Real Estate Fund, Brazil, Asset Management

Buying Property in Brazil

A quick guide to buying and living in Brazil

BUYING IN BRAZIL In Brazil, foreigners have the same legal rights and entitlement to property as Brazilians, so the process of buying property couldn’t be simpler. A government tax of around 2-7% is paid when the legal title of the property is transferred to the new owner (like UK stamp duty).  Combined with legal fees (see below “legal team”), we estimate that most purchases can be completed with fees amounting to approximately 5-10% of the property value. For second-hand properties, a small deposit (a few hundred pounds) will usually secure a property and take it off the market.  The remaining funds can then be wired to Brazil direct from your bank in the UK. Off-plan properties are usually funded using a payments scheme spread over the period of the construction works.  Typically, a deposit of 10-15% is then followed with monthly payments and top-up payments during the construction period.  Legal title transfers on handover of the keys.  The payments are linked to a national “constructor price index” which means the monthly payments and thus total price of the property can fluctuate  during the construction as the price of the raw materials and construction fluctuates. We suggest you register every funds transfer to Brazil with the Brazilian central bank, as this will greatly facilitate taking the funds back to the UK if you ever need to. LEGAL In Brazil you general use a notary public but for people unfamiliar with the legal and taxation aspects, we suggest you use an  (English speaking) lawyer who has dealt with helping overseas buyers buy property before. who can help you with your purchase. They can then help you with
  • Checking the current owners have correct title to the property
  • Check for any charges and liabilities against the property
  • Check your contract and advise you on the obligations for both parties
  • Help you through the payment/funds transfer
  • Ensure that the property correctly registered in your name.  (For example husband and wife both need to be recorded as owners and you will need a CPF to buy property).
MORTGAGE FINANCING Mortgages are only just becoming available in Brazil, and to date, mortgage financing is not available to foreign buyers.  If buyers need financing, they usually arrange financing in their country as a second mortgage or equity release mortgage to purchase property in Brazil. LAND REGISTRATION SYSTEM Real estate registration in Brazil is carried out by private notary publics, under the form of a public permission, under Justice control.  All real estate registries in Brazil are under control and fiscalization of a State Judge.  The real estate registry system in Brazil is quite developed and safe, whereby each property can only be registered at a single registry, which keeps the entire commercial history and the physical identification of each property.  The access to all information of a real estate, including those concerning its owners, mortgages and other burdens, is public.  In the larger cities, these services this may be automated. It is very important to ensure that any property you buy has clear title. CODE OF ETHICS The Brazilian law imposes a Code of Ethics over all professionals and companies operating in the Real Estate segment.  There are internal disciplinary processes, with sanctions ranging from fines to violator's license suspension and cancellation. Sanctions are imposed by CRECI. RUNNING COSTS Monthly running costs of a family home (condominium charges and taxes) are approximately £60-£100.  Council tax in Brazil (or IPTU) is normally around 1.6% of the declared property value and is paid in monthly instalments. RENTAL INCOME The rental market in Brazil is currently delivering yields of around 6-10%. You will need to do annual tax returns and pay taxes on your income. LIFE IN BRAZIL The climate in the North East is very stable, with temperatures ranging from 25-32oC all year round. The cost of living in Brazil is significantly lower than in the UK, so you can be sure that your £ will go a long way. The tourism infrastructure in the North East is very good and improving all the time. All the major cities have newly constructed, well located International airports and transit times through the airport are very quick, even for international flights. The main language of Brazil is Portuguese but English speakers are

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