How to buy a property in Brazil? What is the purchase process like? How high are realtors´ and lawyers´ fees in Brazil? What about other property purchase costs?
This article is an overview of what you can expect when purchasing real estate in Brazil. We cover the costs, taxes, process and some of the legal aspects.
Purchasing real estate in Brazil as a foreigner
Foreign individuals and nonresidents may invest in urban and rural properties through direct ownership from abroad, or through resident companies or partnerships. To be able to buy a property, a tax registration number from the Cadastro de Pessoa Fisica (CPF) is required.
However there are several restrictions on investments in rural properties. Foreign individuals who intend to migrate to Brazil may acquire rural properties directly from abroad only if they come to live in Brazil within three years from the date of acquisition. In addition, rural properties acquired by foreign companies shall be destined for the implementation of agricultural, industrial or settlement projects and these activities must be related to the companies´ purposes.
To close a sale, it is necessary for both parties to sign a public deed drafted by a (private) notary public, and to have him register the sale at the real estate registrar. Real estate registration in Brazil is well-developed and safe, and each piece of real estate can only be registered at a single registry, which keeps the entire commercial history and the physical identification of each property. Access to all information about a piece of real estate, e.g., its owners, mortgages and other burdens, is public. In the most important cities these services are automated.
A sale can be entered into directly between seller and purchaser. But intermediation can only be carried out by accredited real estate agents or agencies. The rate at which they are remunerated through commissions (a percentage over the sale or rental value) is determined by the real estate agents legislation of each region, through the Real Estate Agents Regional Councils (CREI).
All 13 procedures to register a property will take around 42 days to complete.
What are the costs like when purchasing a property in Brazil?
|Real Estate Agent´s Fee||3% - 6%||seller|
|Costs paid by buyer||7%|
|Costs paid by seller||3% - 6%|
|ROUNDTRIP TRANSACTION COSTS||10% - 13%|
| See Footnotes
Source: Global Property Guide
Footnotes to Transaction Costs Table
Transfer tax on the transfer of real property varies, depending on the location. In the city of Sao Paolo, the transfer tax is levied at a flat rate of 3% on the market value of the property, as established by the City Hall.