Gifting Real Estate in Brazil to Your Children While Living in Portugal

A Brazilian couple moves to Portugal and keeps an apartment in São Paulo. With the children now adults, the idea arises of transferring the property to them during the parents' lifetime, but without losing the right to use it or to receive the rent. The most widely known solution is a gift with reserved usufruct. For those living in Portugal, it raises specific questions: do you need to travel to Brazil to sign? Which State collects ITCMD (Brazilian state tax on inheritances and gifts) when the donor lives abroad? Does the gift count as an advance on the inheritance? And does Portugal charge any tax?

This guide answers these questions with a step-by-step process, a document checklist and the mistakes that most often arise in practice.

How a gift with reserved usufruct works

A gift is a contract by which a person, out of generosity, transfers assets from his or her estate to that of another (Art. 538 of the Brazilian Civil Code). In a gift with reserved usufruct, the parents transfer bare ownership to the children and retain the usufruct: they keep possession, use, management and the fruits of the property, such as rent (Art. 1,394). The children are listed as owners in the property registration record (matrícula), but will only hold full ownership when the usufruct ends.

• Form: for real estate worth more than thirty minimum wages, a public deed is essential (Arts. 108 and 541).
• Registration: usufruct over real estate is created by registration at the Real Estate Registry (Registro de Imóveis) (Art. 1,391).
• End of the usufruct: it is extinguished, among other causes, by waiver or by the death of the usufructuary (Art. 1,410). If the usufruct is reserved to the couple, each spouse's part is extinguished upon his or her death, unless the deed expressly provides that the deceased's part accrues to the survivor (Art. 1,411).
• Usufruct cannot be sold: it cannot be transferred by alienation, but its exercise may be assigned, for example by lease (Art. 1,393).
• Subsistence limit: a gift of all of one's assets without reserving a portion or income sufficient for the donor's subsistence is void (Art. 548).
• Spouse: a gift of common property requires the other spouse's authorization, except under the regime of absolute separation of property (Art. 1,647, IV).

The deed may include additional clauses, such as a reversion clause, under which the asset returns to the donor if the donor outlives the donee (Art. 547), and an inalienability clause, which implies unseizability and non-communicability (Art. 1,911). Even without a clause, under partial community the assets received by gift do not become common property with the child's spouse (Art. 1,659, I); under universal community, only assets given with a non-communicability clause are excluded (Art. 1,668, I).

Advance on the forced heirship share (legítima) and collation (colação)

A gift from parents to children constitutes an advance on what they are entitled to inherit (Art. 544). In the donor's succession, children who received gifts must bring their value into the estate to equalize the forced shares, under penalty of the sanction for concealment of assets (sonegação) (Art. 2,002). This is collation.

• The donor may waive collation, directing that the gift come out of the disposable portion, provided it does not exceed it (Art. 2,005). The waiver may be stated in the gift instrument itself or in a will (Art. 2,006).
• A gift is void to the extent it exceeds what the donor could have disposed of by will at the time of the gift (Art. 549), and excessive gifts are subject to reduction (Art. 2,007).
• With several children, gifting a single property to one of them calls for extra care. An alternative is a lifetime partition (partilha em vida), valid provided it does not impair the forced share of the forced heirs (Art. 2,018).

What if the succession is governed by Portuguese law?

Here is a point that often goes unnoticed. For those living in Portugal, succession tends to be governed by Portuguese law, the law of habitual residence (Art. 21 of Regulation (EU) No 650/2012, the European Succession Regulation), and it is this law that governs collation and the reduction of gifts (Art. 23(2)(i)). In Portugal, the forced share is calculated by adding the assets given away (Art. 2162 of the Portuguese Civil Code); collation is binding on descendants (Art. 2104) and, if the gift was made by deed, a waiver of collation is valid only if made in the same form or by will (Art. 2113). And, with a spouse and children, the Portuguese disposable portion is one-third, not half. A gift made in Brazil “within the disposable half” may therefore be considered excessive under Portuguese law. The article how much you can leave by will in Brazil and Portugal includes simulations.

How to sign the gift while living in Portugal

Donors and donees living in Portugal do not need to travel to Brazil. There are three options:

• Power of attorney at the Brazilian consulate: it is a Brazilian act, and the signatures of consular authorities are exempt from legalization (Decree 8,742/2016, Art. 1, § 1).
• Power of attorney before a Portuguese notary: it is a foreign public document, which requires an apostille issued in Portugal (Hague Apostille Convention, Decree 8,660/2016).
• Deed by videoconference, via e-Notariado: Brazil's electronic notarial platform; jurisdiction lies with the notary of the district where the property is located or of the acquirer's domicile (Art. 302 of Provision 149/2023 (Provimento) of the National Council of Justice (CNJ)); in a gift, the acquirer is the donee child.

The power of attorney must be public and grant special and express powers: to gift the property identified by its registration number, reserve the usufruct, set the declared value, waive or not waive collation, include clauses and sign the deed. The children must also accept the gift, in person or through an attorney-in-fact; if the donee is absolutely incapable and the gift is unconditional, acceptance is not required (Art. 543). The page on powers of attorney between Brazil and Portugal compares the options.

If you are considering a gift and want to know, before signing, what the tax cost will be and how it fits into your succession, the Sene & Araújo team can carry out that analysis. Talk to our team.

ITCMD: which State collects the tax when the donor lives abroad

Complementary Law 227/2026 (Lei Complementar) settled the question of taxing jurisdiction, which the Constitution had left to a complementary law:

• Property located in Brazil: the tax belongs to the State where the property is located, even if the donor is domiciled or resident abroad (Art. 158, I). The São Paulo apartment pays ITCMD to that State, whether the donor lives in Lisbon or in Albufeira.
• Cash, investments and other movable assets: if the donor is domiciled abroad, the tax belongs to the State of the donee's domicile (Art. 159, II, b); if both donor and donee live abroad, to the State where the assets are located (Art. 159, III).

Other provisions of Complementary Law 227/2026 relevant to gifts:

• The taxpayer is the donee (Art. 157, II).
• The taxable event occurs on the date of the gift deed and also upon the creation of a contractual usufruct (Art. 151, II, b and c).
• The tax base is the market value of the asset (Art. 152), and rates are progressive, set by each State's law (Art. 156). The applicable rate is the one in force at the time of the gift (Art. 156, § 1, II).
• Successive gifts between the same donor and the same donee are aggregated, within the period set by state law, to recalculate the tax under the progressive brackets (Art. 155). Splitting the gift over several years may not have the expected effect.
• The tax does not apply to the extinction of a usufruct that consolidates full ownership in the person who created it (Art. 150, II).

How the tax is split between bare ownership and usufruct, and how the extinction of the usufruct upon the parents' death is treated, depend on the law of the State where the property is located and must be checked before the deed is signed.

Income tax in Brazil

• For the children: the value of assets acquired by gift is exempt from income tax (Art. 6, XVI, of Law 7,713/1988).
• For the parents: in a gift as an advance on the forced share, the assets may be transferred at the value stated in the donor's asset declaration or at market value; if at market value, the positive difference is subject to income tax as a gain, payable by the donor by the last business day of the month following the gift (Art. 23 of Law 9,532/1997).

This choice affects the children's cost basis in a future sale. For those who have already made their definitive departure from Brazil (saída definitiva) and no longer file returns in Brazil, how this rule applies must be examined before the deed is signed.

And in Portugal: Stamp Duty and IRS

Stamp Duty (Imposto do Selo)

Gratuitous transfers are subject to Stamp Duty (Art. 1 of the Stamp Duty Code), but, for such transfers, the tax is due only when the assets are located in Portuguese territory (Art. 4(3)). The code itself defines which assets are deemed located in Portugal, such as rights over real estate located there (Art. 4(4)(a)). A property in Brazil does not fall within that definition, and so the gift of a Brazilian property is not subject to the 10% tax under item 1.2, even if the donor and the children live in Portugal.

IRS

• For the parents: real estate capital gains taxed under Portuguese personal income tax (IRS) arise from the onerous disposal of real rights over real estate (Art. 10(1)(a) of the IRS Code). A gift is gratuitous.
• Rent: with reserved usufruct, the rent continues to belong to the parents. As residents of Portugal, they are taxed under IRS on all of their income, including income earned outside the country (Art. 15 of the CIRS). The Brazil–Portugal Tax Convention allows Brazil to tax income from real estate located in Brazil (Art. 6), and the tax paid in Brazil may be deducted in Portugal under the terms of the convention.
• Future sale by the children: for assets received free of charge, the CIRS treats as the acquisition value the value that served, or would have served, as the basis for Stamp Duty (Art. 45). How this rule applies to a property in Brazil should be reviewed with the accountant before any sale.

See also the page on assets in Brazil for those living in Portugal.

Step by step

1. Map the family and the assets: how many children, property regime, other properties, prior gifts.
2. Check the forced share under both scenarios, under Brazilian and under Portuguese law, to find out whether the gift fits within the disposable portion or will be an advance on the forced share.
3. Define the structure: usufruct for the couple with or without accrual to the survivor, waiver of collation, reversion or inalienability clauses.
4. Simulate the taxes: ITCMD in the State where the property is located, income tax on any difference in value, and effects in Portugal.
5. Choose how to sign: consular power of attorney, Portuguese notary with apostille, or e-Notariado.
6. Pay the ITCMD in accordance with state law and execute the deed.
7. Register the deed at the Real Estate Registry, which creates the usufruct (Art. 1,391).
8. Update your tax returns in Brazil and Portugal and review your will so that it is consistent with the gift.

Document checklist

• Updated certificate of the property's registration record (matrícula) and certificates of liens and encumbrances;
• Document showing the property's value (municipal property tax, IPTU, or rural land tax, ITR) and, if possible, a market appraisal;
• Identification documents and CPF (Brazilian individual taxpayer number) of the donors and donees;
• Donors' marriage certificate, with the prenuptial agreement, if any;
• Children's birth certificates and, if they are married, their marriage certificates;
• Public powers of attorney, if signing through an attorney-in-fact;
• Donors' latest Brazilian income tax return or the definitive departure receipts;
• ITCMD payment slip and receipt, as required by the State.

Common mistakes

• Gifting a property to only one child without checking whether the gift fits within the disposable portion under the law that will actually govern the succession;
• Reserving the usufruct for the couple without providing for accrual to the survivor, and seeing half of the usufruct extinguished upon the death of the first spouse;
• Assuming that the gift of the property in Brazil will be taxed in the State where the children are domiciled;
• Splitting the gift into several deeds to reduce the rate, without considering the aggregation provided for in Art. 155 of Complementary Law 227/2026;
• Using a general power of attorney, without powers to reserve usufruct or waive collation;
• Forgetting to align the will with the gift.

When it makes sense to consult a lawyer

A gift with reserved usufruct is a well-known instrument, but its effects depend on details: how many heirs there are, which law will govern the succession, how the State where the property is located taxes bare ownership and usufruct, and how the gift will be treated in Portugal. It is worth seeking advice when there is more than one child, children from different relationships, high-value properties, assets also in Portugal or an intention to benefit one heir more than the others.

Sene & Araújo, with lawyers in São Paulo and Albufeira, assists with gifts as part of estate planning: analysis of the forced share in both countries, drafting of the deed and powers of attorney, ITCMD and registration. Get in touch for a review of your case.

• Law 10,406/2002 — Civil Code (Arts. 108, 538, 541, 543, 544, 547 to 549, 1,391, 1,393, 1,394, 1,410, 1,411, 1,647, 1,659, 1,668, 1,911, 2,002, 2,005 to 2,007 and 2,018)
• Complementary Law 227/2026 (Arts. 150 to 152 and 155 to 159)
• Law 7,713/1988 (Art. 6, XVI)
• Law 9,532/1997 (Art. 23)
• CNJ Provision 149/2023 — National Code of Rules (Código Nacional de Normas) (Art. 302)
• Decree 8,742/2016 (Decreto) (Article 1, § 1)
• Decree 8,660/2016 (Decreto) — Apostille Convention
• Regulation (EU) No 650/2012 (Arts. 21 and 23)
• Portuguese Civil Code — Decree-Law 47344/66 (Arts. 2104, 2113 and 2162)
• Stamp Duty Code (Código do Imposto do Selo) — Law 150/99 (Arts. 1 and 4; item 1.2)
• IRS Code, Arts. 10, 15 and 45 (Tax Authority portal, Portal das Finanças)
• Decree 4,012/2001 — Brazil–Portugal Tax Convention (Art. 6)

Sene & Araújo Sociedade de Advogados team. Content prepared and reviewed by the firm's lawyers, admitted to the Brazilian Bar Association (OAB) and the Portuguese Bar Association (Ordem dos Advogados), with offices in São Paulo and Albufeira. The provisions cited were checked against the official sources listed above. Meet the team.