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 houses of worship of any religion are exempt from the requirement.

The resources obtained by the Municipality under CL 156 will be used to produce low-income housing, construct public equipment and carry out urban improvement works, among other purposes described in article 4 of the legislation.

CL 156 came into force on the date it was published. The text of the legislation can be accessed by clicking here. (Portuguese only).

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