Foreigners are permitted to buy, own and rent real estate in Brazil. By law Brazilians and foreigners are on almost equal footing when it comes to property ownership and tenant rights. Non-Brazilians are only subject to certain limitations dictated by national and security interests. Having said that, you still need to be careful, so to be on the safe side you must appoint a Brazilian lawyer to undertake your house purchase. The lawyer will carry out all necessary checks on the property and fulfill the legal requirements of the sale.
Legal costs are generally between £ 500 and £ 1,000 depending on the value of the property purchased.
Having selected your property you will also be expected to make an initial deposit as a sign of good faith to get the property out of the market. This is usually about 10,000 Reais or U$S 3,500.
Your lawyers will:
- Check the current owners have the correct title to the property.
- Check that the location and specification of the property is correct.
- Check for any charges and liabilities still owed on the property .
- Check your contract and advise you on the obligations for both parties.
- Check the conditions of payment(s)
- Help you through the payment/funds transfer
- Ensure the property is registered in your name
Land Registration
The property registry system in Brazil is well developed and safe and real estate registration in Brazil is carried out by private notary publics or cartorios”. All property is registered at one single registry, which records details of the entire commercial history and the physical identification of each property. It is obviously very important to ensure that any property you buy has a clear title.
Access to registry information is available to the public and includes relevant details on ownership, mortgages and other pending debts.
Brazilian CPF
You must obtain a CPF (Cadastro das Pessoas Físicas). It is an identification number that is used for documentation, registration and identification of individuals during and for financial transactions and is required for identification and registration purposes such as opening a bank account.
To get a CPF You will need your birth certificate translated into Portuguese by a certified translator and legalized by the Brazilian Consulate in your home country. This will then need to be taken to the Banco Do Brasil with your passport and birth certificate in order to formally apply for a CPF. A small fee is payable and they following day you will receive your assigned CPF number at the Receita Federal. The CPF card will then be posted to you within two months to an address in Brazil.
You can also apply for your CPF in your home country before traveling to Brazil.
Costs
Transaction costs, including stamp duty, fees etc. can average at between 3% and 8% of the purchase price. These costs may differ according to location, type of property and the State you buy in. If it takes a significant amount of work to establish title and ownership, the costs could amount to more.
Breakdown:
- Property transfer fees of approximately 4%-5% of the purchase price.
- 1% import tax on the transfer of funds from abroad.
Money Transfer
Funds are sent directly from your own bank to the seller’s bank account in Brazil, via the Central Bank of Brazil. The bank records your funds entering into the country and in order to release the funds, the seller must present the contract to the bank. We strongly recommend you use only this official route, or you may have problems transferring funds out of Brazil when you sell your property in the future.
There are generally no limitations to returning funds overseas provided they were originally registered with the Central Bank at the time of purchase.
