When you think about purchasing a rural property, you need to understand that although there is no IPTU charge, you will need to pay ITR , which is the Rural Property Tax. Both the taxable event and the calculation of ITR differ from IPTU. The information in this article will help you understand what ITR is, how it works, and how it is calculated.
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What is ITR?
ITR is the acronym for Tax on Rural Property. It is a tax under the jurisdiction of the Federal Union, as provided for in article 153, VI, of the 1988 Federal Constitution.
Established by Law No. 9,393/96, it applies to ownership, possession by any title, or useful control of rural property. It is worth mentioning that payment is made by both individuals and legal entities.
Therefore, it is possible to note that the taxable event is rural property , which is its main difference from IPTU (Urban Property Tax), whose taxable event is urban property.
It is important to highlight that the Federal Constitution also provides for the non-incidence of the tax on small rural plots, this regulation being made by Law No. 9,393/96.
What is the ITR rate?
The ITR rate is progressive , and for this two factors are considered:
- total area;
- degree of use.
In this sense, smaller properties have lower tax rates when compared to larger rural properties. They also vary based on the use of the property, avoiding the maintenance of unproductive properties.
Thus, the variation is between 0.03% and 20% according to the table provided for by law. Therefore, properties of up to 50 hectares have rates varying between 0.03% and 1%.
As everything depends on the use, this variation ranges from “up to 30%” to “above 80%”. Properties with an area greater than 5 thousand hectares have a minimum rate of 0.45% and a maximum of 20% depending on the use.
How do I find out the property tax rate?
To find out the tax rate applicable to your property, you need to look at its total size and the degree of use. This is obtained by checking the area used for cultivation.
It is worth mentioning that the ITR calculation is based on the value of the taxable bare land. Therefore, as seen, not all areas of the property will be taxed.
The first step is to find the Bare Land Value (VTN). This is a value given after excluding improvements, crops, cultivated pastures and planted forests from the total value of the property.
The second step is to find the taxable value. To do this, you need to subtract the following from the total area:
- legal and permanent reserve;
- area of ecological interest;
- environmental easement area;
- site covered by regenerating native forest;
- flooded for electrical energy reservoir.
When the taxable area is determined, the value is multiplied by the Bare Land Value (VTN) , arriving at the calculation base on which the tax rate will be applied.
How often is ITR collected?
Every year the taxpayer must file the ITR Declaration (DITR) , which consists of the following documents:
- DIAC (Information and Cadastral Update Document for Rural Property Tax);
- DIAT (ITR Information and Assessment Document).
The DIAC is the document that will contain the property’s registration data , while the DIAT will contain the information necessary to calculate the tax.
The ITR Declaration must be submitted every year by the end of September, and the tax generated is collected in 4 installments.
The first is paid by the last business day of the DITR delivery deadline and the others in subsequent months, adjusted by Selic.
Important information about the ITR
It is important to note that Law No. 9,393/96 provides for some tax exemption scenarios. One of them is the establishment of the official agrarian reform program.
Another exemption concerns areas occupied by remnants of quilombo communities, taking into account the conditions set out in the Law.
50% of the amount collected goes to the Municipality in which the property is located and the remainder to the Federal Union, unless the Municipality inspects and collects the ITR through an agreement with the Union.
In the latter case, 100% of the revenue will remain with the Municipality. It is worth mentioning that this is a tax under the jurisdiction of the Union, but if the municipalities wish, they can take over the inspection and collection. To do so, it is necessary to seal the agreement.
There are many questions and criticisms about the inspections carried out by municipalities, especially regarding the value of bare land. However, even though these criticisms exist, this has not changed the way the tax is generated.
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