The Imperative Inclusion of Simple Land Subdivisions in the Special Tax Regime

Abstract

This article examines the legal and economic merits of extending Brazil’s Special Tax Regime (RET) to simple land subdivisions (loteamentos). The analysis of real estate development, lot condominiums, subdivisions, and the segregated estate (patrimônio de afetação) reveals a functional symmetry of governance, segregated accounting, and fiscal control between subdividers and developers. In light of the framework for controlling extrafiscal tax rules, an exclusion based on the type of project is a distinction lacking pertinence to the RET’s inducing purpose. The article shows that the Tax Reform preserved this asymmetry in the transition rules (arts. 485 and 486 of Complementary Law 214/2025) and proposes a correction on two fronts: adjusting Law 10,931/2004 as to IRPJ and CSLL, and aligning art. 486 with art. 485, given the election window open until 2028.