FIIs and ETFs

Real-estate funds (FIIs) and exchange-traded funds (ETFs) trade on the exchange like stocks, but their tax treatment is different from shares — and different from each other. Mixing them up with the stock rules is a very common error. Everything below is as of the time of writing — verify it.

FIIs (Fundos de Investimento Imobiliário)

Two flows to separate:

• Monthly distributions (rendimentos) — the "rent" a FII pays. For an individual, these are typically exempt from IR provided a set of conditions is met (the fund is exchange-traded, has the minimum number of unitholders, and you do not hold a large stake — commonly 10% or more — of the fund). Verify the current conditions; they are sometimes debated in Congress.
• Capital gain on selling the cotas — taxed at 20%, paid by DARF, with no R$20,000 exemption (that exemption is for shares only). The small IRRF "dedo-duro" applies here too.

ETFs (stock ETFs)

• Stock ETFs generally do not distribute income to you (gains accumulate in the cota).
• Capital gain on sale is taxed at 15% (swing) — and crucially, the R$20,000 monthly exemption does NOT apply to ETFs. Every taxable sale at a profit generates a DARF, however small.
• Fixed-income ETFs follow their own schedule (often a regressive table by the fund's average maturity) — verify per product.

A worked example (FII sale)

Bought 100 cotas at R$100 = R$10,000
Sold   100 cotas at R$120 = R$12,000
Gain   = R$2,000  → taxed at 20% = R$400 DARF
(the monthly rent you received along the way was exempt)

The takeaways

• FII rent is usually tax-free; FII capital gains are taxed at 20% with no exemption.
• ETF capital gains are taxed at 15% with no R$20k exemption — the most common ETF mistake.
• FII losses offset only FII gains; ETF losses follow the equity rules — keep the pools separate.

Educational only; confirm every rate, exemption and condition with current legislation and your accountant.