Eduardo Maneira comments on the recent Supreme Court decision on ITBI in VALOR ECONÔMICO

Report published in Valor Econômico deals with the STF's recent understanding regarding the incidence of ITBI. Last week, the Federal Supreme Court annulled a previous decision, by the STF itself, which established that the Real Estate Transfer Tax would only occur after registration at a notary's office. As a result, the incidence rules come into effect once the property purchase and sale agreement is signed. Dr. Eduardo Maneira, partner at Maneira Advogados, was interviewed to comment on the matter.

Justice must maintain ITBI decisions favorable to taxpayers

Until the topic is re-examined, the previous case law remains valid

By Joice Bacelo — From Rio

02/09/2022

The move by the Federal Supreme Court (STF) to cancel the decision that established the registration of the property with a notary as a rule for paying ITBI does not represent an immediate defeat for taxpayers. Until the ministers re-examine the issue and establish a new position, the previous jurisprudence, which was already favorable, will continue to apply.

There is a consolidated understanding in the Superior Court of Justice (STJ), since the 1990s, that ITBI is levied when the asset is registered at a notary's office and not at an earlier time, such as the signing of the purchase and sale commitment term - provided for in most municipal laws.

In the STF there are class decisions along the same lines. Therefore, according to lawyers, it is unlikely that the cancellation of the thesis will have an impact on ongoing actions. They say that judges and judges do not need to review their decisions and are committed to maintaining jurisprudence.

If later on, when re-examining the issue, the STF decides differently, then those property buyers authorized not to pay the tax will have their decisions reversed and will be forced to pay the amounts within a period of up to 30 days.

“If there is no type of modulation, taxpayers will have to pay with interest, even if they have trusted in a plenary decision with general repercussions”, says Eduardo Maneira, partner at Maneira Advogados, adding that “depending on municipal legislation, a late payment fine may also be required”.

The thesis canceled by the STF had been established in February 2021. The ministers analyzed the topic through a process involving the municipality of São Paulo (ARE 1294969). But because it was judged with general repercussion, with binding effect on the entire Judiciary, it affected all municipalities in the country.

Many city halls, however, maintained their legislation and continued charging ITBI before registration – among them, São Paulo. The charge varies from 2% to 3% of the value of the property.

The argument for continuing with the charge at a different time to that established was that the case was not yet closed. There was an appeal (motion for clarification) pending judgment.

Property buyers then continued to go to court and use, from February 2021, the STF's binding decision in their favor. They obtained preventive decisions, authorizing payment only upon property registration, and also managed to annul fines imposed by city halls for late tax collection – which can reach 60% of the amount to be collected, plus interest and correction.

The ministers backed down – a year and a half after establishing the thesis – due to a procedural “confusion”. They realized that the case under discussion did not deal exactly with the matter they had deliberated on.

When they analyzed it, they understood that the process discussed the collection of ITBI on the commitment to purchase and sell property. But, in fact, the case involves the assignment of rights relating to the purchase and sale commitment.

The Court had initially decided to “reaffirm jurisprudence”, based on monocratic and class decisions that established the payment of ITBI at the moment when there is an effective transfer of ownership – when the property is registered with a notary.

When judging the appeal from the municipality of São Paulo, on Friday, however, they realized that they had made a mistake. Hence the decision to re-examine the topic and establish a new thesis.

Although it is now clear that the case involves assignment of rights, the ministers can expand the judgment and also address purchase and sale situations – which are the bulk of real estate transactions.

“The plenary never judged this issue from the perspective of the Constitution. It judged before 1988 and in the opposite direction to that of the STJ”, says Ricardo Almeida, legal advisor to the Brazilian Association of Capital Finance Secretariats (Abrasf).

He argues that the incidence of ITBI must occur when proving the taxpayer's ability to pay. "When you do the deed and pay. Taking it to registration is a formality", he emphasizes.

Regarding the transfer of rights, says Almeida, it is expressly provided for in the Constitution as a hypothesis for the incidence of ITBI. “Here it doesn’t even make sense for the triggering event to occur only in registration because it doesn’t even require registration.”

Among lawyers who act for property owners, however, opinions are divided. Some understand that the ministers signaled – with the cancellation of the thesis – that they will be able to validate municipal laws, establishing the charge even without registration. For others, without registration there would be no ITBI charge.

For Kelly Durazzo, from Durazzo & Medeiros Advogados, you cannot charge at the start, at the time of assignment. "The time to register with the property registry is the right time. Two ITBIs would have to be charged because there were two transmissions", he says.

It is unanimous among experts, however, that those taxpayers who already have final decisions (final) both in relation to purchase and sale operations and assignments of rights will not be affected by a future decision from the STF. “The only risk would be for the municipality to file a rescission action”, says Bruno Sigaud, from Sigaud Advogados.

https://valor.globo.com/legislacao/noticia/2022/09/02/justica-deve-manter-decisoes-de-itbi-favoraveis-a-contribuintes.ghtml