Project revises calculation base, maintains 10% limit on adjustment and expands exemption for properties in social areas
The São Paulo City Council approved on Wednesday (October 29, 2025) the São Paulo City Council’s proposal to review the PGV (Generic Value Plan), an instrument that defines the basis for calculating IPTU (Urban Property and Territorial Tax) in the capital of São Paulo.
According to the city hall, the measure will benefit more than 1.5 million residential properties with total exemption or tax discounts.
The proposal also corrects what would be a distortion that affected low-income families in ZEIS (Special Social Interest Zones). The text extends the IPTU exemption until 2030 for all residential properties located in ZEIS 1, 2, 3, 4 and 5 – around 313 thousand units, of which 100 thousand still pay the tax.
The project maintains the annual tax adjustment limit of up to 10% for residential and commercial properties, a measure that, according to the city hall, seeks to provide predictability and fiscal stability for families and entrepreneurs.
According to the city hall, the objective is “adapt the IPTU calculation base to the reality of the municipal real estate market, reducing registration gaps, correcting territorial distortions and increasing equity between taxpayers”.
The proposal received 30 votes in favor and 19 against. The PL (bill) will go to the mayor (MDB) for approval.
The change was made at a time when there were complaints that many properties in the municipality were being taxed based on outdated values. By approving the text, the Chamber sought to meet the demand for updating the calculation criteria.
Despite the announced benefits, the proposal faced criticism from residents’ associations in different neighborhoods, who defended greater transparency and questioned whether the exemption bands and adjustment limits are sufficient to effectively reduce the burden of IPTU in regions with accelerated appreciation.
Councilors supporting the city council defended the proposal and cited the legal nature of the PGV review. The government leader, (MDB), stated that the update “follows a law approved by the City Council” e “brings balance to IPTU taxation according to several factors”.
Riva also highlighted the amendment that limits the tax adjustment for commercial properties to 10%: “We are equalizing the lock for both commercial and residential, at 10%, because we understand that commerce also generates jobs, income and contributes to the city”.
The 1st vice-president of the House, (MDB), reinforced that sending the project is a constitutional requirement: “Mayor Ricardo Nunes complied with the legal provision that, every four years, in the first year of his term, he must send a project to review the Generic Values Plan to the Chamber”.
The opposition voted against. The PT bench argued that the update could increase the tax burden on the outskirts. “We are against tax increases for the periphery, as in the case of IPTU, and against the absence of progressive mechanisms that guarantee social justice”declared the PT leader, .
Psol also rejected the proposal and stated that the review tends to penalize the poorest areas. The party leader, , defended “a very substantial increase for the rich and super rich, and freeing the periphery and the middle class a little.”
With approval in the Legislature, the sanction now remains for the new rule to come into effect. The city hall informed that it will make the registration adjustments and inform taxpayers of the new ranges and limits before charging for the following year.
