What INCC measures
The INCC-M, calculated by Fundação Getulio Vargas, measures the variation in the costs of materials, equipment, services, and construction labor. The idea is that the amount you owe keeps pace with the cost of completing the construction.
Run the numbersINCC calculator for off-plan installmentsINCC-M over 12 months: 6.61% (FGV)Open the calculatorHow the adjustment works
Every month, the outstanding balance is updated by the index variation. Subsequent installments are recalculated based on this balance. For this reason, the total amount paid until handover of the keys will be higher than the list price on the day of signing.
Simulation with hypothetical numbers: outstanding balance of R$500 thousand and an INCC of 0.5% in a given month. The balance becomes R$502.5 thousand the following month, before deducting the payment made. The actual index for each month is published by FGV.
After handover of the keys
Once the property is completed, INCC no longer applies. If the balance is financed through a bank, bank financing rules apply. If paid in installments directly with the developer, the contract defines the new index and interest rates.
What to check in the contract
- Which index adjusts the balance during construction and starting from when.
- Whether there is interest during construction (typically, there is none).
- Which index and interest rate apply after handover of the keys.
See also how to buy an off-plan apartment and down payment in installments.