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Progressive IPTU Will Be Applied to Vacant Properties and Idle Lands; Municipalities Like São Paulo and Belo Horizonte Promise Annual Increases Until Social Function Is Fulfilled.
The Progressive IPTU is an instrument provided for in the Federal Constitution of 1988 and regulated by the City Statute (Law No. 10,257/2001). It allows municipalities to apply progressive IPTU rates on urban lands and properties that do not fulfill their social function, that is, those that remain vacant, idle, or underutilized in areas with consolidated urban infrastructure.
The objective is clear: to force property owners to appropriately use their properties, whether by selling, renting, or building, under the penalty of gradual tax increases and, in the worst case, expropriation.
Cities Like São Paulo and Belo Horizonte Leading the Implementation
Large Brazilian cities have been reinforcing the use of progressive IPTU. In São Paulo, the municipality intensified notifications to owners of idle lands in the expanded center in 2024 and 2025.
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About 2,800 properties have already been identified as subject to the application of progressive IPTU, according to data from the Municipal Secretary of Urbanism and Licensing.
In Belo Horizonte, the municipality approved a complementary law that extends the scope of progressive IPTU and provides for annual increases of up to 15% on the normal rate if the owner does not utilize the land within the legal timeframe.
These measures follow a national trend: cities like Recife, Fortaleza, and Porto Alegre are also advancing in the application of this urban instrument.
The Social Function of Urban Property
The basis of progressive IPTU lies in Article 182 of the Constitution, which dictates that property must fulfill its social function.
This means that it is not enough to own land in a valued area and leave it vacant while speculating on real estate appreciation.
The law requires municipalities to notify owners of properties considered underutilized. If, after five years of charging progressive IPTU, the property remains without appropriate designation, the municipality may initiate the process of expropriation with payment in public debt securities.
How the Annual Increase of Progressive IPTU Works
The mechanism of progressive IPTU works in stages:
Notification: the municipality identifies and notifies the owner of a vacant land or property.
Timeframe for Use: the owner has 1 to 3 years to initiate occupation, construction, or sale.
Application of the Progressive Rate: if nothing is done, the tax begins to gradually increase each year, potentially reaching two, three, or more times the original rate.
Expropriation: after five years without a solution, the municipality may expropriate the property.
In São Paulo, for example, properties notified in 2023 have already started to experience IPTU adjustments in 2025, with projections of cumulative increases of up to 50% during the period.
Impact on the Real Estate Market
The application of progressive IPTU has a direct effect on the market. Owners who kept properties vacant for speculation are pressured to sell, which may increase the supply of lands and reduce prices in some regions.
For the construction sector, this represents an opportunity to expand housing projects in well-located areas.
In São Paulo, some of the notified lands are located in areas with consolidated public transport, close to subway lines and bus corridors.
For tenants, the measure tends to stimulate the availability of vacant properties in the rental market, helping to reduce the housing deficit.
Criticisms and Challenges of Progressive IPTU
Despite its social purpose, progressive IPTU faces criticisms:
- Judicialization: many owners resort to the courts to contest notifications, delaying the application of the tax.
- Capacity for Enforcement: municipalities need technical teams to identify and prove the idleness of properties, which requires investment in georeferencing and registrations.
- Risk of Transfer: in areas with heated markets, the increase in tax may be passed on to buyers and tenants, raising prices in the short term.
Still, urban planners argue that it is one of the most effective tools to combat real estate speculation and promote the rational use of urban land.
International Experiences and the Future of the Tax in Brazil
Similar instruments already exist in other cities around the world. In Paris, vacant properties can pay municipal tax up to 60% higher.
In Vancouver (Canada), the tax on unoccupied properties tripled the revenue allocated to affordable housing.
In Brazil, experts argue that consistent application of progressive IPTU can yield two simultaneous positive effects: increasing municipal revenue and stimulating the occupation of central areas, reducing disordered expansion to the periphery.
Progressive IPTU: Vacant Properties, Idle Lands, and Pressure on Urban Speculators
The introduction of progressive IPTU in capitals like São Paulo and Belo Horizonte marks a new chapter in Brazilian urban policy.
The tax, which increases year after year until the property fulfills its social function, pressures speculators and owners of vacant lands to make a decision: sell, rent, or build.
If applied rigorously, it can change the urban landscape of large cities, bring more housing supply, and align tax policy with the social function of property as provided for in the Constitution.
If neglected, it may become just another bureaucratic mechanism with no practical effect.
In any case, the message is clear: vacant property in a valued area will no longer be an innocuous luxury, but a costly asset that will become increasingly expensive for the owner. What is your opinion on this? Leave your comments below.
Bem, alguém tem que pagar os gastos desenfreados dos nossos governantes. Quem melhor do que o contribuinte (expressão extremamente equivocada, já que não se trata de doação, mas uma extorção, uma vez que não é usada ao devido fim). Tenho um lote comprado para realizar um sonho que não pode ser realizado em função da própria “políticas econômicas, etc”. Sonho não realizado, imóvel vazio iptu cada vez mais caro. Pra completar, um órgão público que não conseguimos identificar, construiu uma galeria para escoamento de água da chuva, em todo o cumprimento do lote, reduzindo inclusive, a largura da frente. O lote já está abaixo do preço do IPTU. Agora, a quem eu vou multar por esse prejuízo? Quero saber se as grandes áreas pertencentes à prefeitura também sofrerá tais penalidades. Se deixarem lotes vagos sem manutenção, cheios de mato que passam até para a calçada? E o que de praças e jardins sem manutenção. Onde nosso sofrido dinheiro está sendo aplicada? Em melhorias para o município não é.
Se a pessoa comprou o imóvel, ela pode fazer o que quiser com ele. O Estado não tem nada haver com isso. Ele deveria cuidar da Saúde, Segurança Pública e da Educação . Mesmo porque, as pessoas estão se aposentando e saindo de São Paulo, porque o custo de vida aqui é muito alto e procuram cidades menores ou outros Estados onde o custo de vida é + baixo, fazendo com que no futuro, diminua a população e não seja tão necessário a construção de novas moradias, pois, vão sobrar imoveis va ios.
Tem muitos imóveis, aqui em Sampa,que estão vazios por causa de problemas de herança, não de especulação.