Innovative land & property investments
Investment Property in Brazil
Buying Guide
Buying Process
Freehold purchases
Foreigners are entitled to own freehold property in Brazil.
In order to become eligible to purchase, however, one must first obtain a CPF (Cadastro das Pessoas Fisicas) number (similar to a National Insurance number in the UK) which entitles the buyer to register title and to open bank accounts and register accounts with utility providers.
This can be done by the buyer him- or herself, assuming the buyer speaks Portuguese, or by a lawyer retained by the buyer, and costs a nominal fee.
However, most agents and developers will be able to process the buyer’s application on his or her behalf (but check beforehand what the cost will be as this is frequently seen as a money-making opportunity by less scrupulous entities).
Preliminary contract
Having selected a property the process is very similar to that operating in the UK and other European countries (unsurprising, considering Brazilian law is based on that of Portugal).
The buyer approaches the owner of the property (or the developer) with an offer.
If the offer is accepted - and some degree of haggling is to be expected regardless of how generous the offer may be - a preliminary contract is drawn up by the lawyers of one or both parties and, assuming agreement on terms, the contract is signed by both parties.
A holding deposit is usually paid at this point, normally of between five and 20 per cent of the property’s value.
Undertake checks
The buyer, or more frequently his or her lawyer, is then expected to check title and carry out other checks such as planning permits in the area etc which could reveal problems.
(Should such problems arise, only strict terms in the preliminary contract will allow the buyer to pull out while retaining his or her deposit so it is a good idea to make the preliminary contract as watertight as possible).
A survey of the property can also be carried out at this point, as can the buyer’s application for a CPF number.
The Matricula
Properties built from 1974 onwards in Brazil have a document known as a Matricula which details every transaction made regarding or pertaining to that property, as well as its exact location and boundaries, a list of previous owners, and details of any debts outstanding on the property.
It is vital that the buyer or the buyer’s lawyer checks the Matricula before agreeing to purchase: a stitch in time saves nine.
Final contract
If all is in order, both parties sign a final binding contract of sale and the buyer transfers the balance of the purchase price to the vendor as title is transferred.
he entire process from initial offer to completion should take no more than a few weeks although the wheels of Brazilian bureaucracy have been known to turn extremely slowly at times.
A competent lawyer, however, should be able to push the process along relatively rapidly assuming there are no problems with title etc.
Key Points
- Foreigners can own freehold property but must first obtain a CPF (Cadastro das Pessoas Fisicas) number (similar to a National Insurance number in the UK)
- Given that Brazil’s laws are based on Portuguese ones, the purchasing process is similar to that operating in the UK and other European countries
- If an offer on a property is accepted, a preliminary contract is drawn up and signed by both parties and a holding deposit of 5-20% of the property’s value paid
- Undertake a property survey and make checks on title, planning permits in the area and the Matricula (the document detailing all transactions made regarding or pertaining to that property)
- The buyer applies for a CPF number
- The final binding contract of sale is signed, the buyer transfers the balance of the purchase price to the vendor and the title is transferred
- The entire process should take no more than a few weeks but can take longer
Downloadable Reports and Documents
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