Investment Property in Brazil

Property purchase

Foreign ownership

Foreigners are entitled to own freehold property in Brazil – they need to obtain a CPF (Cadastro das Pessoas Fisicas) number. This entitles the buyer to register title and to open bank accounts and register accounts with utility providers. This can be done by the buyer or by a lawyer retained by the buyer and it costs a nominal fee.

Buying steps: preliminary contract

Having selected a property, the process is very similar to that operating in the UK and other European countries. Once an offer on a property is accepted, a preliminary contract is drawn up and, assuming agreement on terms, the contract is signed by both parties. A holding deposit is usually paid at this point, normally of between 5–20% of the property’s value.

Buying steps: checks

Checks are then carried out on the title and issues 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).

Buying steps: Matricula

Properties built from 1974 onwards in Brazil have a document known as a Matricula which details every transaction made regarding 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.

Buying steps: completion

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. The entire process from initial offer to completion should take no more than a few weeks, providing there are no problems.

Costs and taxes

The costs associated with purchasing a property in Brazil will vary depending on the type and location of the property in question, but the following is a general guide:

Property purchase tax – this is applied by the government at between 2-7% depending on the home’s value and location
Import tax - funds brought in from abroad are liable to a tax of 1%
Stamp duty – this is payable at 5%
Estate agents fees - anywhere between 4 and 10%
Legal fees – these should come to around €750