FAQs about buying property in Brazil

• What are the procedures?
• How much does it cost?
• Taxes
• Can I let my property?

Who can buy property in Brazil?

Investing in real estate in Brazil is as safe and easy as in any modern country like the USA or Europe. There are no restrictions for foreigners buying property and ownership is solid and secure. You own 100 % of land and property and as such ownership is freehold.

What is the process?

For a foreign investor to own real estate in Brazil the only requirement is that they have a CPF number. The number can be obtained within a couple of days (by a local Brazilian lawyer) and is a legal requirement, as it enables the investor to be uniquely identified for taxation and title purposes. The lawyer will assist you in obtaining this and the whole process can be done without visiting the country, providing that power of attorney is given to the lawyer.

Next, the real estate purchase and sales agreement is drawn up which details the full conditions of the sale and also acts as a receipt for the deposit paid. At this stage the client pays 30% of the purchase price.

How much are legal fees?

You can expect to pay approx. 7.5% in purchasing expenses as follows (for Natal):

• ITIV (similar to VAT): 3%
• Title Deed (cost for the Notary office) : 1.25%
• Registration of the deeds: 0.75%
• Administrative expenses: 1%
• Legal fees: approx. 1.5%

What are connection fees?

New properties are connected to electricity, telephone and water supplies on the completion of the development and the utility companies charge each property an amount based on the cost of connecting the development. The cost varies depending on the area and the distance from the nearest supply but is rarely more than £500 in total.

Are there any service charges?

Most new developments of villas or apartments that have communal facilities now arrange maintenance and will charge an annual service charge.

Running Costs

The estimated monthly community fee is between 50-100 euros depending on the size of the property. We have arrived at this number by researching other similar developments in Brazil and this number ought to be very close to the actual number.

The annual real estate tax is approx. 0.6%, but this tax is based on a value inferior to the value of the property, i.e. the tax is minimal.

Taxes

Income earned from property in Brazil is taxable whether the investor is resident or non-resident in Brazil. 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.

Letting opportunities

Natal is one the fastest growing long haul holiday destinations in the world. The area has a wide market appeal and is already attracting tourists from Spain, Portugal, Italy, France, Holland, Sweden, Norway, Denmark, Finland, Germany, USA, Japan, Switzerland, England (Thomson started January 2006), Argentina & recently Eastern European countries and last but not least, the large domestic tourism market of 180 million consumers.

The rental market is almost all year round and with the massive investments in resorts and golf courses on the coastline of Natal (10 golf courses within 30 minutes of Maracajaú, one right behind the project) the quality of the tourism offer will greatly improve, and as a consequence the rental market (along with increased rental prices) will grow rapidly.

The first project that was completed in Maracajaú, is already working with tour operators and generating annual rental returns around 10%. Due to the extremely affordable property prices today, the potential for high rental yields are very good in the long term. The opening of the new airport in June 2010 with estimated 5 million tourists arrivals per year, with the project reachable in 25 minutes, gives us further confidence in the potential for high future rental incomes

Please call 01252 376003 for more details

With the right people assisting you, purchasing an overseas property can be an enjoyable and rewarding affair ... one, we at Property Club International are familiar with. If you still have questions having read this section, please don’t hesitate to contact us!

Some of the information in these sections has been supplied by third parties and Property Club International Ltd and its associated companies cannot be held responsible for any errors or omissions. Professional advice should always be sought at the time of purchase. Please note that tax rates may differ from the examples given above,are subject to change and will be applied at the rate ruling at the time.