Brazil's tax reform and short term rentals: who pays?

Since early 2026, alarming messages have been circulating on social media claiming that every owner who rents on Airbnb in Brazil will soon pay a heavy new tax. Brazil's tax authority, the Receita Federal, has publicly rejected that generalization. The reality is simpler and, for most individual owners, far more reassuring.

In this guide, we explain what the tax reform really changes for short term rentals, who will pay IBS and CBS, and when it starts.

What is Brazil's consumption tax reform?

The reform, approved by Constitutional Amendment 132/2023 and regulated by Complementary Law 214/2025, gradually replaces five taxes (PIS, Cofins, IPI, ICMS and ISS) with two new ones: the federal CBS and the IBS, shared by states and municipalities. Complementary Law 227/2026 adjusted the text, and Decree 12,955, published on 30 April 2026, regulated the CBS.

Note: income tax is not part of this reform. It still applies as usual to rental income.

Short term rentals treated like hotels

The main change is that renting a residential property for up to 90 days now follows, for IBS and CBS purposes, the same rules as hotel services. In practice, that means a 40% reduction on the standard rate, smaller than the 70% reduction for traditional residential leases. The decree also clarified that short term rentals do not qualify for the R$ 600 per month social deduction that applies to long term residential leases.

But this treatment only applies to owners who are liable for IBS and CBS. And that is where most owners are left out.

Who pays: the 3 properties and R$ 240,000 rule

An individual only becomes liable for IBS and CBS on rentals if, in the previous year, they meet two conditions at the same time:

• renting out more than 3 properties; and

• earning more than R$ 240,000 a year in rent, an amount adjusted annually for inflation (IPCA).

Both conditions must apply together. An owner with one or two holiday homes, even with high revenue, is not affected. Neither is someone with five properties who earns less than R$ 240,000 a year. In these cases, only income tax continues to apply, as before.

For companies running short term rentals, the situation is different and depends on each company's tax regime. That analysis should be done with an accountant.

When does it start?

The transition is gradual and runs until 2033:

• 2026: test year, with 0.9% CBS and 0.1% IBS shown on tax documents and offset against PIS and Cofins.

• 2027: CBS is charged in full and PIS and Cofins are abolished.

• 2029 to 2032: IBS rises gradually while ICMS and ISS decrease.

• 2033: the new system applies in full.

What about the scary numbers going around?

You may have seen simulations mentioning a tax burden of up to 44% for individuals. These calculations assume a host who is already liable for IBS and CBS and add up every tax on revenue. They do not apply to small and medium owners who do not meet the 3 properties and R$ 240,000 criteria. Before making any decision, it is worth running the numbers based on your real situation.

Individual or company?

For owners with several properties and high revenue, the reform changes the comparison between renting as an individual or setting up a company. There is no single answer: it depends on the number of properties, revenue, expenses and each owner's plans. It is a decision to make with an accountant, ideally before 2027.

In practice, what to do now

• Count how many properties you rent out and how much rent you received last year.

• Keep platform statements and expense receipts organized by property.

• Talk to your accountant about your situation from 2027.

• Keep declaring your rental income as usual for income tax.

Professional management helps here too: at Maison Luar, we send owners clear monthly reports on bookings, income and expenses, which makes the accountant's job much easier. If you own a property in Itacaré or on the Maraú Peninsula, find out how we can take care of it.

This content is for information only and does not replace advice from an accountant. Information updated in November 2026, based on LC 214/2025, LC 227/2026 and Decree 12,955/2026.

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