Buying Property in Brazil | Essential Guide | Brazil
Foreign Ownership in Brazil
There are no
major restrictions for overseas buyers for buying residential or
commercial property in Brazil.
There are some limitations or fees applicable for specific areas such as marine
land, islands, agricultural rural land or areas near Brazil's International
borders.
HOW
MUCH WILL IT COST TO BUY OR SELL PROPERTY
On average
transaction costs (ie stamp duty, fees etc) can be between 3% and 8% of
the purchase price. This may differ on the location (eg beachfront),
type of property and State you buy in. If there is a significant amount
of work to establish title and ownership then these costs may be more.
This budget
will cover you for Goverment Purchase tax (2%-7%), legal and registration fees.
WHAT
DO I NEED TO BUY PROPERTY IN BRAZIL?
To buy a
property in Brazil, you need to register for a CPF, which is a kind of credit
check document issued by the Brazilian government authorities.
Your Alexander Richards representative can help you to obtain this
quickly and easily.
LEGAL
MATTERS
We have a
panel of approved (English speaking) lawyers to help you with your
purchase.
The costs are
generally between £500-£1000.
For this the
lawyers will
- Check
the current owners have the correct title to the property,
- Check
for any charges and liabilities on the property,
- Checking
your contract and advise you on the obligations for both parties,
- Helping
you through the payment/funds transfer,
- Ensuring the
property is registered in your name.
There are
generally no limitations to returning money back overseas if registered with
the Central Bank at the time of your purchase.
MONEY
TRANSFER
Funds are sent
directly from your own bank to the sellers bank account in Brazil, via the Central Bank of Brazil who record your funds into the country. The seller has to
present their contract to the bank to release the funds. This ensures the
government have recorded your investment into the country. We recommend
you only use the official route otherwise you may have problems transferring
funds out of Brazil when you sell your property.
CAN I
GET A MORTGAGE IN BRAZIL?
The mortgage
market is quite underdeveloped in Brazil. In 2005 about 50,000 mortgages
were granted however this will grow as interest rates decline and as banks
develop these products.
Brazilians
have tended not to get mortgages because the sector is not as well
developed as in the US, UK etc and rates have been very high (20-30%) or the
difficulty in providing adequate proof of income etc.
Foreigners
cannot get mortgages. Buyers usually arrange alternative financing in their own
countries.
Some
Developers of new build & off-plan developments offer installment
plans over a between 12 to 60 months. The charges applicable vary
from developer to developer and payments are usually indexed.
If you have
property in your own country and would like to borrow against this, then we can
introduce you to an Independent Financial Advisor who can help you
raise finance accordingly.
LAND
REGISTRATION SYSTEM in Brazil
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, in which 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 Real
Estate Agents Law imposes a Code of Ethics over all professionals and companies
operating in the segment. There are internal disciplinary processes, with
sanctions ranging from fines to violator's license suspension and cancellation.
Sanctions are imposed by COFECI, through the CRECIs.
LICENSING REQUIREMENTS
All real
estate agents must enroll with the Real Estate Agents Regional Councils. All
real estate agencies must have a real estate agent partner as technical
responsible. To enroll, the applicant must take the Real Estate Transactions
Technician course. Other Industry Professionals
To close a
sale, it is necessary a public deed is drafted by the notary public, and it is
registration by the real estate registrar. The sales can be entered into
directly between sellers and purchasers, but in case of intermediation such
activity can only be carried out by real estate agents or agencies accredited
by the CRECIs. Lawyers are not mandatory, but they can only represent any of
the parties as attorneys-in-fact.
ESTATE
AGENT SERVICES
The services
are designed to assist the parties in sales and rentals. The basic services are
real estate appraisal and publicity (newspapers and placard placement),
purchasers and potential tenants assistance, Contact between the parties
through proposals and counterproposals forwarding, technical and legal advisory
for the parties and real estate documentation, agreements drafting and
assistance with public deeds and their registrations.
PROPERTY
MARKETING SYSTEM (In the US known as MLS) & REFERAL SYSTEMS
There is no
national system such as the American MLS of NAR-Homestore yet.
The agents and agencies work system is controlled by COFECI - Real Estate
Agents Federal Council, that established a national "reference" in
the practices for all States.
Almost all companies trading real estate are local, and also restricted to
their local region/state in that activity.
RELATIONSHIP
BETWEEN BUYER / SELLER & ESTATE AGENT
The purchase
and sale in the Brazilian real estate market is regulated mainly by two federal
laws: The Real Estate Agent Law (Law number 6530 of 1978), and the Consumer
Defense Code (Law number 8078 of 1990). It does not matter whether there is a
written agreement or not (although the Real Estate Agent Law requires written
agreements); in case of proof that the natural or legal person professional
sold or intermediated the sale or rental or any asset or service to a purchaser
or seller, or to a landlord or a tenant, the Brazilian legislation is quite
modern in the protection of customers rights. In general, the agreements are
entered into with the sellers or with the landlords (owners).
WHAT
ARE THE LEGAL FORMALITIES FOR BUYING A PROPERTY IN BRAZIL?
The process
can appear somewhat bureaucratic and long winded however our job is to simplify
the process and reduce the time. We will be happy to answer any questions you
might have.
INSPECTION
VISITS
VISAS/
PASSPORTS
Travellers
from most countries will receive an automatic visitors visa entry, this is
granted for 90 days. It is possible to apply for an extension for a further 90
days at the local police station. Travellers from some countries are required
to apply for a residency at their nearest Brazilian Embassy before travel.
Please ask us if you require more information about Visas to Brazil.
Before
travelling to Brazil you should have at least 6 months from the return date of
your journey until your passport expires.
FLIGHT
COSTS
Flight costs
are dramaticaly reducing to Brazil. We have can help you book your flight. An
example of a direct flight from London airports to some destinations of the
northeast of Brazil are currently around £290 to £500 (return). Prices do
fluctuate depending on the season / operator and destination airport. At
present there are over 220 scheduled flights from Europe to Brazil and ever more if you include charter flights. For example TAP has 48 weekly
flights to Brazil from Lisbon.
LIVING IN BRAZIL
As a Tourist
A normal
tourist visa is for 90 days. You can either extend or leave and reenter to get
a new tourist visa and you can stay for a maximum of 180 days per year as a
visa. Please contact embassy for details of visa waiver
countries and details of visa requirements.
As a
Resident
You can live
in Brazil if
You invest
US$50,000 in an appropriate business.
Retire to Brazil and can prove you have income of US2,000 per month as a
pensioner.Are married to a Brazilian.
Below
is a short article by Alison McGowan who bought a property in Rio:
"Brazil - the land of samba, carnival, football, caipirinha. A world of contrasts, of first
world mixed with third world, a country with a fusion and confusion of cultures
which blend into something uniquely Brasilian, tropical, colourful, exuberant.
What struck me when I first came here in 1979 was the sheer beauty of Rio, the colours, the tropical heat, the easygoing lifestyle. the infectious happiness of
the local carioca, and the brilliant music, always the music- bossa nova, jazz,
samba, chorinho..
No, it was not exactly a difficult decision deciding to live and work here,
swapping the long grey winter days in London for the sun and the warmth and the
early morning walks along the beach. In fact I stayed almost 6 years the first
time and I always knew I would be back, even though it took me 18 years to do
it. The really difficult decision was actually whether to buy here or not.
Friends, both Brasilian and British, fell neatly into one of two categories-
those who thought I would be crazy to buy, and those who thought I would be
crazy not to. Arguments put forward by the former (generally people who had
never lived here) included the safety aspect as in "with Rio such a
dangerous place you may not want to stay", coupled with the fact that
house prices were not exactly rocketing up, and there are no mortgages
available to foreigners. Counteracting this was the fact that I actually felt
safer in places I rented in Rio than I ever did in London, I knew it would not
be difficult to get a remortgage in the UK, the prices were only a third of
what I would have had to pay in London, and I really wanted to live in a home
which was just the way I wanted it, without having to worry about a 12%
increase in the rent every year. My arguments finally won!.
The buying process is not difficult, just time consuming and confusing if you
don't know the city or what to expect, you don't speak the language and you
don't have a lawyer you can trust. The time consuming aspect extends to the
actual finding of the property in the first place, as most estate agents do not
have pictures of the properties they are selling, have not personally visited
them and inevitably "bend the truth" to get you to visit places which
are clearly not what you are looking for.
In my case I was lucky. I already knew I wanted to be in Ipanema or Leblon,
quiet, but close to all the nightlife, with beautiful views and walking
distance from the sea. And having visited some 20 properties, and scoured the
Sunday papers for weeks I realised I was already renting the best possible
place. So I convinced the landlord to sell it to me. Regrets? Not a single one.
Smug? Certainly! If you want to enjoy a relaxed, tropical lifestyle in the most
beautiful of cities, there is sincerely nowhere that could ever be better than Rio."