Brazil Rental Income Guide

Taxation at Progressive IRPF Rates (0% to 27.5%)

• Rental income — ordinary income: The rental income (the "rendimentos de aluguel" — the "rental income") received by the individual landlord is treated as the "ordinary taxable income" (the "rendimentos tributáveis") and is added to the other taxable income (the employment income, the self-employment income, the pension income) on the annual IRPF return.
• Monthly tax brackets for 2026: The rental income is taxed at the progressive IRPF rates: (a) 0% on the monthly income up to R$ 2,xxx, (b) 7.5% on R$ 2,xxx to R$ 3,xxx, (c) 15% on R$ 3,xxx to R$ 4,xxx, (d) 22.5% on R$ 4,xxx to R$ 5,xxx, (e) 27.5% on the monthly income above R$ 5,xxx. The rates apply to the net rental income after the deductions.
• No separate rental tax: Brazil does NOT impose the separate or the flat tax on the rental income. The rental income is simply one category of the income on the standard IRPF return. The landlord does NOT pay the additional tax beyond the standard IRPF.

15% Simplified Expense Deduction (Dedução Padrão)

• Standard deduction — 15% of gross rental income: The individual landlord may elect the "simplified expense deduction" (the "dedução padrão" or the "desconto simplificado") — the deduction of 15% of the gross rental income as the deemed expenses. The 15% deduction is available without the need to substantiate the actual costs.
• Alternative — actual expense deduction: The landlord may elect the "itemised deduction" (the "dedução dos encargos reais" — the "actual expense deduction") instead of the 15% simplified deduction if the total actual expenses exceed the 15% amount. The actual deductible expenses include: (a) the condominium fees (the "taxa de condomínio"), (b) the property tax (the "IPTU" — the "Imposto sobre a Propriedade Predial e Territorial Urbana"), (c) the property insurance (the "seguro imobiliário"), (d) the property management fee (the "taxa de administração"), (e) the repair and maintenance costs (the "despesas de reparo e manutenção"), (f) the depreciation (the "depreciação" at 4% per year for the building).
• Example calculation: For the monthly rent of R$ 10,000 (R$ 120,000 per year): the 15% simplified deduction = R$ 18,000 (R$ 120,000 × 15%). The net taxable rental income = R$ 102,000. At the 27.5% marginal rate, the tax on the rental income = R$ 28,050. Compare with the actual expenses of R$ 15,000 — the 15% simplified deduction (R$ 18,000) is more favourable.

Withholding Tax (IRRF) on Rent Paid by Individuals

• IRRF on the rental payments by individuals: When the tenant is an individual (the "pessoa física"), the tenant is NOT required to withhold the IRRF on the rental payment. The landlord is responsible for the monthly carnê-leão payment. However, when the tenant is a legal entity (the "pessoa jurídica" — the "company"), the tenant must withhold the IRRF at the rate of 15% to 27.5% on the rental payment and remit it to the RFB.
• Rental to the company: If the landlord rents the property to a company, the company withholds the IRRF at the rate corresponding to the landlord's income bracket (the "tabela progressiva" — the progressive table). The company issues the "Informe de Rendimentos" to the landlord for the annual IRPF filing.
• Non-resident landlord — 15% withholding: If the landlord is the non-resident (the "não residente fiscal"), the rental income paid by the Brazilian tenant is subject to the withholding tax at the flat rate of 15% (the "IRRF — 15%") as the final tax. The non-resident landlord does NOT file the annual IRPF return.

Monthly Carnê-Leão for Rental Income

• Monthly payment requirement: The individual landlord who receives the rental income from the individuals (the "pessoa física") MUST pay the monthly carnê-leão on the rental income by the last business day of the following month. The carnê-leão is calculated using the SICALC program or the online calculator on the RFB website.
• Reporting on the annual IRPF: The rental income paid through the carnê-leão is reported on the annual IRPF return under the "Rendimentos Tributáveis Recebidos de Pessoa Física" section. The monthly carnê-leão payments are creditable against the annual tax liability.
• Deductible expenses on the carnê-leão: The same deductible expenses (the 15% simplified deduction or the actual expenses) are applied on the monthly carnê-leão calculation. The taxpayer may also deduct the "despesas de cobrança" (the "collection expenses") and the "taxas de administração" (the "management fees") on the monthly calculation.

FAQs

Is the rental deposit taxable?

No. The security deposit (the "depósito de garantia") is NOT the taxable income — it is the refundable deposit. The deposit must be returned to the tenant at the end of the lease. However, the interest earned on the deposit (the "atualização do depósito") is the taxable investment income for the landlord.

What about the short-term rentals (Airbnb)?

The short-term rental income (the "aluguel por temporada" — the "seasonal rental") is subject to the same IRPF progressive rates as the long-term rental income. The landlord must report the gross rental income and may deduct the 15% simplified deduction or the actual expenses. The short-term rental income is also subject to the monthly carnê-leão if paid by the individuals.

Are the rental losses deductible?

No. The rental loss (the "prejuízo com aluguel") does NOT create the negative income for the tax purposes. The rental deduction (the actual expenses or the simplified deduction) may not exceed the gross rental income. The unused expenses cannot be carried forward to the future years.