FAQ's about Buying Property in Brazil, Mortgages, Visas and Bank Accounts
Can foreigners buy property in Brazil and what rights do they have?
Yes, foreigners can buy and own property in Brazil. The Brazilian Government encourages overseas investment, and a foreigner has rights to own properties 100% freehold.
Can a foreigner buy and own farm land in Brazil?
Yes, a foreigner can buy and own farm land in Brazil assuming a foreigner does have a permanent visa in Brazil.
I am thinking of buying Brazilian property, but why should I invest in the country?
Once you have visited and know Brazil well, this question may not be foremost in your mind. Having said this, putting your feelings about the country and culture itself aside for one moment, Brazil has seen progressive economical growth, in particular over the past decade, and people who decided to invest a few years ago are now seeing significant returns on their investment in the form of capital gain and ongoing rental yields. As an example, Brazil has seen stable increases on property prices of up to 25% per annum in some areas for a sustained period.
The all year round good climate in the North East of Brazil is also worth taking into account because you can visit your property at any time during the year and experience sunshine, meaning that rental yields in Brazil are also potentially high as a consequence.
The is of course the now certainty that Brazil will be hosting the next World Cup and Olympics. It has generally been found that host cities and the country as a whole will benefit as the worlds eyes focus on Brazil.
Is Brazilian real estate the best overseas investment for me?
Brazil is amongst many emerging markets that are delivering similar returns on investment for the overseas property investor, so it can be regarded as one of the best opportunities for worldwide property investment at present, not only from the viewpoint of capital gain, but also the great potential for rental yields.
How do I purchase property in Brazil?
Once you have decided which property you want to buy in Brazil a verbal offer can be made through an estate agent for example, and often some negotiations will follow. Once the purchase terms are agreed, at this stage a lawyer should be appointed by you to formalise your final price agreement and to oversee purchase proceedings, including deposit or reservation payments to secure the deal for both the buyer and seller (generally 10%). With off-plan purchases, the price is however often fixed as the developer is already offering discounted prices at pre-launch stage.
The purchasing procedure in Brazil may vary slightly according to which developer or individual you are buying property from.
How does the property registration system work in Brazil?
The property registration system in Brazil is well developed and safe. The registration itself is carried out by private notary publics. All property is registered at one single registry in the particular area where you buy, 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 in Brazil has a clear title. Access to registry information is available to the public and includes relevant details on ownership, mortgages and other pending debts.
What are the associated costs with my property purchase in Brazil?
Costs to transfer property title in Brazil are the responsibility of the buyer and the fees can average between 3% and 8% of the purchase price. These costs may differ according to location and type of property that you buy (for example with beachfront property it generally costs you more). In addition, if it takes a significant amount of work to establish title and ownership, the costs could amount to more.
- A down-payment for your chosen property of usually about 10% of the purchase price is requested.
- Property title transfer/registration fees average about 5% of the purchase price, but this can vary depending on the type of property that you buy, and also the State in which you purchase.
- Payment for the property you are purchasing can often be secured with a deposit and thererafter in instalments of 12, 24, 36, 48, or even up to 84 months when buying off plan or a building in construction, but, interest rates are quite high, and generally not fixed via developer finance in Brazil. If you opt to pay in instalments, keep in mind there is also a currency risk: if the value of the Brazil 'Real' goes down and you are sending money from overseas, your property becomes cheaper, and vice versa if the 'Real' value increases.
- Payment for private sale/purchase agreements are often made all at once following initial 10% deposit, although short-term interest free finance payment contracts of up to 3 months can be made between the buyer and seller.
Do I need a Lawyer when I purchase my property, and what are the associated legal costs?
We believe is essential to appoint a qualified lawyer who is fluent in your language so that you fully understand all the legalities and proceedings when purchasing Brazilian property. Legal costs start at approximately R$2,000 (two thousand Brazilian Reais), although charges depend on the complexity of the property purchase and also value of the sale.
Your lawyers will:
- Check the current owners have the correct title to the property
- Check for any charges and liabilities still owed on the property
- Check the owners financial status/credibility
- Check your contract and advise you on the obligations for both parties
- Provide a translation of the contract into your native language
- Help you through the payment/funds transfer
- Ensure the property is registered in your name
Can I invest in Brazil and buy property with my friends?
If you are thinking of investing in Brazilian real estate with your friends or business partners for example, this is no problem at all, as up to 10 individual names can appear on a title deed following a property purchase, meaning that fractional ownership can apply in this case, which in itself is a good idea to beat the global credit crunch in today's financial market.
What is a Brazilian CPF number and how can I apply for it?
You will need a Brazilian CPF number in order to buy property, a car, or any major purchase. To get a CPF number (Cadastro de Pessoa Fisica): a) you can apply in your home country by supplying your birth certificate translated into Portuguese by a certified translator and legalised 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 the following day you will receive your assigned CPF number at the Receita Federal, or b) Alternatively, if you are visiting Brazil to buy property, it can be much easier to apply for your CPF when you are here, although we recommend that you bring your birth certificate with you and marriage certificate if this applies. Your CPF number can then be obtained during your visit.
As an overseas investor, how do I send money to Brazil to buy real estate?
When you have decided to buy a property, and assuming you are sending money from overseas, funds are sent directly from your own bank account to the seller’s bank account in Brazil, via the Central Bank of Brazil (Banco Central do Brasil). The bank records your funds entering into the country and in order to release the funds, the seller must present the sale and purchase 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 in returning funds from Brazil provided they were originally registered with the 'Banco Central do Brasil' at the time of your investment.
If you are planning on building property for re-sale in Brazil then it is best for you to set up a company to perform the activities you intend to undertake in Brazil.
Is there any risk associated with my real estate purchase?
When you invest in Brazil, yes, there is an element of risk with any Brazilian property purchase, which is why it is strongly recommended that you always use a registered CRECI property agent based in Brazil, and that you also appoint a qualified Lawyer to check all documentation relating to the property, then, your real estate purchase should run very smoothly.
What is the meaning of buying off-plan?
Buying "off-plan" means purchasing an overseas property at the planning stage before it is actually built. When you buy "off-plan" it can be an exciting process that will normally deliver good returns on your overseas investment because you have fixed the price at an early stage, and bought property in a desired established location. Certain off-plan developments in Brazil will also enable the buyer to have a say on the final outcome of the property, whether that be for general finish of the property or infact a totally different internal design just as a few examples.
What are the benefits of buying off-plan?
When buying off-plan in Brazil, properties are generally purchased for substantially lower prices when comparing to the price on completion of the build. This means that buying off-plan property in Brazil for example can potentially deliver an excellent return on investment for overseas buyers. The building process in Brazil of any project generally takes between 24 and 36 months from off-plan purchase to completion. The majority of buyers tend to agree that seeing the dream unfold in front of you can be very rewarding from the point of view that you can possibly contribute to the final shape and look of your off-plan investment along with having the time to plan ahead, which can be extremely useful when planning to move and retire abroad as just one example.
Is there a governing body of control for Brazil real estate agents?
Yes, Brazil's estate agents/realtors are monitored carefully by a governing body known as CRECI, which stands for 'Conselho Regional de Corretores de Imóveis'. Each qualified agent/realtor, or real estate business based in Brazil will be registered with CRECI and will be assigned a unique number which is lodged at the companies house.
Are mortgages available in Brazil?
The mortgage market is still underdeveloped in Brazil and as of yet foreign investors cannot obtain overseas mortgages in Brazil, unless resident in the country with a permanent visa and can satisfy bank or finance company approval criteria upon application. Overseas buyers at present usually arrange alternative finance in their own country of residence, although we do expect mortgages to become available for overseas buyers in the future as interest rates drop and as banks continue to develop their products.
Some constructors of new build and off-plan developments offer instalment plans covering periods of 12 to 84 months under financial terms. The charges applicable vary according to constructor and repayments are usually index linked (INCC).
How can a foreigner open a Brazilian bank account?
Bank accounts in Brazil can be opened by a foreigner if they have a permanent visa and buying a property doesn't automatically entitle you to have a permanent visa, although this of course does not stop you from buying your property in Brazil as funds are sent direct from your bank account to the sellers bank account in Brazil using the usual route for international bank-to-bank transfers (SWIFT or CHAPS are examples of organisations that will be involved here).
If you have a permanent visa then you gain the benefit of being able to open a current/checking account (Conta Corrente) or deposit/savings account (Conta de Poupança). Current/checking accounts give all the usual benefits including cheque books and cash withdrawal cards which you use at ATM's or for point of sale transactions in Brazil. Deposit or savings accounts in Brazil offer extremely favourable interest rates for your investment when comparing to other countries around the world.
Both 'Conta Corrente' and 'Conta de Poupança' are available to individuals (Pessoas Fisicas) with permanent visas, or for directors of a registered company in Brazil (Pessoas Juridicas).
If a Brazilian bank offers you the facility to open a bank account without a permanent visa, then please be warned, as this does not conform to current Brazilian banking laws.
What ongoing costs can I expect once I have purchased my property in Brazil?
This very much depends on what property you buy in Brazil, but as a guideline ongoing council taxes can be approximately 1% of the property value. Condominium payments for apartments vary depending on the type of building, but average between R$200 and R$750 per month. The minimum monthly wage in Brazil is approx. R$650 (approx. 323 US Dollars), so if you need workers to maintain your property for example then this can be a viable option.
Can I expect high rental yields for my holiday home in Brazil?
High rental yields can be achieved in Brazil based on good all year round weather conditions in the North East region for example. So, whether you have an apartment, rural property, or holiday home in Brazil, you can expect to see up to 30 weeks occupancy per year assuming your real estate investment is well located and close to amenities, therefore suiting a wide audience for the Brazilian holiday market. São Paulo and Rio de Janeiro are also good city examples which experience high rental yields through the holiday market and business sector demand.
Do I need a tourist visa if I decide to visit Brazil?
Most travellers visiting Brazil will receive a 90 day tourist visa on entering the country, although please note that USA citizens do need to apply before travelling to Brazil. You can apply for an additional 90 days on your tourist visa whilst in Brazil via the Federal Police station if you so wish.
I do not have the time to visit Brazil, so can I purchase properties without visiting the country personally?
We recommend that you always visit the country before investing.
What are the building costs in Brazil?
Brazil building costs range on average between R$600 to R$1,500 per square metre when you build property in Brazil, and the construction cost will be determined on the quality of materials used, amount of floor levels you intend to build with your development, the location of the site, and whether you require project management for the building phase itself.
How can I apply for my permanent visa in Brazil?
If you want to apply for a permanent residency visa for living in Brazil then you must satisfy one of the following conditions:
The administrator, manager or director of a professional or business corporation
The applicant must already be employed outside of Brazil by the parent company or by an affiliate or subsidiary of the company that proposes to employ him inside Brazil. Necessary documents for the first step will include:
Proof that the applicant is employed outside Brazil by the parent company, or an affiliate or subsidiary of the Brazilian hiring company;
Demonstrate that the Brazilian company is bringing in specialised labour that will transfer technology, increase productivity and/or bring social benefits;
Proof that the company outside of Brazil or its parent has effected total foreign-capital investments of at least US$ 200,000 in the employing company in Brazil for each visa requested.
Administrator, manager or director of a start-up company
Planned and recent start-up companies may apply for a maximum of three visas, essentially for the executives who will get the operation off the ground. The following conditions will apply:
Proof that the non-Brazilian company has been in business outside of Brazil for at least five years;
Power of attorney granted by the foreign investor to its new legal representatives for the purposes of setting up the company in Brazil;
A visa of this type will be issued initially for two years.
A foreigner who intends to remain in Brazil and will invest foreign funds in productive activities, so absorbing or training specialised labour. This category was planned for those foreigners who wish to invest funds (minimum equivalent of R$150,000 - one hundred and fifty thousand Brazilian Reais) in any kind of productive activity in Brazil. This kind of permanent visa is issued conditionally for five years.
A researcher or high level specialist
The applicant must supply:
A document from a Brazilian research institution manifesting its interest in the services of the researcher;
A curriculum vitae and appropriate academic references and diplomas.
A retired foreigner, over 50, who will transfer to Brazil the monthly equivalent of at least US$2,000. There is no limit to the number of dependents who may also receive permanent residence visas, but the main applicant must provide proof that they are genuine dependent relatives, as defined in Brazilian law.
The main applicant must prove he has a pension of at least US$ 2,000 a month. This will entitle him to visas for himself and two dependents. The applicant must demonstrate an additional US$ 1,000/month for each additional dependent, over and above the two already mentioned, and must supply, amongst other things:
A statement from the foreign agency responsible for paying his retirement pension, informing the total monthly sum;
A bank declaration authorizing monthly transfer of at least US$ 2,000.
Marriage to a Brazilian citizen
A permanent residence visa is granted to foreigners married to Brazilian citizens. Application is made to the Ministry of Justice (normally via regional Federal Police offices) or to a Brazilian Consulate abroad. Evidence (e.g. marriage certificate, statement from witnesses) should be presented of the matrimonial union. Immigration officials can make surprise visits to the couple's home to make sure that the relationship exists.
Foreigner with Brazilian offspring
A permanent visa can be granted to the foreign parent of a Brazilian child. Application is made to the Ministry of Justice (normally via regional Federal Police offices) or to a Brazilian Consulate abroad. The offspring should be economically dependent on the foreign mother or father.
I am going to live in Brazil and want to bring my family pets with me, so how can I achieve this?
If you are thinking of living in Brazil permanently, then you can bring your dog, cat, or birds with you and your family. You will have to present a health certificate issued by a local veterinarian in your home country and then approach the Brazilian Consulate to get the certificate endorsed. The timing of you obtaining this endorsed certificate and you travelling to Brazil needs to be carefully considered, as the certificate is only valid for a 10 day period from when it was endorsed. The only remaining responsibility will be to contact the flight company to arrange suitable transport for your family pets, and ensure that the transport waiting for you at the airport in Brazil is suitable for transporting your pets safely to their final destination. Please note that charter flight operators into Brazil can charge a lot of money for transporting your pets, although options such as TAP Air Portugal who fly from Europe into Brazil offer better prices for pets.
Which cities are hosting the 2014 FIFA World Cup matches in Brazil?
Please see http://www.fifa.com/worldcup/destination/cities/index.html for news about the cities, teams, matches, and stadiums.