise, the exemption would not apply and would be fully taxable, which would definitely be a problem in the future if I wanted to bring the sale proceeds to Brazil and justify the origin. 

So this evenually showed up on local returns as a Brazil tax-exempt capital gain.

@chefjim, I hate to be a bearer of potential bad news, but just as @abthree warned above, with the relentless quest of Brazil tax authorities for more revenue,  it would appear that this tax exemption has been eliminated, as of January 2025, via Lei 14.754/2023 as regulated by Instruçao Normativa 2.180/2024.   

Disclaimer:  Please note that I am neither a Brazil CPA nor tax lawyer by trade; I just follow these issues closely given a former life in corporate finance in Brazil/overseas. 

Let me try and summarize the major effects on expats of this law.

Before this law took effect,  expats had two major local tax advantages:

1. Overseas investments originally denominated in foreign currency were formerly exempt from local [capital gains] taxes resulting strictly from currency changes versus the Brazil Real.  Think:  local cap gains taxes on your investments resulting solely from the long-term devaluation of the Brazil Real.

1. Expats with investments pre-residency were formerly exempt from ALL (currency and otherwise) local capital gains taxes resulting from the eventual sale of those investments after becoming a tax resident.

This means that, worst case, you could potentially be dealt a double tax shot:  Brazil capital gains taxes on both the currency (USD in this case), as well as underlying real estate, appreciation between the acquisition and sale dates.

So you would definitely want to explore the feasilibilty of selling pre-residency; and/or of deferring residency itself.

The Brazil tax rate on capital gains is currently 15%, but if you are going to be subject to any US cap gains taxes on the sale, you would receive a tax credit on the Brazil tax return. 

Again, please seek qualified local tax advice.  When hunting, be sure and refer to the law cited above (14.754/2023) and if the tax professional is not immediately familiar with it or its ramifications, steer clear:  in the narrow and obscure world of expat tax accounting, this was a landmark change, the most significant in over two decades.