Buying Property and Land in Brazil – Legal Process
By David Garner – Managing Partner, David Garner Consulting
Non-resident foreign nationals may buy property Brazil in urban and rural areas. Direct ownership from abroad is legal, although some property investors choose to buy property in Brazil through resident companies or partnerships. To be able to buy a property in Brazil, a tax registration number from the Cadastro de Pessoa Fisica (CPF) is required.
There are some legal restrictions on investments in rural properties in Brazil. Foreign nationals who intend to live in Brazil may acquire rural properties directly from overseas 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 complete a purchase of property in Brazil, it is both parties need to sign a public deed drafted by a (private) notary public, and to have him register the transaction with the property registrar. Property in Brazil registration in Brazil is well-developed and secure for investors, and each individual property 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 largest cities such as Sao Paolo and Rio de Janeiro, these services are automated.
A property purchase in Brazil 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 14 procedures to register a property will take around 47 days to complete.
Transaction costs for buying property in Brazil:
Transfer Tax: 3% paid by purchaser
Notary Fees: 2% to 3% paid by the purchaser
Agents Fees: 6% paid by the Vendor
Costs paid by purchaser: 6.59%
Costs paid by Vendor: 5.04%
Total round trip transaction costs: 11.63%