City government admits mistake and property tax increase could exceed 50%.
The increase in IPTU (Property Tax) for approximately 90 properties in the city of São Paulo was due to a system error at the Finance Department, the City Hall admitted; the adjustment, due to the calculation error, reached 50%. However, the acknowledged error does not mean that taxpayers will receive a discount; on the contrary, the department is considering an even higher tax burden on affected taxpayers to compensate for the tax errors of previous years.
247 - The increase in IPTU (Property Tax) for approximately 90 properties in the city of São Paulo was due to a system error at the Finance Department, the City Hall admitted. The adjustment, due to the calculation error, reached 50%. However, the acknowledged error does not mean that taxpayers will receive a discount; on the contrary: The department is considering imposing an even higher tax burden on affected taxpayers to compensate for the shortfall in collections from previous years.
A report from the Folha de S. Paulo newspaper. highlights that "theWhile even larger adjustments are possible, the current ones are being questioned because the law that updated the General Property Valuation Schedule in 2014 provides for an increase of up to 10% per year compared to the previous year. Adjustments to the tax calculated according to the updated market value in 2014 should have been phased in according to the law, respecting this ceiling of 10% per year, except for addresses with excess undeveloped area. In other words, those who received a 50% tax bill this year should have received this phased adjustment over the last three years until reaching the total percentage."
According to the newspaper, "the Deputy Secretary of Municipal Revenue, Pedro Ivo Gandra, responsible for calculating the tax and issuing the payment slips since 2017, argues that the charge above 10% per year is justified by an interpretation of the same law and occurs when there is an increase in the value of the property and the discount bracket is exceeded."