Declaring real estate in the Income Tax return often raises many questions, especially when it involves rental income, sales, renovations, or financing. To help simplify the process, QuintoAndar — Latin America’s largest housing platform — has gathered practical guidance from an expert, based on the most frequent questions received from clients.

“It’s common for people to omit or misreport property-related information due to lack of clear guidance — especially when it comes to real estate, which involves particular rules — and that can lead to audits or other issues with the tax authority. That’s why it’s important to seek information ahead of time and, if possible, consult with an accountant,” explains Andreia Vellido, Tax Manager at QuintoAndar.

Below are answers to the most common questions about declaring real estate, organized by profile to help ensure your tax return is completed correctly:

TENANTS

How do I report rent payments?
Tenants must report monthly rent payments to the landlord in the “Payments Made” section, using code “70 – Property Rentals.” Be sure to include the CPF or CNPJ of the landlord and the total amount paid during the year. If you’re a QuintoAndar user, a rental payment statement is available on the platform. If not, request the document from your rental agency.

Should I declare expenses like property tax (IPTU) or condo fees?
No. These expenses are not deductible and should not be included in the tax return. Only the rent payment must be declared.

I made improvements to a rented property. Should I declare them?
No. Renovations or upgrades paid for by the tenant should not be declared. If these improvements are structural and agreed upon with the owner, they must be declared by the property owner.

Can I deduct rent from my income tax?
No. Rent is not deductible for individuals, even if it’s your primary residence. However, it’s mandatory to report the expense, and failure to do so can result in a 20% fine on undeclared rent.

I split rent with someone else. How do we report it?
Each tenant must report the amount they personally paid. The IRS may cross-check this with the landlord’s CPF, so the combined amounts must match the lease agreement.

I bought a property last year and invested in documents and renovations before securing financing. How do I declare that?
Costs for documentation and renovations should be reported in the “Assets and Rights” section — but only if the property is already in your name. Financing details must be included the following year, but not under “Debts and Liabilities.”

PROPERTY OWNERS

Declaring real estate as an owner can be more complex, according to the expert, who emphasizes the value of professional assistance. “With scenarios like financing, renovations, or rental income, owners often need documents from multiple institutions and must follow specific rules closely,” she explains.

Do I need to declare a property I own?
Yes, if the total value of your property and other assets exceeds R$300,000 or if you earned more than R$30,639.90 in annual rental income. To determine if your property must be declared, consult your income report. For QuintoAndar users, this document is available directly on the platform.

Should I declare property tax or condo fees for a rental property?
These expenses don’t need to be declared separately, but they can reduce the taxable rental income when filling out the “Carnê-Leão” form. Save all receipts. If these expenses are paid by the property manager or passed on to the tenant, only the owner’s net income should be declared.

I have a financed property. How do I declare it?
Financed properties must be reported in the “Assets and Rights” section. Include details like the address, area, acquisition method, down payment, acquisition date, taxes paid, and IPTU number.

• If the property was bought in 2024, the 2023 field should be zeroed out. The “Situation on 12/31/2024” field should show the total amount paid that year, including down payment, installments, interest, and other financing costs (excluding late payment fines).
  
• If acquired in previous years, the 2023 field should reflect past payments accordingly.
  

I made renovations. Can I update the property value?
Yes — as long as you have supporting documents like invoices, receipts, and service contracts. These costs should be added to the property’s acquisition cost in the “Situation on 12/31/2024” field. This helps reduce future capital gains taxes in case of a sale.

I inherited a property. How do I report it?
The asset must be reported using the value from the probate process (usually the market value). Declare it in the “Assets and Rights” section and indicate the source under “Exempt and Non-Taxable Income,” as inherited property.

I sold a property. How do I declare it?
You must complete the IRS “Capital Gains” program to calculate any profit. Then import the data into your annual return. If eligible for exemption (e.g., sale of only property up to R$440,000), this must also be properly indicated.

RENTAL INCOME

I receive rent as a landlord. Do I need to use Carnê-Leão?
Yes, if the monthly income exceeds R$2,112 (2024 exemption limit). You must calculate taxes monthly and pay them using a DARF form by the end of the following month. Report the amounts later in “Taxable Income Received from Individuals.”

Can I deduct expenses on rental properties?
Yes. You can deduct certain expenses — if paid by you and not reimbursed by the tenant — such as: property management fees, IPTU, condo fees, and broker commissions.
Example: If you earned R$3,000 in rent but paid R$300 in management fees and R$500 in condo fees (not passed on to the tenant), you only need to report R$2,200 as taxable income.
Always keep documentation in case of audits.

My property was vacant for part of the year. How do I report that?
Only declare rent you actually received. You don’t need to justify vacancy, but keep documents (like leasing attempts) in case the IRS questions any drop in income.

If you find errors after submitting your return, you can file a correction. The IRS allows amended returns to be submitted without penalty as long as the deadline hasn’t passed. This applies to tenants, landlords, and buyers, and helps avoid future issues.

“Whether you’re a tenant or property owner, staying organized and having your documents ready is key to filing an accurate return,” says Vellido. “Digital tools — such as automatic statements and payment history — can greatly simplify the process, reduce errors, and help avoid red flags from the IRS.”

She concludes: “Keep your documents in order and seek professional advice to avoid trouble when declaring your real estate.”