Property Acquisition in Brazil
Our Buyers Guide brings together our considerable knowledge and experience to provide you with information on what you need to know and the people/ organisations you are likely to encounter.
It is not meant to be a full explanation of Brazilian Property Law but a guide to the basic process.
From the moment you consider a property purchase in Brazil we are here to guide you seamlessly throughout the purchase process.
1. Property Selection
We are delighted to present our portfolio of properties in Brazil. We believe that our properties will meet your individual preferences and needs, and provide an excellent investment.
2. Reservation agreement
After checking availability of your chosen property, contact us to reserve the property with the developer. The reservation will be valid for 48-72 hours.
To proceed with the purchase you will sign a 'Reservation Agreement' form and you will be expected to pay up to a *3000 Euro 'Reservation Fee' in order to secure the property. The reservation fee is deducted from your first payment due as per the contract.
The 'Reservation Agreement will specify a date by which the first deposit is due to be paid to the developer (usually this is 3-4 weeks from signing of the reservation contract).
*Experience-International distinguishes ourselves from most other agencies in that we promise to refund your reservation fee if you change your mind within 28 days.
3. Preliminary Contract
During the reservation period you will receive an initial contract of sale (Similar to "Sold subject to contract" in the UK) usually within 48 hours of receipt of the reservation fee. The contract will be drawn up in Portuguese together with a certified translation into English.
4. Legal Representation
We strongly advise clients to perform the standard checks using a reputable Lawyer to oversee purchase proceedings and to satisfy as to the suitability of the Apartment and the implications of purchase.
We advise clients to appoint a lawyer who understands Brazilian law and is fluent in your language so that you fully understand all the legalities and proceedings. Our advisors can recommend a good lawyer who will carry out all necessary checks on the property or land in Brazil and fulfil the legal requirements of the sale.
Legal costs are generally between £ 500 and £ 1,000 depending on the value of the property purchased and services provided. The lawyer will:
- Check the current owners have the correct title to the property
- Check for any charges and liabilities still owed on the property
- Check your contract and advise you on the obligations for both parties
- Help you through the payment/funds transfer
- Ensure the property is registered in your name,
When everything is correct with the contract, your solicitor will advise you to sign the contract and transfer the first deposit payment to the developer. You must ensure that your purchase and all monies are recorded at the Central Bank as this will allow you to repatriate your funds overseas when you sell the property.
5. Construction Phase
During the construction phase we will:
- Provide regular construction updates throughout the build process to allow you to monitor the progress of your property.
- Usually there will be one or more interim instalments payments to be made prior to full completion of the property. These are usually scheduled at various stages of build and we will advise you in good time of estimated dates for interim instalments.
- Approximately one month prior to completion will send you a homebuyer's property pack. This includes details of closing procedures, furniture options, rental arrangements, recommended insurance companies and more.
6. Completion/ Title Transfer and Property Registration
Final Completion
- Prior to all construction being completed, you will be notified when your final instalment is due.
- The title of the property is usually transferred upon completion of the building and receipt of the keys and is called the 'escritura publica'. At this point a transfer of around 3% of the property value is payable to the government (equivalent to stamp duty in the UK).
- After execution of the deed the notary is obliged by law to register the transaction in the Real Estate Registry in order to make the ownership title of the acquirer defendable against third parties. This will incur a further fee of around 2% of the value of the property and is essential to safeguard your ownership rights.
7. CONGRATULATIONS. You are now the proud owner of a Brazilian property!
USEFUL INFORMATION
- To purchase a property in Brazil you will first need to obtain a Brazilian ID number called CPF (similar to a Spanish fiscal number). We can advise on the steps required to obtain the CPF and once all the documentation is received the developer can prepare the CPF within 24 hours.
- All our property is sold on a freehold or share of freehold basis.
- Maintenance of your property is covered by the Management Contract you sign upon purchase and this is charged at a fixed rate per month/ year.
- Council Tax (or IPTU) is also payable on your property. It can be paid in monthly instalments, or can be paid annually, usually with a discount of 20%. The amount is usually around ½% of the value of the property per annum.
TAX
Capital Gains Tax is 15% in Brazil over a certain threshold. There is no capital gains tax if you re- invest the proceeds into another property in Brazil within 6 months.
Experience International are not qualified to provide thorough advise on your tax liabilities. For professional advice and for treatment of taxes on rental income, capital gains and local authority taxes, please contact a lawyer or accountant who specialises in tax matters.
FINANCE
Mortgages are not currently available to foreigners purchasing property in Brazil. As common with emerging markets as the popularity of Brazil continues to grow exponentially, mortgage products will be introduced in the near future. We will of course publish details of these upon confirmation.
Some developers may provide vendor financing by providing payment plans of up to five years. Such schemes allow you to continue paying in instalments after receiving the property, sometimes for several years depending on the developer.
The most cost effective way to finance a property purchase in Brazil is to raise finance in the UK and the most common is by either by re-mortgaging or equity release. We advise you to contact a financial advisor for professional advice on this.
For more information about Brazil property and other exciting investment opportunities visit our main website
Experience International - Brazil investment property
