A question still troubling in the case law is to define whether or not the Transmission Tax Cause Mortis and Donation (ITCMD) in exchanges of real estate of different values without making it price.

The real estate exchange is the legal business through which a party gives property to another person in exchange for another property, owned by that second person. This is the exchange of immovable property that may or may not have the same monetary value.

The exchange of real estate can be done with or without makes in cash. The exchange with makes occurs when, in addition to the transfer of ownership of the property, one of the parties makes payment in cash as a complement action of the payment by the ownership of the property it is receiving.

In this article, we will try to demonstrate that in the absence of makes and faced with the onerous nature of the exchange, it is impractical to require ITCMD in the operation, even if the exchanged properties have different values.

According to the Federal Constitution, it is the competence of the States and the Federal District to require the ITCMD:

"Art. 155. It is up to the States and the Federal District to institute taxes on:

I - transmission cause mortis and donation, of any goods or rights;"

The Constitution also says it is the responsibility of the municipalities to collect the Property Transfer Tax (ITBI):

"Art. 156. Municipalities are responsible for instituting taxes on:


II - 'inter vivos' transfer, in any capacity, by onerous act, of immovable property, by nature or physical accession, and of rights in rrights in immovable property, except for collateral, as well as assignment of rights to its acquisition;"

After defining the hypotheses of tax incidence described above, it is necessary to verify the legal definition of the exchange and donation.

According to Article 538 of the Civil Code, donation is understood "the contract in which one person, by liberality, transfers assets or advantages from his assets to that of another."

Therefore, in order to be faced with donation, there must be an act of mere liberality, not onerous.

In relation to the exchange, although there is no conceptualization about it in the Civil Code, there are provisions that help to differentiate it from the donation:

"Art. 533. The provisions relating to the purchase and sale apply to the exchange, with the following modifications:

I - unless otherwise provided, each contractor shall pay in half the costs of the exchange instrument;

II - the exchange of unequal values between ascendants and descendants is nullable, without the consent of the other descendants and the spouse of the alienating."

As stated, the real estate exchange can occur under two modalities: with or without makes money. The tornadoes occur when, in addition to the exchange of ownership of immovable property, there is the payment of waste (difference) of the value of the goods from one party to another in cash.

The majority understanding of the doctrine is that, in case of torna, its value can not exceed 50% of the value of the property that is received in exchange, under penalty of mischaracterizing the exchange – if it exceeds, there would have a sale and purchase of property with a payment.

In the case of the exchange, it is essential to be a costly act.

The legal concepts of exchange and donation, therefore, are not confused or resembled.

Another consequence of Article 533 of the Civil Code is that, in real estate exchanges, because they represent costly transfer, there will be the incidence of ITBI, as already established in the case-law.

On the eventual capital gain in real estate exchanges without torna, the Receita Federal do Brasil published the Cosit 166/19 Consultation Solution and the Attorney General's Office of the National Treasury Opinion PGFN/CRJ/COJUD SEI 8.694/2021/ME clarifying that there will be no capital gain to be taxed by income tax in the exchange or real estate without torna.

In detailing the legal concepts of both institutes, we began to examine the possibility of requiring ITCMD in exchanges without making real estate of different values.

In real estate and tax practice, there are many questions, whether by notaries or registrars or even the tax authorities, who seek to collect the ITCMD in the exchange without making real estate of different values.

An example of these discussions is the response given by the Department of Finance of the State of São Paulo to the Tax Consultation 21.030/19. According to the secretariat, "the exchange involving real estate of different values, carried out without due financial compensation, characterizes a donation, operation subject to taxation of ITCMD (...)".

The same understanding had the Superior Council of the Judiciary of São Paulo, for which the exchange of real estate of different values without making it represent "asset increase in a non-costly way to characterize donation."[1] In our view, several legal concepts are run over and are shuffled in the decision.

Exchange and donation, as seen, do not get confused or resemble. While the exchange is necessarily costly, the donation is always free of charge.

The authorities, therefore, whether the registrars, notaries or even the employees, cannot avail themselves of equalization or presumption to argue that, in the face of exchange of real estate of different values in which there is no makes money of difference, would be faced with disguised donation and, thus, demand the ITCMD on the value of the difference of the real estate.

The reasons for the authorities' missteps are varied.

If the authorities are convinced that this is not an exchange without making, but rather a simulated donation, there are conditions, procedures and rites in the Civil Code and in the Civil Procedural Code to be observed for the disregard of the legal business.

Articles 166 to 170 of the Civil Code regulate precisely the concepts of null acts. Articles 133 and following of the Civil Procedural Code establish the rite to be observed for the disregard of legal business:

  • Civil Code:

"Art. 166. The legal business is null and void when:

I - celebrated by an absolutely incapable person;

II - its object is unlawful, impossible or indeterminable;

III – the decisive reason, common to both parties, is unlawful;

IV - does not take the form prescribed by law;

V – any solemnity that the law deems essential for its validity is depresed;

VI - aims to defraud mandatory law;

VII – the law taxing it declares it null, or prohibits the practice, without comminar sanction.

Art. 167. The simulated legal business is null and void, but what has been disguised, if valid, is in substance and form.

  • 1 There will be simulation in the legal business when:

I – appear to confer or transmit rights to persons other than those to whom they actually confer, or transmit;

II - contain statement, confession, condition or clause not true;

III - particular instruments are dated or post-dated.

  • 2The rights of third parties in good faith in the face of the contracting parties of the simulated legal business are protected.

Art. 168. The invalidities of the preceding articles may be alleged by any interested party, or by the public prosecutor, when it is up to him to intervene.

Single paragraph. The invalidities must be pronounced by the judge, when he/she learns of the legal business or its effects and finds them proven, and is not allowed to supply them, even at the request of the parties.

Art. 169. The null legal deal is not subject to confirmation, nor does it convalesce for the course of time.

Art. 170. If, however, the null legal deal contains the requirements of another, that will remain where the purpose for which the parties sought to suppose that they would have wanted it, if they had foreseen the nullity."

  • Civil Procedural Code:

"Art. 133. The incident of disregard of legal personality shall be initiated at the request of the party or the public prosecutor, when it is for him to intervene in the proceedings.

  • 1 - The request for disregard of legal personality shall comply with the conditions laid down by law.
  • 2 - The provisions of this Chapter apply to the hypothesis of inverse disregard of legal personality.

Art. 134. The incident of disregard is appropriate at all stages of the knowledge process, in the enforcement of judgment and in the execution based on extrajudicial enforcement.

  • 1 - The establishment of the incident shall be immediately communicated to the distributor for the appropriate annotations.
  • 2 - The establishment of the incident is not necessary if the disregard of legal personality is required in the application, in which case the partner or legal entity will be cited.
  • 3 - The initiation of the incident shall suspend the proceedings, except in the case of § 2.
  • 4 - The application must demonstrate the fulfiling of specific legal conditions for disregard of legal personality.

Art. 135. After the incident, the partner or legal entity will be cited to speak and request the appropriate evidence within 15 (fifteen) days.

Art. 136. Once the instruction is complete, if necessary, the incident will be resolved by interlocution.

Single paragraph. If the decision is given by the rapporteur, there is an internal injury.

Art. 137. The request for disregard, disposal or the charge of property, which has been committed by enforcement fraud, shall be ineffective in relation to the applicant."

Without the observance of the rite imposed by the Civil Procedural Code, therefore, the authorities cannot, at their discretion and in a subjective and discretionary manner, requalify the exchange without making it into a donation, especially to enable the requirement of taxes.

This is because, in addition to the necessary respect for the rite commented above, there is in the National Tax Code express rule that prohibits the use of analogy for tax requirement purposes:

"Art. 108. In the absence of an express provision, the competent authority to apply the tax legislation shall use successively, in the order indicated:

I - the analogy;

II - the general principles of tax law;

III - the general principles of public law;

IV - equity.

  • 1 - The use of the analogy may not result in the requirement of tax not provided for by law.
  • 2 - The use of equity may not result in the waiver of the payment of taxes due."

Therefore, understanding cannot be applied by analogy, similarity, equalization or presumption of institutes regulated in Brazilian law for the purpose of demanding taxes, as also if article 110 of the National Tax Code is closed:

"Art. 110. The tax law cannot change the definition, content and scope of institutes, concepts and forms of private law, used, expressly or implicitly, by the Federal Constitution, the Constitutions of the States, or the Organic Laws of the Federal District or municipalities, to define or limit tax powers."

It is pertinent to recall the reasons for the vote-conductor of Justice Gurgel de Farias in the judgment of the RESP 1,937,821/SP – about which we comment on another article written in co-authorship. At the time, it was based that "the basis for calculating the ITBI is the venal value under normal market conditions and, as this value is not absolute, but relative, it may fluctuate in the face of the particularities of each property, the moment the transaction was carried out and the motivation of the traders".

The comment of Justice Gurgel de Farias is fundamental, because, after all, the presumption that is in the Brazilian normative system is about the good faith of the parties, as provided for in Article 113 of the Civil Code:

"Art. 113. Legal business shall be interpreted according to good faith and the uses of the place of its celebration.

  • 1 - The interpretation of the legal business shall give it the meaning that:

I - is confirmed by the conduct of the parties after the conclusion of the business;

II - correspond to the uses, customs and practices of the market related to the type of business;

III - to respond to good faith;

IV – is more beneficial to the party who has not drafted the device, if identifiable; and

V – correspond to what would be the reasonable negotiation of the parties on the issue discussed, inferred from the other provisions of the business and the economic rationality of the parties, considering the information available at the time of its conclusion.

  • 2 - The parties may freely agree to rules of interpretation, filling of gaps and integration of legal business esplanade so diverse from those provided for by law."

Moreover, the double taxation of the same economic magnitude by different entities would constitute invasion of constitutional competence, which is not allowed.

By this we mean that, if in exchanges, with or without makes, there is a visible obligation to pay the ITBI on the actual value of the transaction, one cannot consider the concomitant requirement of the ITCMD in that same transaction.

Another fundamental point is that the values of real estate in an exchange are not necessarily restricted to those determined by the market. In not uncommon circumstances, including the intimate forum of the parties, it is possible that real estate of different values is exchanged, due to preference of the physical location of the other property, its pattern, the purpose of use or even sudden disinterest or disenchantment for the property to be exchanged.

For the owners, the material value of this property may not correspond to the value assigned by the market. The value for its owner, in certain circumstances, becomes secondary, because the most immediate desire is to get away from that property.

Not necessarily, therefore, the mismarriage between the values of the property in an exchange without makes it should be treated as a disguised donation. There needs to be hard evidence from the authorities that there is a simulated or fraudulent act to justify their disqualification or requalification.

Precisely in this context is that the judge of law of the 1st and 2nd courts of public records of the district of São Paulo removed the collection of ITCMD in exchange without making real estate of different values.[2]

On the unbalance between the values of the properties object of exchange without renders, the magistrate pointed out that:

"In fact, for the contractors, the intrinsic value of the goods can be quite variable, gaining relevant appreciation for very personal issues of emotional and affective background becoming uninteresting and even despicable for changes in the living condition of each, as in the case of the applicant who reports having moved to Portugal, which prevents her from enjoying the rural property,  preferring urban real estate with the expectation of financial return that would not reach with the site."

We are thus convinced that the exchange without makes of real estate of different values can only justify the requirement of ITCMD if there is concrete evidence of simulation or fraud of the act. In addition, one must observe the rite provided for in the Civil Procedural Code for the disregard of legal business.

Judges and authorities must always keep in mind that, by presumption, legal business is appropriate and has been conducted in good faith between the parties. Their denaturation or requalification require contrary proof and observance of the rite of Articles 133 and following of the Code of Civil Procedure, not only abstract presumptions.


[1] Proc. 1001733.55.2015.8.26.0615, DJe of November 23, 2021.

[2] Proc. 1127941.72.2021.8.26.0100, DJe of 17/01/2022.