ITCMD in São Paulo: what is the rate, who is exempt and how to calculate the inheritance and gift tax?

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When someone receives an inheritance or a gift, a common question is how much tax they will pay. ITCMD may be a significant expense in addition to court costs and professional fees, but its weight depends on the taxable base and exemptions. Identifying the taxpayer, the state with jurisdiction and the deadlines helps estimate costs and reduce the risk of incorrect payment.

The national framework is changing, so it is important to distinguish current law from proposals. A possible amendment is not a reason to accelerate gifts without assessing their effects. This guide explains the current São Paulo rate, progressive taxation, exemptions, valuation and payment.

What is the ITCMD and who pays it?

ITCMD is Brazil’s inheritance and gift tax, within state and Federal District jurisdiction (Constitution article 155(I)). In São Paulo, heirs, legatees or donees are normally taxpayers. There is an exception: where the donee neither resides nor is domiciled in the state, the sole paragraph of article 7 may make the donor liable. Sefaz-SP Ruling 33,325M1/2026 considers this situation for a monetary gift.

The base must follow market valuation and the applicable legal rules, not a free choice among IPTU, ITBI and declared values. The surviving spouse’s existing marital-property share is not inherited. For financial products, STF Theme 1,214 rules out ITCMD on amounts paid to beneficiaries from VGBL and PGBL plans following the holder’s death. This does not make every lifetime withdrawal or gift tax-free; life insurance has its own legal treatment.

What is the ITCMD rate in São Paulo in 2026?

São Paulo applies the 4% rate in article 16 of State Law 10,705/2000 to inheritances and gifts, subject to legal exemptions and non-taxable situations. Ruling 33,325M1/2026 reaffirms that rate. For an actual transaction, check the law applicable on the taxable-event date and the relevant tax jurisdiction.

For an initial estimate, use the probate tax and costs calculator; the result does not replace assessment of exemptions, valuation and the actual procedure.

Constitutional Amendment 132/2023 requires progressive taxation, and Supplementary Law 227/2026 sets general rules. The national ceiling set by the Senate is 8%, but this does not make the São Paulo rate 8%. Among proposals submitted to the Legislative Assembly, Bill 7/2024 proposes 2%–8% brackets, and Bill 409/2025 proposes 1%–4%. A bill or committee opinion is not the current tax law.

A tax increase requires legislation and the annual and 90-day waiting periods: if published in 2026, it could not be charged before 2027 or before 90 days had elapsed, as applicable. This does not automatically apply a future rate to an earlier death or predict the final legislation. Planning must consider the actual taxable event, current costs and family circumstances.

Who is exempt from ITCMD in São Paulo?

Law 10,705/2000 provides several exemptions. Categories worth checking include:

• Low-value gift: a gift is exempt where, totaled in the calendar year between the same donor and the same donee, it does not exceed 2,500 UFESPs (art. 6, II, “a”). Because the UFESP is updated annually, the amount in reais changes each year — for this reason, the current UFESP must be checked.

• Residential inheritance: urban or rural property worth up to 5,000 UFESPs where the benefited family members reside and own no other property (article 6(I)(a)). Check both the property value and each beneficiary’s conditions.

• Only real property transferred: worth up to 2,500 UFESPs, provided it is the only real property involved in the transfer (article 6(I)(b)); the existence of movable assets does not necessarily exclude this category.

• Deposits and investments: the total must not exceed 1,000 UFESPs under article 6(I)(d). This is not an allowance multiplied by the number of heirs.

Genuine gifts in separate years may qualify for the annual threshold, but all transfers between the same donor and donee during the year must be aggregated. If the threshold is exceeded, tax is calculated on the aggregate, crediting amounts already paid, not just on the excess. CAT Normative Decision 4/2016 treats a gift of the couple’s common property as a single act, without automatically doubling the allowance. The forced share, the donor’s subsistence and the reality of the transactions must be respected.

How is the ITCMD calculated and how is it paid?

Apply 4% to the taxable value actually transferred, separating the marital-property share and checking exemptions and permissible adjustments. Property, vehicles, investments and company interests require their appropriate valuation rules; an IPTU assessment or book value is not automatically the sole answer. Supplementary Law 227/2026 provides for deceased persons’ proven pre-death debts to be deducted under the state framework, and sets specific rules for financed assets and company interests (articles 152–154). Unlisted interests require the applicable technical method and a floor based on market-adjusted net assets plus business goodwill; mere book value should not be assumed sufficient.

File the return through Sefaz-SP, generate the DARE payment document and comply with tax deadlines. Prepayment is not required indiscriminately before every division: under STJ Theme 1,074, arrolamento sumário does not require prior ITCMD settlement, while taxes relating to estate assets and income must still be paid. CNJ Resolution 695/2026 removed prior proof of payment as a condition for a notarial deed, retaining acknowledgment of tax duties and, where tax has not been paid, notarial notice to the tax authority within five days or the period set by tax legislation. The tax and state obligations remain: check Sefaz-SP’s guidance and, where appropriate, administrative assessment through SIPET.

Payment in up to 12 monthly installments may be available, with a minimum of 30 UFESPs per installment, charges and other conditions. An application and assessment of the debt’s status are required; it is not simply the principal divided by 12. Liquidity should be evaluated before payment commitments are made.

The penalty for late probate initiation is separate from charges for late tax payment. Under São Paulo law, applying after 60 days from death triggers a 10% penalty on the tax; a delay beyond 180 days increases it to 20% (article 21(I)). The CPC’s civil two-month deadline is not identical to the fiscal 60-day period. Article 17 also governs inheritance-tax payment, including a 180-day limit from death, subject to a justified judicial extension. Starting probate does not automatically suspend every tax deadline.

Practical example: the Andrade family's R$ 800,000 in assets

Hypothetical example: Mr. Andrade dies leaving a R$ 600,000 apartment and R$ 200,000 in investments. Assume all R$ 800,000 are common marital assets under partial community of property, with no separate assets, debts, will or other complicating factors. His widow keeps her R$ 400,000 marital-property share. The R$ 400,000 inheritance passes to their two children, R$ 200,000 each: in this scenario the widow does not inherit alongside them (Civil Code article 1,829(I)).

Without exemptions or other adjustments, ITCMD would be R$ 400,000 × 4% = R$ 16,000, or R$ 8,000 per child. Initiating probate after 180 days could add a 20% penalty, R$ 3,200, plus any applicable late-payment charges. This is an illustrative calculation; a rate applicable to a death does not automatically change because another law is enacted later.

The most common (and costly) mistakes

• Believing that SP is already progressive. It is not: the rate today is a fixed 4%. Deciding on the basis of rates not yet in force leads to wrong calculations.

• Confusing deadlines. Applying after 60 days may trigger a 10% penalty, rising to 20% after 180 days, in addition to separate charges for late payment.

• Taxing the survivor’s own property as an inheritance. The marital-property share depends on the regime and assets and is not necessarily half of everything. A gratuitous allocation above that share may have its own tax treatment.

• Ignoring the exemptions. Gifts within the annual UFESP limit and certain residential inheritances may be exempt — it is worth checking before paying.

• Planning only out of fear of a future rate. Gifts and holding structures can generate costs and loss of control and must be compared with alternatives and family needs.

Checklist: before dealing with the ITCMD

• Identify assets, rights, documented debts, beneficiaries and dates, applying the appropriate legal valuation rule to each item.

• Separate the spouse's marital share from the portion that will in fact be transmitted.

• Check the applicable exemptions and the UFESP in force for the year.

• File with SEFAZ-SP and generate the payment slip (DARE); consider installments if there is a lack of liquidity.

• Track initiation, filing, payment and registration deadlines separately, checking any extension orders.

• Assess planning by total cost, the forced share, subsistence and control of assets, without assuming a future rate.

Frequently asked questions about ITCMD in São Paulo

What is the ITCMD and who pays it?

ITCMD is the Brazilian state and Federal District tax on inheritances and gifts. In São Paulo, the taxpayer is normally the heir, legatee or donee, depending on the transaction; where the donee neither resides nor is domiciled in the state, the sole paragraph of article 7 may make the donor liable. Tax jurisdiction, asset type and exemptions must be checked. A surviving partner’s existing marital-property share is not an inheritance transfer.

What is the ITCMD rate in São Paulo in 2026?

Under the São Paulo legislation checked on September 5, 2026, the rate is 4% under article 16 of Law 10,705/2000. Constitutional Amendment 132/2023 and Supplementary Law 227/2026 require progressive rates but do not automatically replace the state rate. The national ceiling is 8%; Bills 7/2024 and 409/2025 contain different proposals, not current rates. An increase requires applicable legislation, the annual and 90-day waiting periods, and consideration of the taxable-event date.

Who is exempt from ITCMD in São Paulo?

Law 10,705/2000 includes exemptions for gifts totaling up to 2,500 UFESPs in a calendar year between the same donor and donee; inherited residential property worth up to 5,000 UFESPs where the benefited family members live and own no other property; property worth up to 2,500 UFESPs if it is the only real property transferred; and bank deposits and investments totaling no more than 1,000 UFESPs. Each category has its own conditions. Check the relevant UFESP value and do not automatically multiply limits by heirs or donor spouses.

Can the ITCMD be paid in installments?

Payment in up to 12 monthly installments may be approved, with a minimum of 30 UFESPs per installment, charges and the other legal conditions. An application and assessment through the appropriate channel are required, including consideration of the debt’s status. It is not simply the principal divided by 12. Check Sefaz-SP’s current procedure; formally registered public debts may require the State Attorney General’s channel. Installments do not exempt the tax.

How do I pay the ITCMD of a probate in São Paulo?

File the return through Sefaz-SP, issue the DARE payment document and observe tax deadlines. Prepayment is not a universal condition for every estate division: STJ Theme 1,074 dispenses with prior ITCMD payment in arrolamento sumário, while taxes relating to estate assets and income must still be settled. CNJ Resolution 695/2026 removed prior proof of payment as a condition for the notarial deed, retaining acknowledgment of tax duties and, where tax has not been paid, notarial notice to the tax authority within five days or the period set by tax legislation. The tax, state obligations and charges remain; check Sefaz-SP’s operational guidance.

Is it worth planning the succession now because of the ITCMD?

Estate planning can be useful, but a gift should not be accelerated solely out of fear of a future increase. Compare current costs, the donor’s subsistence, the forced share, control of assets, family circumstances and applicable tax rules. Usufruct or a holding company does not automatically provide savings or protection. Legislative proposals do not guarantee the future rate or make an early transfer appropriate for everyone.

Understanding the ITCMD today means deciding better tomorrow

Understanding ITCMD means separating current São Paulo rules, national general legislation and proposals without force of law. This helps compare transfer options and costs, without treating a possible increase as certain or promising savings from any planning tool.

At Falchet e Marques Sociedade de Advogados, a firm in São Paulo (Av. Paulista), we work in probate, ITCMD and estate planning, combining Succession Law with tax analysis alongside the accountant. If you are going to receive an inheritance, make a gift or organize your succession, it is worth understanding the impact of the ITCMD on your case.

Talk to our team on WhatsApp: +55 11 95901-1854 — and calculate the ITCMD for your situation before making any decision.