Legal aspects of buying property in Brazil

It is quite straightforward for foreign nationals buying property in Brazil.

The Brazilian government encourages foreign investment and there are no restrictions on foreign real estate ownership with foreigners having the same rights and obligations as Brazilians themselves.

The Brazilian government allows 100% foreign freehold ownership of land and property.

It is also worth pointing out that the Brazilian government has sophisticated and well developed real estate laws which protect property owners whether they are foreign or local.

Real Estate transactions are secure as the Brazilian real estate registry shows the owner’s name and buyers can check if the sellers have any debts or liens on the property.

Purchasing a property in Brazil

To purchase a Brazil property, a CPF (Catastro de Pessoa Fisica) number is needed.

This is a registration number that you will need for any administrative action in Brazil including buying a property.

You can either apply for the CPF online through the website of the Receita Federal, or at your local Brazilian embassy.

The CPF also implies that you will have to fill in a yearly tax return form, so the authorities can follow the progress of your property (and, possibly, any income derived from it).

Private sales contract

A property can be initially purchased through a “private” sales and purchase agreement which details the full conditions of the sale and also acts as a receipt for the deposit paid.

This contract can be signed by buyers or by lawyers acting on their behalf if they have been given a power of attorney.

It is always recommended to use a lawyer when buying a property not only in Brazil but anywhere in the world.

Title deed and real estate registration

Properties are usually bought and sold using a “public sales and purchase deed” (“escritura publica de compra e venda”) which can be drawn out and signed in front of any notary, anywhere in Brazil. This document should then be registered in the real estate registry in the town where the property is located before the registry can issue the register of that property (“matricula”) which shows an extract of the selling and purchase contract and confirms the ownership of the property.

Property Taxation in Brazil

There are basically three types of property taxes in Brazil:

1. The IPTU: A local yearly property tax which usually ranges from 0.5% to 1.5% of the value of an asset, depending on the use of the property and its location.

2. The ITBI, (Imposto sobre transmissão de bens imóveis): A real estate transfer tax which totals with other costs 2 to 3 % of the value of the property and is paid to officially register the change of property ownership before a Notary Public

3. IR – Imposto de Renda: Capital gains tax on the sale of the property which usually amounts to 15% of the profit made on the sale of the property. A new law was recently introduced waiving this tax if the proceeds of a sale are reinvested in another property in Brazil within 180 days of the sale.

For further information and to view some of the latest Brazil property opportunities in the northeast then please visit Experience International www.experience-international.com