Leonardo Martins and João Victor Sadocci

With the publication of Law No. 6,999 on July 14 of this year, the City of Rio de Janeiro instituted tax benefits for the building works framed in the Reviver Centro Program, created to promote the urban, social and economic recovery of part of the central region of the city.

The law grants exemption or suspension of tax credits – enrolled or not in active debt – related to the Property And Urban Land Property Tax (IPTU) and the Household Garbage Collection Fee (TCL), reduction of Property Transfer Tax (ITBI) and exemption from administrative licensing fees for works for buildings and buildings framed in the Reviver Center Program whose purpose is to:

  • conversion of regularly constructed and licensed buildings - Retrofit, for multifamily or mixed residential use;
  • construction of new residential or mixed buildings;
  • financing of social rental, assisted housing and self-management programs;
  • restoration, adaptation, complete recovery and completion of works in properties in poor condition, for multifamily or mixed residential use; or
  • completion of works paralyzed in structure stage, for multifamily or mixed residential use.

The purpose of the Reviver Centro Program is to attract new inhabitants to this area of the city, encouraging the construction of new housing and the transformation of commercial buildings into residential or mixed use. It is believed that the greater movement of residents in the central area of the city will stimulate socioeconomic activities in the region.

Law No. 6,999/21 also establishes that part of the residential units destined to the Social Rental Program will be exempt from IPTU, while they remain linked to the program.

The granting of these tax benefits is conditional on obtaining:

  • license of works within up to 5 years, from 01/08/2021; and
  • certificate of Habitor or Acceptance of Works, within the period of 36 months, from the issuance of the respective license of works.

If the established requirements are not met, taxes will be charged with due legal additions, as if the benefits had never been granted. The benefits stipulated by law will not entitle the refund of amounts already paid to the municipality.

This law arrives at an opportune moment for the Real Estate Market in Rio de Janeiro, which, due to several social and economic factors, returns to growth in the acquisition of residential real estate (77.1% increase in the number of transactions in June 2021, compared to the same period in 2020, according to data from the Secovi Rio - Cepai Information Research and Analysis Center). It is a good opportunity for real estate market entrepreneurs to once again direct their attention to downtown Rio and take advantage of the tax incentives offered.

The central region of the city already has good access infrastructure, public transport and leisure capable of serving a public eager for better living and housing conditions. Making the Center a hub of attraction for residents, and not just a region frequented during business hours, will help requalify it urbanly, have a more sustainable occupation, improve policing and security and reduce violence, benefiting all who live, work or frequent the region.

It is, therefore, an important initiative for the upheavement of the central area of Rio. If well executed, it can generate good social and economic fruits for the city and its residents.