Environmental tax on urban property as a strategy to combat climate change in Brazil

Flávia Koerich MafraUbaldo César Balthazar

Brazil’s Tax System

Five types of taxes:

- Taxes- Fees- Social contributions- Improvement contributions- Compulsory loans

Competence of collecting taxes

Federal government:

(a)import tax, (b)export tax, (c)income tax, (d)tax on industrialized products, (e)tax on financial operations, (f) tax on rural property, (g)tax on wealth

Competence of collecting taxes

State and Federal District government:

(a)death and donation tax, (b)consumption tax, (c)automotive vehicles tax

Competence of collecting taxes

Municipal government:

(a)urban property tax, (b)realstate transfer on lifetime tax, (c)services tax

Urban Property Tax

• Taxable event:

“the property, the domain or the possession of immovable property by nature or physical accession, as defined by civil law, located in the urban area of the city” (article 32 of the National Tax Code)

Urban Property Tax

• Basis for calculating the tax at Florianópolis

Market Value = Land Tax + Edification Tax

Urban Property TaxLand Tax = territorial area of the taxable property X value of the m2 of the property X index correction according to land situation X index correction according to topography X index correction according to pedology X rate

Urban Property Tax

Land Tax index correction according to PEDOLOGY:

- firm ground = 1.0- sandy soils = 0.9- floodplains and rocky soils = 0.8- wetlands and mangroves = 0.7- dunes = 0.6

Urban Property Tax

Edification Tax = building area X value of the m2 X index correction according to the components of the

construction X index correction according to the built

area of houses or apartments X index correction

according to the structure of the edification X years of

edification X sum of points according to the unit cost of

construction related to the use and type of edification X rate

Urban Property Tax

Edification Tax

- coverage- wall- natural resources use