New Tax Rules for Independent Professionals and Property Owners in 2027

Starting January 1, 2027, independent professionals and property owners in Brazil will face updated tax requirements as part of the ongoing national tax reform. These changes, established by federal regulations, aim to modernize the fiscal framework and clarify the obligations for individuals engaged in economic activities, including the provision of services and real estate leasing.

For self-employed individuals, the reform introduces a requirement for those who qualify as taxpayers of the Contribution on Goods and Services (CBS) to register for a Corporate Taxpayer ID (CNPJ). While this may sound like a significant hurdle, the government is developing a simplified registration process modeled after the existing Micro-entrepreneur (MEI) system. Individuals who do not hold MEI status and earn an annual revenue of up to R$ 40,500—averaging R$ 3,375 per month—are exempt from the new CBS and the Tax on Goods and Services (IBS) levies.

It is important to note that these changes do not target personal financial transactions. Government officials have clarified that receiving funds via Pix does not automatically trigger taxation. Transfers such as loans, donations, or movements between accounts held by the same individual are not considered commercial revenue. The focus remains strictly on income derived from the sale of goods or the provision of professional services.

The landscape for property owners is also shifting. Under the new rules, rental income will be subject to the CBS and IBS, though these taxes will not be applied immediately. The CBS is scheduled to take effect in 2027, followed by the IBS in 2029. For individual landlords, these taxes will only apply if they meet specific criteria: earning more than R$ 240,000 annually from rentals or managing three or more distinct properties. If these thresholds are not met, the landlord remains subject only to the standard Income Tax (IRPF).

To mitigate potential impacts on the rental market, the reform includes mechanisms such as a 70% reduction in the tax base for IBS and CBS, along with a social reduction of R$ 600 per month for residential units. Furthermore, a transitional regime has been established for contracts signed before January 16, 2025, allowing for a fixed 3.65% tax rate on gross revenue for a limited period. Experts advise that while this transition offers a temporary buffer, it may not be the most cost-effective solution for all property owners, as it precludes the use of tax credits.

As the annual tax season approaches, taxpayers are encouraged to prepare by organizing all relevant documentation, including income statements, receipts for deductible expenses, and proof of assets. Utilizing the pre-filled tax declaration provided by the tax authority can significantly reduce errors and expedite the process. However, taxpayers remain responsible for verifying the accuracy of all information. Those with complex financial situations, such as international income or significant capital gains, are advised to consult with a qualified accountant to ensure compliance and avoid potential penalties.