City Tax Is Seen as a Royal Pain

Every summer, when the steamy tropical heat made top hats and tight bodices simply too much to bear, Brazil’s last emperor and his retinue would decamp to this mountain retreat outside Rio de Janeiro.

They set up court in the stately homes that sprang up along Petropolis’ broad, leafy boulevards. They feasted at sumptuous dinners and danced at lavish balls hosted by the royal palace. Presiding indulgently over it all was Pedro II, the last monarch of the only royal family in modern South American history, whose solid gold crown sparkled with 639 diamonds and 77 pearls.

Those days of pomp and revelry ended in 1889, when Pedro was deposed in a bloodless republican coup and dispatched into exile.

But more than a century later, the residents of this former royal haunt are still paying -- literally -- for their city’s once-exalted status.

All real-estate transactions in certain parts of Petropolis remain subject to a 2.5% tax whose proceeds go directly to Pedro II’s heirs. Their illustrious ancestor lost the throne 117 years ago, Brazil is now a thriving democracy, and most citizens scoff at the idea of restoring the monarchy; but it still pays to have royal blood.

The entitlement breeds a slight bit of unrest among the masses, especially those who accuse Pedro’s progeny of giving little back to Petropolis even as continued development and subdivision of property potentially earns them more money.

“I think it lamentable that in this day and age, it still exists as a source of income for a minority that never concerned itself with giving some sort of compensation toward [improving] the city’s environment,” said Ricardo Barelli, the president of a local association of engineers and architects. “Property sales continue, the tax continues to be collected, and the more the land is divided, the greater the revenue possibilities.”

But the heirs insist the amount they receive hardly keeps them in clover.

“Everybody thinks always that the royal family is very rich, but no,” said Dom Joao Henrique de Orleans e Braganca, a great-great-grandson of the last emperor.

Each of Pedro II’s 40 or so descendants receives about 3,000 reais (approximately $1,350) a month from the fund, which Dom Joao described as a pittance, but which is about 10 times what a minimum-wage worker earns. Dom Joao sold his share in the company that administers the fund to his cousins 15 years ago in order to concentrate on real-estate investments elsewhere.

At 51, Dom Joao is perhaps the highest-profile member of the former royal family in Brazil, known as the “surfer prince” in his youth for his penchant for catching the wave in places as far off as Indonesia. (He still surfs.)

But the clan that once ruled Latin America’s largest country no longer makes much of a splash in the news, banished to more mundane existences as professionals, scientists, artists and other commoners’ pursuits. Apart from a squabble over the family china that resulted in some nasty allegations of stealing a few years back, whiffs of scandal are infrequent, partly because nobody much cares.

Only a few of the royal heirs live in Petropolis. The family’s current patriarch, Dom Pedro Gastao de Orleans e Braganca, an urbane but somewhat eccentric figure who would often sally forth from the Palace of Grao-Para on horseback, lived here for decades before retiring in ill health recently to Spain. His wife is King Juan Carlos’ aunt.

That Brazil has its own royalty at all is partly the result of a father-son feud.

In 1807, during the Napoleonic Wars, the royal family of Portugal fled to their colony of Brazil, established court in Rio and were so enchanted that King Joao VI stayed on to rule his homeland from South America for years after it was safe to return to Europe. When he eventually went back to Lisbon, his rebellious son, Pedro, declared Brazil independent from Portugal and himself emperor in 1822. His embarrassed father reluctantly acceded to the split a few years afterward.

The Brazilian monarchy achieved its golden age under Pedro II, whose full name takes almost as long to recite as his 48-year reign (Pedro de Alcantara Joao Carlos Leopoldo Salvador Bibiano Francisco Xavier de Paula Leocadio Miguel Gabriel Rafael Gonzaga de Braganca). History books describe Brazil’s only native-born monarch as a progressive, cultured, charitable man who was fascinated by science and excited to meet inventor Alexander Graham Bell on a visit to Philadelphia.

Pedro II died in bitter exile in Paris in 1891, two years after his overthrow.

“He died poor, with nothing. All that we have is the furniture they put on the ship when they went into exile,” said Dom Joao, whose airy home in a Rio suburb contains some of those pieces.

The lands of Petropolis, however, were later declared a special case by the Brazilian government. Officials decided that the emperor’s heirs retained a residual right to the land and therefore the ancient right to apply the 2.5% levy, known as a laudemio, on all transactions.

Defenders of the laudemio bridle at criticism that a privileged bunch is being subsidized at regular folks’ expense. They note that the former royal family isn’t the only institution benefiting from such an anachronistic practice. The Brazilian navy levies a similar tax on land along the coast, and the Roman Catholic Church also charges a laudemio in some areas.

But that doesn’t stop the grumbling of some Petropolitanos -- or the bewilderment of outsiders who come here and buy property.

“They’re surprised and puzzled. ‘This still exists?’ they ask,” said Marcos Labanca, a local real estate broker.

When residents here joined the rest of the country in rejecting a 1993 ballot measure to bring back the monarchy, the mayor at the time cited disgruntlement over the tax as one of the reasons. The referendum asked voters whether they preferred a presidential, parliamentary or monarchical system. The kingly option, which was soundly defeated, never had much chance.

Dom Joao still believes in it. A constitutional monarch as head of state could act as “a stabilizer,” he said in an interview with The Times, someone to maintain the nation’s dignity above the fray of Brazil’s fractious political scene.

Still young-looking and enthusiastic, Dom Joao has, in the past, declared himself ready to serve his country as its sovereign if duty calls. But he knows the likelihood of a restoration is slim to none.

Besides, he keeps plenty busy with his real estate ventures and his amateur photography -- he has published several coffeetable books. And soon after the interview, he was off to Morocco, still in search of something as elusive as a crown: the perfect wave.