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Buying Property in Brazil

Investors are now turning their attention to property in Brazil as returns on investment on Brazil property are considered to be excellent and investors are increasingly aware of the high growth potential that Brazil offers as a stable though fresh, new property investment market.

Why Buy Property in Brazil?

• Property capital appreciation of 20% per annum in some locations.
• Favourable currency exchange rates, making property transactions cheap for foreign investors.
• Brazil's progressive policies, bringing many improvements to Brazil, including a decrease in inflation to an all-time low at 5.7%.
• Active encouragement and incentives for foreign investment - overseas investors can own 100% of land and property in Brazil.
• Cost of living in Brazil only 20% of that in the UK/Europe and property maintenance costs extremely low.
• Brazil has of the lowest property prices currently on the off plan property investment market.
• Increase of thriving manufacturing industries relocated to Brazil and boosting the economy.
• Expected self sufficiency in oil reserves within the next year.
• Analysts predict Brazil is amongst the economic leaders of the future, along with Russia, India and China.
• Year-round sunshine, with average summer temperatures of 21°C.
• Great natural beauty with fantastic scenery and 7,000km of beaches.
• Low international risk of war, terrorism or SARS in Brazil.
• Easy access via direct flights from many international airports.

Buying Property in Brazil as Investment Vehicle

Buying property in Brazil specifically as an investment vehicle is a popular option amongst those aiming to capitalize on the excellent growth potential of off plan property in Brazil. This type of investment can consist of an off-plan purchase for sale prior to project completion. Alternatively, a buy-to-let situation can provide reliable rental income from the property, along with substantial capital appreciation.

Brazil: A Highly Profitable Property Investment Market

According to independent investment experts, including many articles in international property investment press, Brazil is now widely considered to be a highly profitable market.

The economic climate and tourist infrastructure are currently undergoing major upheaval, while the country’s economic strategy has caused much growth in the past 3 years.

While Brazil remains on a steady growth curve, investors are urged to catch this promising market from the very start, while prices remain low and high returns on property investment in Brazil are inevitable in current hotspot locations such as Natal in the North East region.

Brazil has excellent direct flight communications with the UK and the rest of Europe, making it a convenient holiday destination. This accessibility increases potential investment yields and reinforces the promising future of Brazil.

A low cost of living at only 20% of that in the UK, great quality of life, a fantastic climate, tropical beaches and a rich and vibrant culture are all valuable contributing factors to Brazil's success.

PURCHASE PROCESS

Below is the standard buying process in Brazil, and issues that may affect that purchase:

• Ownership of land and property in Brazil by foreigners is permitted, and all property is freehold. Non-residents may invest in property through direct ownership from abroad, or through vehicles (resident companies, partnerships or investment funds). With regards to rural property, there can be some restrictions regarding the size of the area to be acquired.
• Once a buyer has found a suitable investment property in Brazil, it is necessary to apply for a certificate known as Certidao de Onus Reais. (This is not required if you are buying an off-plan property).
• For off-plan purchases in Brazil it is advisable to carry out all due diligence with regards to checking building licenses are in place, the land is properly registered and has ‘copia da escritura publica’ and a certificate from the notary.
• The cost of the purchase must be brought into Brazil through an international wire transfer to the Banco Central do Brasil, which allows the government to record all investment into the country from overseas.
• Once a buyer has found a suitable Brazilian investment property, it is necessary to apply for a certificate known as Certidao de Onus Reais, which is an identification document for the property recounting its entire ownership history. This is issued from the Cartorio de Registro de Imoveis (Real Estate Registry Office).
• Once the purchaser receives this for the chosen property and has negotiated an agreed price with the vendor, a small non-refundable deposit is usually paid to the seller.
• A sales contract is then drawn up which details the full conditions of the sale and also acts as a receipt for the deposit paid.
• Finally, it is important to draw up the property’s sales deed completion (‘escritura’) normally carried out at the notary. Once this has been acquired, it should then be taken to the Real Estate Registry Office to effect registry.

Costs of a standard property purchase in Brazil include the following:

• Stamp duty (or purchase tax) at 3% of the purchase price.
• Government purchase tax of between 2% and 7% of the purchase price.