Property Brazil - A Guide to Buying Property in Brazil

Home Brazil   Buying Property in Brazil

Brazil – Buying Guide

The government of Brazil welcomes the purchase of residential and commercial real estate by foreigners and you can buy without restrictions. 

Most private overseas investors are concentrating their property purchases on the Bahia region of Brazil, where off-plan developments are offering buyers excellent value for money.

Brazilian CPF

This is Brazilian ID and will be necessary for you to buy property. In order to obtain the CPF, your birth certificate will need to be translated into Portuguese and then legalized by the Brazilian Consulate in your home country.  this, along with a small fee, must then be taken to Banco Do Brasil with your passport to formally apply for a CPF. 

The next day, your assigned CPF number will be ready at the Receita Federal.  The actual card will be posted to you at your Brazilian address within two months.

You can download the application form for a CPF by clicking here.

The Lawyer

It is highly advisable to get a lawyer who speaks your language to negotiate the legal paperwork and searches necessary to make the purchase. 

Lawyers will check the current owners are indeed the title holders and ensure the property is later registered in your name. They will also make sure any charges and liabilities still owed on the property are cleared and make sure you are aware of any contractual obligations you may have. 

Land registration in Brazil is well developed and administered. All property is registered at the registry where details are held on the entire commercial history and ownership of the property along with physical specifications. 

This information is freely available to the public and often automated in large cities.

Costs

Factor in around 3-8% of the purchase price, depending on location and property type. Costs are as follows:

Down-payment on your chosen property - 10,000 BRL (approx. $3,500 USD)

Off-plan payments are sometimes made in instalments of 12,24, 36 and 48 months, but interest rates can be as high as 35%. Also, bear in mind the currency implications of a fluctuating Real which could mean the price you pay for your property goes up or down.

Transfer fees – approx. 4-5% depending on the purchase price
Legal fees – between 2,000 and 4,000 BRL (approx 996 – 1,990 USD)

Funds Transfer

International funds transfer is made to the sellers’ bank via the Central Bank of Brazil, where the amount is recorded as entering the country in your name. In order to release your funds, the seller must present the sales contract to the bank. This is the recommended method of payment as, having registered with the Central Bank, you will not have any problems repatriating funds out of Brazil when you come to sell your property in the future.

Mortgages

Brazil is still quite undeveloped in terms of local mortgages and anything offered will come with a high interest rate. Most overseas purchasers obtain alternative financing from other countries. Some new-build developers offer instalment plans of between 12 and 60 months which are worth comparing with other financial options.

Tax

Income earned from property in Brazil is taxable, whether you are a resident or non-resident in Brazil. 

Stamp duty: 
Private companies called cartórios provide notary services and will arrange registration of deeds. Cartórios charge anything from a few cents for simple, certified copies to thousands of Realis (BRL) for arranging property deeds.

Transfer tax: 
This is included in the fees charged for real estate transfers and varies 2-4% of the declared value.

Capital gains tax: 
Non-residents are usually charged capital gains tax at a rate of 15% on any profit made on real estate in Brazil.

Inheritance tax: 
There is no inheritance tax in Brazil. 

Tax on rental income: 
Tax is charged on worldwide income for residents of Brazil at 15%, but a tax advisor will advise you of some foreign tax relief and credits that can be allowed under specific tax treaties. Mortgage interest is not deducted when calculating taxable rental income.

Taxation is subject to alteration depending on individual circumstance and any double taxation treaties in place between Brazil and your country of residence.

See also: Property Investment in Brazil