I'm a Buyer: What Taxes and Fees Do I Pay When Buying a Property?

If the previous post was for sellers, this one is for the other side of the table — and here the conversation changes tone: the buyer pays more than the seller, and most of that cost comes even before getting the keys. Those who arrive at the first conversation thinking that “the advertised price is the final value” usually get a shock, so let's put everything that goes into your account on the table, in the order it appears.

The biggest cost is the ITBI (Imposto sobre a Transmissão de Bens Imóveis), the municipal property transfer tax. In São Paulo, the standard rate is 3% of the property value, and the tax base is the higher of the amount you declared for the purchase and the Municipality's reference cadastral value (valor venal de referência). It is paid by the buyer, and without proof of ITBI payment, the notary office simply will not register the transfer in your name — the payment slip is generated from the Declaração de Transações Imobiliárias (Declaration of Real Estate Transactions) on the Municipality's website and must be settled before the deed can be registered.

Here's a detail almost no one tells you: if you finance through the Sistema Financeiro da Habitação (SFH - Brazilian Housing Finance System), the tax on the financed portion drops to 0.5%. This applies to contracts signed from February 2022 onwards: for the amount financed up to the SFH ceiling (around R$ 121,000 today), the rate is half a percent; the remainder, whether financed or not, remains at 3%. For a high-end apartment in Alto de Pinheiros, which well exceeds the ceiling, the discount is real but partial — it only applies to the first portion of the financing, not the entire amount.

After the tax come the notary offices, and here's some good news: deed (escritura) and registration (registro) are not percentages of the property value; they are fixed values per bracket, according to the table of the Tribunal de Justiça de São Paulo (São Paulo State Court of Justice). For a R$ 3 million apartment, the deed and registration together typically fall in the R$ 10,000 to R$ 15,000 range — less than people imagine, more people appreciate. The deed is prepared at the Tabelionato de Notas (Public Notary Office) and the registration at the Cartório de Registro de Imóveis (Real Estate Registry Office), and it is this registration that effectively transfers ownership to your name.

Summing up tax, notary fees, and certificates, the rule of thumb I use with my clients is to budget something between 3% and 5% of the property value just for documentation. For a R$ 3 million property, for example, the ITBI alone is R$ 90,000; deed, registration, and certificates add another R$ 12,000 to R$ 15,000. Around R$ 105,000 that needs to exist in addition to the down payment — and that's why I always ask to put this line on the spreadsheet before making an offer, not after.

If the purchase involves bank financing, the list grows: property appraisal fee, credit analysis fee, and mandatory insurance policies (MIP, which insures you, and DFI, which insures the property), which are embedded in the monthly installment. These are smaller amounts than the ITBI but change the effective cost of credit — that's why I always ask for the bank's complete simulation, with everything itemized, before comparing offers. Two proposals with the same interest rate can have very different costs when insurance and fees are factored in.

A warning I often repeat: declare the value you actually paid in the deed. Since the judgment of Tema 1.113 by the STJ (Superior Court of Justice), the ITBI's tax base is the property's market value, and the declared value is only valid as long as it falls within that range — the Municipality can review it through an administrative process if it believes it was undervalued. Stating a lower value in the deed doesn't genuinely “save tax”; it creates the risk of assessment and, worse: your recorded acquisition cost becomes lower, and you pay tax on a higher profit than the real one when you sell it someday. It's the same mistake I discouraged in the seller's post, now from the buyer's perspective.

Beyond the paperwork, the property itself continues to incur costs in the month you move in: IPTU (property tax) and condominium fees become proportional to you from the transfer date, along with electricity, water, and gas in your name. In high-end buildings, where the monthly condominium fee can be as significant as rent, it's worth checking the exact changeover date with the building administrator to avoid paying anything twice.

A practical example, with round numbers, to tie everything together: an R$ 800,000 apartment, paid in cash. The ITBI is R$ 24,000; deed and registration, together, around R$ 7,000; certificates and fees, a few more hundreds. Total documented cost: around R$ 31,000, approximately 4% of the property value. Now the same apartment with R$ 400,000 financed by SFH: the tax drops to just over R$ 21,000 (0.5% on the financed portion up to the ceiling, 3% on the rest), and everything else remains the same — a saving of about R$ 3,000 that the bank rarely mentions in the simulation.

One caveat: here I am talking about purchases by individuals, with a public deed (escritura pública), in São Paulo city. Purchases by companies, auction acquisitions, informal contracts (contrato de gaveta), and off-plan properties (imóvel na planta) have their own rules — in the case of off-plan, for example, the notary costs already appear in the incorporation contract, and the ITBI is due at the time of the definitive deed, years later. If that's your case, the calculation changes.

It is precisely why I put together this spreadsheet with the buyer before the offer: knowing the total outbound cost — price, ITBI, notary fees, other fees, and the first month of bills — is what separates a smooth purchase from a financially tight one. If you are looking for a property in Alto de Pinheiros or the region, call me — we'll run these numbers in our first conversation, with no obligation.