February 20, 2026
A Wealth Tax in Brazil? What You Need to Know About the Proposed IGF
Brazil may be on the verge of introducing a significant new tax, and, as a result, anyone with assets in the country—or planning a change in tax residency—should pay close attention. On February 2, 2026, lawmakers presented a proposal to create the Imposto sobre Grandes Fortunas (IGF), or Wealth Tax, a measure that has been debated for decades but never implemented.
Although still in the early stages, the proposal outlines how the tax would work, who would be affected, and how the revenue would be used.
Below, we break down the key points to help you understand the potential impact.
Who Would Pay the IGF?
Under the proposal, the tax would apply annually to individuals whose net worth exceeds R$10 million (approximately $1.9 million). Specifically, net worth would be calculated based on assets and rights held on January 1 of each year, minus outstanding debts.
The proposal identifies three categories of taxpayers:
How Assets Would Be Valued
To ensure consistency, The bill outlines specific valuation rules. For example:
Proposed Tax Rates
The IGF would use a progressive structure:
Deductions and Payment Deadlines
Taxpayers would be allowed to deduct Brazilian Taxes paid in the previous year: ITR, IPVA, and IPTU.
Payment would be due by the last business day of April.
One important note for U.S. taxpayers: if enacted, the IGF would not qualify as a foreign tax credit in the United States, since there is no equivalent federal tax under U.S. law.
Where the Money Would Go
Revenue from the IGF would be directed to Brazil’s Poverty Eradication and Reduction Fund, supporting initiatives aimed at reducing inequality and strengthening social programs. The tax would take effect on January 1 of the year following its approval.
What Happens Next?
The proposal—PLP No. 5/2026—is still in its initial phase and may undergo significant changes as it moves through Congress. However, its introduction alone signals a renewed political interest in taxing large fortunes.
For individuals with substantial assets in Brazil, or those considering a change in tax residency, this is a crucial moment to review estate and tax planning strategies. Legislative developments could materially affect long‑term financial decisions.
We will continue monitoring the proposal’s progress and share updates as they unfold.
Originally published by Abitos Accountants + Advisors on Website: Brazil’s Proposed Wealth Tax Key Impacts
Brazil may be on the verge of introducing a significant new tax, and, as a result, anyone with assets in the country—or planning a change in tax residency—should pay close attention. On February 2, 2026, lawmakers presented a proposal to create the Imposto sobre Grandes Fortunas (IGF), or Wealth Tax, a measure that has been debated for decades but never implemented.
Although still in the early stages, the proposal outlines how the tax would work, who would be affected, and how the revenue would be used.
Below, we break down the key points to help you understand the potential impact.
Who Would Pay the IGF?
Under the proposal, the tax would apply annually to individuals whose net worth exceeds R$10 million (approximately $1.9 million). Specifically, net worth would be calculated based on assets and rights held on January 1 of each year, minus outstanding debts.
The proposal identifies three categories of taxpayers:
- Individuals domiciled in Brazil, taxed on both domestic and foreign assets
- Individuals living abroad, taxed on assets located in Brazil
- Estates, which would also fall under the tax’s scope
How Assets Would Be Valued
To ensure consistency, The bill outlines specific valuation rules. For example:
- Publicly traded shares: closing price on the last business day of the year
- Non‑listed shares: market value of assets plus goodwill
- Real estate: legally established reference value
- Jewelry and artwork: periodic professional appraisals
- Other assets: market value as of January 1
Proposed Tax Rates
The IGF would use a progressive structure:
| Net Worth Range | Annual Rate | Deduction |
|---|---|---|
| R$ 10M – R$ 99.9M | 1% | — |
| R$ 100M – R$ 199.9M | 2% | R$ 1M |
| Above R$ 200M | 3% | R$ 3M |
Deductions and Payment Deadlines
Taxpayers would be allowed to deduct Brazilian Taxes paid in the previous year: ITR, IPVA, and IPTU.
Payment would be due by the last business day of April.
One important note for U.S. taxpayers: if enacted, the IGF would not qualify as a foreign tax credit in the United States, since there is no equivalent federal tax under U.S. law.
Where the Money Would Go
Revenue from the IGF would be directed to Brazil’s Poverty Eradication and Reduction Fund, supporting initiatives aimed at reducing inequality and strengthening social programs. The tax would take effect on January 1 of the year following its approval.
What Happens Next?
The proposal—PLP No. 5/2026—is still in its initial phase and may undergo significant changes as it moves through Congress. However, its introduction alone signals a renewed political interest in taxing large fortunes.
For individuals with substantial assets in Brazil, or those considering a change in tax residency, this is a crucial moment to review estate and tax planning strategies. Legislative developments could materially affect long‑term financial decisions.
We will continue monitoring the proposal’s progress and share updates as they unfold.
Originally published by Abitos Accountants + Advisors on Website: Brazil’s Proposed Wealth Tax Key Impacts
Contact:
Rosangela De Morais, Director of Client Relations
Rosangela.DeMorais@abitos.com
