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Starting in Brazil 2026, the federal government will apply a 5% Income Tax rate on the income from some of the most popular investments among Brazilians, such as LCIs, LCAs, FIIs, CRIs and CRAs. With this, it is essential to understand the new 5% taxation and how to prepare for this tax change, ensuring that your investments continue to generate good returns.
In LCIs and LCAs alone, the total stock exceeds R$ 1 trillion, which highlights the weight of these assets in the portfolio of the Brazilian investor. With the new fiscal policy, the expectation is of a direct impact on the net profitability of these investments.
In this article, we explain what changes with the new investment tax in 2026, which assets will be impacted, what industry experts say, and how investors can prepare.
What changes from 2026
Currently, income from LCIs, LCAs, FIIs, Fiagros, CRIs and CRAs are exempt from income tax for individuals. This advantage is one of the main attractions of these assets.
With the proposal under discussion, investments made from 2026 onwards will have a 5% income tax on income. The change will not be retroactive. Those who invest until December 31, 2025 will maintain the exemption on the income generated by these contributions.
The proposal was officially presented within the context of tax reform and is seen by the government as a way to correct distortions and expand the collection base.
Assets affected by the new taxation
The change affects some of the most used fixed income assets and funds for wealth building and passive income generation:
- LCIs and LCAs (Real Estate and Agribusiness Letters of Credit)
- FIIs (Real Estate Funds)
- Fiagros (Agribusiness Funds)
- CRIs and CRAs (Real Estate and Agribusiness Receivables Certificates)
These investments, which currently have tax benefits, will no longer be totally exempt if the proposal advances. Given this, it is important to consider alternatives to balance your portfolio. Treasury Direct is a safe and low-risk option, guaranteed by the government, and can be a way to diversify your investments amid tax change, while maintaining the predictability and stability of yields.
Comparison: Before and After 2026
| Investment | By 2025 | From 2026 onwards |
|---|---|---|
| LCI / LCA | Immune | 5% IR |
| FII (PF)** | Immune* | 5% IR |
| Fiagro (PF)** | Immune | 5% IR |
| CRI/CRA | Immune | 5% IR |
*Current exemption valid for individual shareholders with up to 10% of the fund listed on the stock exchange.
**PF = Individual
Market position: FII Club Alert
The taxation proposal generated concern in the market, especially because it broke the tax predictability of assets exempt from income tax, such as LCIs, LCAs, FIIs, CRIs, CRAs and Fiagros. The change may discourage new investments, mainly affecting small and medium-sized investors.
In addition, it can reduce the liquidity and attractiveness of these products, impacting the real estate sector and agribusiness. Fiscal insecurity tends to reduce confidence in the market, forcing a reassessment of the portfolios of more conservative investors, who may seek alternatives with less risk.
Impact on Bombinhas and the real estate market
In cities such as Bombinhas (SC), where the real estate sector is dynamic and valued, many investors use FIIs and LCIs linked to local developments. The new taxation may reduce the attractiveness of these products, requiring a reassessment of the strategy.
With financial income being taxed, physical real estate tends to gain even more prominence as an investment alternative, for several reasons:
- Consistent appreciation: Bombinhas is one of the most sought-after coastal cities in Santa Catarina, which boosts the appreciation of real estate over the years, especially in regions such as Mariscal, Canto Grande and Quatro Ilhas.
- Income potential from vacation rentals: The city receives thousands of tourists every year. A well-located property can generate excellent returns with short rentals during the summer and holidays, often exempt from income tax up to a certain income limit.
- Less exposure to frequent tax changes: Unlike financial assets, real estate suffers less tax interference in the short term, especially if used for own use or informal rental.
- Store of tangible value: Unlike paper assets, real estate is real assets that offer asset security, protection against inflation, and the possibility of personal or family use.
- Growing demand from foreigners: Bombinhas has attracted the attention of investors from Argentina, Uruguay and Paraguay, which heats up the market and generates new opportunities for those who buy today.
Given this scenario, diversifying part of the equity in physical real estate in the region can be a smart strategy, especially with the horizon of changes in the taxation of previously exempt products.
How to prepare for the new taxation
Even with the proposal still under debate, it is already possible to adopt measures to protect your portfolio. Here’s how to get ahead of it:
- Anticipate investments in exempt assets until 2025, ensuring that the exemption is maintained in current investments
- Review your portfolio, especially if you focus your passive income on products that are currently exempt
- Diversify between physical real estate, funds from other sectors, and traditional fixed income
- Follow the progress of the proposal, as it may undergo adjustments before final approval
- Seek expert advice to assess impacts and adjust your long-term strategy
In addition, it is essential to follow the economic projections and monetary trends that impact the financial market.
Conclusion
The proposal to tax 5% on the income of LCIs, LCAs, FIIs, Fiagros, CRIs and CRAs marks a turning point in the Brazilian investment scenario. Although the rate is considered low, the impact on net profitability and investor confidence requires extra attention.
Planning ahead, diversifying investments, and staying informed are essential attitudes to get through this new fiscal cycle safely and intelligently.
- Explore Bombinhas with the 360° tour and discover the main sights of the city in an interactive way
FAQs
- Why is real estate in Brazil considered a good investment? Investing in real estate in Brazil is considered an excellent option due to the constant appreciation, high demand for real estate, and security from inflation. The Brazilian real estate market remains attractive, especially in growing regions with developing infrastructure.
- What is the average return on investment in real estate in Brazil? The return on real estate investment can vary depending on the location and type of property. However, in high-potential urban or tourist areas, the return can be significantly high over the years.
- Buying properties for rent or for appreciation: which is better? The choice between renting real estate or buying for equity appreciation depends on your goal. If you are looking for passive income, renting may be ideal. For a long-term return, the appreciation of the property in expanding areas is an excellent strategy.
Read More
- Why invest in real estate in Brazil?: If you are considering investing in real estate in Brazil, understand the reasons why the market remains promising, including the appreciation of equity, passive income from rent, and economic security in times of uncertainty.
- Charge to enter the city of Bombinhas: Learn how the entrance fee system works in Bombinhas (SC), the impact on tourists and how this charge has influenced tourism and the local real estate market.
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