Inheritance tax collection in São Paulo reached a new record of R$ 6.9 billion in 2025, marking a 3% increase from the previous year due to new tax reforms and heightened government oversight.
In 2025, the collection of the ITCMD (Tax on Donation and Inheritance) in São Paulo set a new record, reaching R$ 6.9 billion, reflecting a 3% growth over the previous year. This represents the highest figure recorded by the State Finance and Planning Department, adjusted for inflation. A key factor contributing to this increase was the recent tax reform that introduced new regulations for this tax, which incentivized many individuals to make lifetime donations to avoid potential higher taxes on large estates in the future. The state government has also intensified its oversight of these transactions, further boosting compliance and collection rates.
The record collection figures for 2024 and 2025 surpassed the previous high set in 2021, which had significantly increased due to a surge in asset transmissions amid the COVID-19 pandemic. Despite these impressive figures, inheritance tax only accounts for about 2% of the total state revenue, indicating that while it has seen growth, its overall impact on the state’s finances remains limited. The trend of advancing asset transfers, prompted by recent changes in tax legislation and anticipated future tax increases, reflects a strategic shift among taxpayers in São Paulo toward estate planning and tax efficiency.
As the government continues to refine tax policies and increase scrutiny over financial transactions, it's likely that the ITCMD collection will remain a focal point in the state's fiscal strategy. With ongoing discussions about potential further increases in taxes on wealth, residents may continue to adapt their financial practices to mitigate upcoming liabilities. This dynamic situation illustrates the impact of governmental tax policy adjustments on citizen behavior and state revenues.
