Brazilian Rental Income Tax (Individual)

Income tax on rental income (individual landlord)

If you are a Brazilian individual (PF) collecting rent from another individual, the income has to be declared every month through Carnê-Leão and then squared up in the annual return (DIRPF). Things change when the tenant is a company (PJ): the firm withholds the tax at the source (IRRF), and you simply report the rent as already taxed. The progressive 2024 table is the one you already know from salaries. Income up to R$ 2,259.20 is exempt, and above that the brackets climb through 7.5%, 15%, 22.5% and finally 27.5% on the top slice.

A few expenses paid by the landlord shrink the taxable base. The main ones are IPTU (property tax), the brokerage fee (counted in proportion to the month it was paid), and condo fees in the cases where the landlord covers them instead of the tenant. So the math is taxable rent = gross rent − deductions, and the progressive rate is then applied to what is left.

Brazilian context

You cannot rent out real estate under MEI (micro-entrepreneur) status. It has to be PF (individual) or a regular PJ corporate setup. Property investors tend to compare the two routes: holding everything as PF (carnê-leão + DIRPF) versus opening a PJ (Lucro Presumido at roughly 11.33% on rent, plus the distribution on top). If you own just one or two properties, PF usually comes out ahead, thanks to the exempt bracket and the smaller compliance burden.

FAQ

What is Carnê-Leão? It is a monthly self-declaration system on the Receita Federal portal. The PF landlord works out the tax there and pays it by the last business day of the following month.

Is the security deposit taxable? No. Deposits and caução don't count as income. Only the rent the tenant actually pays does.

Can I deduct repairs and renovations? No. The deductible list stops at IPTU, brokerage and condo fees the landlord pays. Maintenance and improvements don't lower your rental income for tax purposes.