ADPF 342 updated: Brazil’s Supreme Court advances in ruling on restrictions on the purchase and lease of rural real estate by foreigners

On March 18 and 19, 2026, Brazil’s Supreme Court (“STF”) resumed the hearing of ADPF No. 342, which addresses the constitutionality of restrictions on the acquisition and leasing of rural real estate by foreigners and by Brazilian companies controlled by foreign capital, as provided for in Law No. 5,709/1971.

ADPF No. 342 was filed by the Brazilian Rural Society (“SRB”) and is being heard in conjunction with Original Civil Action (“ACO”) No. 2,463, filed by the Federal Government and the National Institute for Colonization and Agrarian Reform (“INCRA”), which seeks the enforcement of these restrictions for registration purposes.

Progress of the trial

At the session held on March 18, 2026, the report was presented, oral arguments were heard, and Justice Gilmar Mendes cast his vote, which was consistent with the opinion previously issued by Justice Marco Aurélio, dismissing ADPF No. 342 and granting ACO No. 2,463.

At the March 19 session, Justices Flávio Dino, Cristiano Zanin, and Kassio Nunes Marques also agreed with this position.

Subsequently, Justice Alexandre de Moraes filed a motion for review, suspending the trial. Justices Dias Toffoli, Luiz Fux, Cármen Lúcia, and the President of the STF have not yet issued their opinions.

Preliminary outcome and procedural landscape

To date, a partial majority is in favor of:

• dismissing ADPF No. 342; and
• upholding ACO No. 2,463.

This outcome implies maintaining the legal restrictions currently in force.

The ruling remains suspended, with no final decision. A relevant factor is that the STF is not at full strength, which raises the possibility of a tie.

Possible effect of a tie

Under the STF’s Internal Regulations, when an absolute majority cannot be formed in a concentrated constitutionality review, the current regulatory regime remains in effect.

This landscape has already occurred in this specific case, during the ruling on the preliminary injunction – when the tie resulted in the injunction not being upheld, precisely due to the lack of a majority. On that occasion, Justice Alexandre de Moraes argued for the restraint of expansive effects and the preservation of regulatory stability, a relevant understanding for the strategic interpretation of the ruling.

Thus, in the event of another tie:

• There will be no sufficient majority to overturn the rule; and

• The restrictive regime in force will remain applicable.

Next steps

The outcome of the case will depend on:

• Justice Alexandre de Moraes’s return of the case for review;
• The position of the remaining Justices; and
• The potential formation of a qualified majority.

Until a final decision is reached, the legal system will continue to operate under the current framework.

Demarest’s Real Estate and Agribusiness teams continue to monitor the topic and remain available to clarify any doubts.