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AdvancedBrazilian REITs · Lesson A4.3 · Module A4

Liquidation: what happens to your money

Module A4: Events that change the fund

10 slides~4 minquiz at the end

In this lesson

  • How a Brazilian REIT winds down
  • The math: R$ 100 book value, R$ 75 received
  • 20% withholding tax and your purchase note
See the slides
Empty office floor with no furniture

Brazilian REITs · Lesson A4.3

The fund is closing. How much do you get?

Liquidation returns whatever the property sales bring in — not the book value.

Step by step

How a fund winds down

  1. Decisionmeeting vote or end of term
  2. Selling assetsproperty is slow: months or years
  3. Pays the billscosts and debt come first
  4. Payoutsmoney comes back in installments

Do the math

Book value R$ 100, you get R$ 75

R$ 80Mproperty sales−R$ 5Mcosts and debt=R$ 75Mfor holders
R$ 75M÷1Mshares=R$ 75per share

Illustrative fund with a book value of R$ 100 per share before liquidation.

It doesn't arrive all at once

18 months, three payouts

  1. Month 6R$ 30 per sharefirst sale
  2. Month 12R$ 25 per sharesecond sale
  3. Month 18R$ 20 per sharelast building, fund closed

Illustrative dates and amounts. Trading in the shares stops at some point along the way.

Tax is withheld at source

Same R$ 75, two holders

Bought at R$ 60

R$ 72 net

  • Gain of R$ 15 per share
  • 20% tax withheld: R$ 3

Bought at R$ 95

R$ 75

  • Loss of R$ 20 per share
  • No gain, no tax

Receita Federal IN 1,585/2015, art. 37. Rule in force in 09/2026.

Bought on the exchange?

Keep your purchase note

  • Brokerage noteproves what you paid
  • Administratorwithholds the tax — and must ask for the note
  • Why it mattersthe tax is on payout minus cost

Receita Federal IN 1,585/2015, art. 37, § 4.

Remember this

Three takeaways

  1. Not the book valueYou get what the sales bring in, minus costs and debt.
  2. Slow and in installmentsProperty is illiquid: payouts over months or years.
  3. 20% tax at sourceOn the gain. Hand your purchase note to the administrator.

Quick quiz · 1 of 2

In a liquidation, you own shares bought on the exchange. What do you give the administrator?

See answer

The purchase note. It proves your cost, and the 20% tax withheld at source applies only to the gain.

Quick quiz · 2 of 2

Properties sold for R$ 45M, debt of R$ 5M, 500k shares. How much per share?

See answer

(R$ 45M − R$ 5M) ÷ 500k = R$ 80 per share, before tax on any gain.

Lesson complete

Next lesson

A4.4Advanced · Lesson A4.4Share buybacks and the rules under debateWith shares below book value, buying back and cancelling can lift value for those who stay.Continue
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Image credits
  • Andrea De Santis · Pexels · Pexels License — Pexels
  • Mike Haw · Wikimedia Commons · CC BY 2.0 — Wikimedia Commons

Educational content, written for learners. Not investment advice.