The São Paulo City Council approved in a second round this Wednesday, 29th, the bill that provides for the readjustment of the Urban Property and Land Tax (IPTU). The text now goes to Mayor Ricardo Nunes (MDB) for sanction.
The measure corrects the tax by a maximum of 10% per year for any property – whether housing or commerce. Councilors reduced the correction limit for non-residential properties to 15%.
The readjustment proposal, authored by City Hall, was approved with 30 votes in favor and 19 against (see the list of votes below). The Municipal Finance Department states that the review of the value plan is a “legal requirement”. He also pointed out that three public hearings were held to discuss the project with the population. Residents’ associations from several neighborhoods criticize the measure.
FREE LIST
10 small caps to invest in
The list of stocks from promising sectors on the Stock Exchange
Understand the adjustment
The measure maintains the annual tax adjustment limit at 10% for housing. In the case of non-residential properties, the Executive initially proposed maintaining the annual ceiling at 15% (as it currently is), but a collective amendment by councilors from the government base reduced the percentage to 12%. A new amendment, presented this Wednesday, 29th, by the government leader, defined the lock at 10% for both homes and businesses.
The bill also expands the tax exemption range, no longer charging tax on homes valued at up to R$260,000 – currently, the limit is R$230,000. Houses worth up to R$390,000 will have a tax discount – today, the reduction applies to properties worth up to R$345,000.
The City Hall highlighted that more than 1 million properties will be exempt from IPTU and more than 500 thousand will have discounts. “In addition, the lock provided for in the PL limits the annual adjustment to 10% for residential properties with appreciation above this value in the PGV”, he declared, in a note.
Continues after advertising
With this Wednesday’s new amendment, all homes in Special Social Interest Zones (Zeis) – blocks with housing for low-income families – are now exempt. The City Hall’s initial text did not charge the tax only to Zeis 1, 2 and 4. With the change, the number of exempt properties in Zeis increased from 285 thousand to 313 thousand.
Another change in the amendment makes all land and housing owned by the Popular Housing Company of the Municipality of São Paulo (Cohab-SP) and the Housing and Urban Development Company of the State of São Paulo (CDHU) exempt.
IPTU is calculated based on the Generic Value Plan (PGV), which determines the market value of properties. Updated every four years by City Hall, the PGV defines the average cost per square meter of each block in the city, considering the price in real estate agencies and property sales websites.
This year’s bill updates the PGV. As shown by the Estadãothe average price per square meter rose up to 90% in some sectors of the city compared to 2022, last update. The City Hall, however, says that only 4% of properties will have their market value adjusted for next year by more than 40%, compared to this year.
The undersecretary of Municipal Revenue, Thiago Rubio Salvioni, stated, in a public hearing, that the market value attributed by the City Hall is currently around 50% of the market price. “Our intention with PGV is to rebalance this value between the PGV calculation base and market values. But our goal is not to reach 100%. We pursue a level of 70% market value”, he declared.
The new PGV for each city block was published in the annex to the City Hall bill. There are more than 2,700 PDF pages, with address codes.
Continues after advertising
The office of councilor Celso Giannazi (Psol) carried out a survey based on this data, calculating the average value of the territorial square meter by fiscal sector in São Paulo – the capital has 310 sectors, which are smaller divisions than the districts created for tax purposes. The technical advisors then compared the PGV proposal for 2026 with the previous one, for 2022, arriving at the average variation in the period by sector. The 2022 value was adjusted for inflation.
An amendment by councilor Celso Giannazi approved this Wednesday makes it mandatory, from 2028, for the City Hall, when sending the adjustment proposal to the Chamber, to also make available a website with a calculator where the population can check what the IPTU adjustment will be for their property, before the bill is approved.
Residents of SP complain about the rise in IPTU
Residents of several neighborhoods have criticized the readjustment. They complain that the tax increase is not accompanied by improvements in the services provided by City Hall. Among the main complaints are potholes in the streets, lack of care and security.
Continues after advertising
For Associação Viva Leopoldina, the correction of up to 10% per year is unfair.
The Jaraguá-Pirituba sector, in the northwest zone, was the one that recorded the biggest variation in the price per square meter (91%).
In Jardins, in the west zone, where the increase in square meters reaches 70%, the IPTU is also annoying.
Continues after advertising
Another sector that had one of the biggest increases was Pinheiros (average of 69% of the territorial square meter). The Pró-Pinheiros association points out that the data “indicates a profound distance between the City Hall and the reality experienced by the neighborhood’s residents and traders”.
The president of the Association of Residents and Friends of Barra Funda, Edivaldo Godoy, states that the neighborhood’s population was also outraged by the tax (an average increase of 57% of the square meter).
Which councilors voted in favor?
- Ana Carolina Oliveira (Podemos)
- André Santos (Republicans)
- Carlos Bezerra Jr. (PSD)
- Danilo from the health center (We can)
- Dr. Milton Ferreira (Podemos)
- Edir Sales (PSD)
- Ely Teruel (MDB)
- Fábio Riva (MDB)
- Gabriel Abreu ( Podemos )
- George Hato (MDB)
- Gilberto Nascimento Jr. (PL)
- Isac Felix (PL)
- João Jorge (MDB)
- Kenji Ito (Podemos)
- Major Palumbo ( Podemos )
- Marcelo Messias (MDB)
- Pastor Sandra Alves (União)
- Paulo Frange (MDB)
- Ricardo Teixeira (União)
- Roberto Tripoli (PV)
- Rute Costa (PL)
- Sandra Santana (MDB)
- Sansão Pereira (Republicans)
- Sergeant Nantes (We can)
- Silvão Leite (União)
- Silvinho Leite (União)
- Simone Ganem (We Can)
- Sonaira Fernandes (PL)
- Thammy Miranda (União)
- Zoe Martinez (PL)
Which councilors voted against?
- Alessandro Guedes (PT)
- Amanda Vettorazzo (Union)
- Celso Giannazi (Psol)
- Cris Monteiro (New)
- Eliseu Gabriel (PSB)
- Hélio Rodrigues
- Jair Tatto (PT)
- Janaina Paschoal (We can)
- João Ananias (PT)
- Keit Lima (Psol)
- Luana Alves (Psol)
- Lucas Pavanato (PL)
- Marina Bragante (Network)
- Nabil Bonduki (PT)
- Prof. Toninho Vespoli (Psol)
- Renata Falzoni (PSB)
- Senival Moura (PT)
- Silvia from the Feminist Bench (Psol)
