Because non-Brazilians are entitled to own freehold title to the land and property they purchase in Brazil this makes the entire Brazil real estate buying process that much simpler, and because Brazilian real estate is on the whole incredibly attractively priced, the overall appeal of the property market is obvious.   Associated property costs in Brazil such as taxes and maintenance costs are also agreeably low and this adds to the attraction of the sector.  For anyone contemplating purchasing in Brazil this is a guide to the buying process.

For a foreign investor to buy real estate in Brazil the only requirement is that they have a CPF number - which is like a social security number.  This form for application for this can be downloaded here: http://www.receita.fazenda.gov.br/Aplicacoes/ATCTA/CpfEstrangeiro/defaulting.htm
 
And the number can be obtained within a couple of days and the investor should be in Brazil when they apply for it.  This number is a legal requirement as it enables the investor to be uniquely identified for taxation and title purposes.

The Brazilian government has sophisticated and well developed real estate laws which protect the property owner whether they are a foreign or local owner and independent legal assistance should be sought for the entire purchase process to ensure the investor’s rights are properly looked after.

The process of course begins with investors seeking suitable land or property to meet their portfolio requirements in Brazil.  To this end they can secure the services of a real estate agent or realtor who should be regulated by the federal body known as Conselho Federal de Corretores de Imoveis or COFECI.  Because estate agents are salespeople they do not necessarily have the buyer’s best interests at heart and it is wise to maybe take a recommendation of a good agent or ask to see references or referrals from any agent you consider using.

Once a buyer has found a suitable investment property in Brazil and has negotiated a price to buy with the vendor a small non-refundable deposit is usually paid to the seller.  A sales contract is then drawn up which details the full conditions of the sale and also acts as a receipt for the deposit paid.  Assuming the purchaser already has the CPF number and notarized copies of their passport etc., the sales contract can be signed either in person by the buyer or by the lawyer acting for the purchaser if they have been given power of attorney.

The money and title transfers then take, the latter can take a couple of weeks to be recorded depending on whether the land or property being purchased is beachfront or not.  Once the sale has been completed the ongoing management of properties can be handled locally in Brazil and many investors choose to purchase with the specific aim of letting real estate out to Brazil’s growing tourism market.  Income earned from property in Brazil is taxable whether the investor is resident or non-resident in Brazil and non-residents are usually subject to a capital gains tax rate of 15% on any gains they make on properties in Brazil but both these taxation facts are subject to alteration depending on any double taxation treaties in place between Brazil and the investor’s country of residence.

Foreign individuals or foreign-owned companies can purchase property in Brazil. The mortgage market is underdeveloped in Brazil and foreigners cannot yet obtain a mortgage. Buyers usually arrange alternative financing in their own countries. However Brazilian mortgages are due to be offered to foreigners in the foreseeable future as interest rates drop and as banks develop their products.

Due to a severe lack of available housing for the Brazilians, some 20% of the population lacks adequate housing. The current development of new mortgage laws will make home ownership a more affordable option for much of the population. In 2005 about 50,000 mortgages were granted in Brazil but at high rates. In turn, with the introduction of the Brazilian mortgages, foreigners will be encouraged to create a new supply of housing and assist the economic development currently underway.

Many off-plan developments offer installment plans over between 12 to 60 months. The charges applicable vary according to developer and repayments are usually indexed.

If you have property in your own country and would like to borrow against this in an equity release plan, we can introduce you to independent financial advisors who can help you raise the necessary finance.