City Of Rio de Janeiro Creates Compulsory Contribution For Large Real Estate Projects

Municipal Complementary Law 156 (CL 156), published on 7 July 2015, creates a new compulsory contribution for non-residential real estate projects having a total buildable area 10,000 m2 or more.

Under CL 156, in order to obtain a construction license (Licença de Obras) from the Municipality for buildings (or groups of buildings) to be used for commercial or service purposes, the project owner must either (i) donate land to the Municipality having a value equal to 10% of the value of the land for the project, or (ii) deposit an amount equal to 10% of the value of the land for the project to a dedicated account held by the Municipality. In both cases, land values are based on the value of land for the purpose of calculating the real estate transfer tax, ITBI (Imposto sobre a Transmisão de Bens Imóveis Inter Vivos). Only...