Q. Can foreigners own property in Brazil?

A. There are no restrictions on foreign citizens owning property or businesses in Brazil, there is no risk since properties are guaranteed by the Constitution for Brazilians and foreigners.. The only requirement to own property in Brazil is that you have a "C.P.F. number", which is the Brazilian equivalent of a Social Security Number. This number is required in order to legally identify you for tax and title purposes. This number is issued by the "Finance Ministry" and requires that you be present at the time of application. Normally, a CPF number is issued within 2-3 days, and a permanent identification card will be mailed to you in 2-3 weeks.

Q. Do you actually "own" the property, or is it "leased" from the government, like in Mexico?

A. In Brazil, you OWN the property and it cannot simply be taken from you, like in Mexico. You will have an actual title of "ownership" authenticated and recorded by the Brazilian Federal Government. Brazil has a constitution based on U.S. Constitution as well as laws which guarantee the same property rights as our own government. In addition, Brazil is quickly becoming the world-leader in attracting foreign investment and immigration. Many of the world's largest corporations (U.S. Company's as well) have invested millions of dollars in purchasing property and setting up business in Brazil. There are literally millions of foreign nationals in Brazil who own property and businesses.

Q:  Can I have confidence and peace of mind when purchasing property in Brazil?

A:  Yes, you can have confidence and peace of mind when purchasing property in Brazil.  We want our purchasers to feel completely comfortable. Brazil also has a stable government with a growing economy.  You are welcome to contact the Brazilian Embassy in your country and/or a Brazilian Lawyer to assist you. In Brazil the responsible for the transfer of a property is the Tabelião (Public Notary) and he cannot transfer a Property Title if all documents, good standing taxes certificates and other certificates needed by law have not been presented by the seller.

Q:  May I take title to a property in a corporate name?

A:  Yes, you may take title to a property in a corporate name but must it be a Brazilian company or a foreign company registered in Brazil (it take 1 month to incorporate a new one). For as individual, the lots are tax free (you only pay a small Municipal tax), even if a yearly declaration is required.

Q:  Is it easy to purchase property from abroad?

A:  Yes, it is very easy to purchase property from abroad.  The Government of Brazil allows foreigners outside their country to own property in Brazil.

Q:  Will I obtain clear title to the property?

A:  Yes, you will obtain a clear title to the property.

Q. Is Brazil "American Friendly"?

A. Unlike much of the world today, Brazil is very "American friendly". You will see more American influence on Brazilian culture than most any other foreign culture. Everything from Music, Movies, Restaurants, Fashion and Business...America is a large part of today's Brazil. I personally have never felt so welcome, adored and respected as I have in Brazil, even here in my own country.

Q. What is required for me, as an American, to visit Brazil?

A. Brazil requires Americans to have at minimum a "Tourist Visa" prior to entering the country. This requirement is in reciprocation for the requirement of Brazilian citizens to have a Visa to enter the U.S. The cost of the visa is approx $110.00 per person (identical to the U.S. fee charged to Brazilian citizens). Your visa is valid for 5 years from date of issue and will allow you to remain up to 180 days continuous in Brazil. Additionally, resident visas are available for those who meet the requirements, allowing unlimited stays in the country. Normally these visas are acquired by persons working in Brazil, retired foreigners who wish to live in Brazil, students who are studying in Brazil, etc. To apply for a Brazilian Visa, you will need to contact the Consulate General of Brazil or a Passport/Visa Expediting Service. There are several Consulates in the U.S., each servicing particular "jurisdictions".

Q. Do I need special vaccinations to enter Brazil? Is the food and water safe?

A. Brazil, in general, is not considered a third-world nation and has all of the modern technology, health care and infrastructure that you would expect in the U.S, or any European country. The cities of Rio de Janeiro, Sao Paulo, Curitiba, Porto Alegre, and Manaus are expansive and thriving tourist and business centers, home to some of the world's most technologically advanced manufacturing facilities, hospitals and transit systems. Nearly all of the cities in Brazil, (including Rio) can be visited without vaccinations. The requirements for vaccination are for your own protection and are based on the probability that you will contract an illness while trekking through the Amazon or other remote locations. Brazilian food is one of the things I love most in life and you will see it sold at small bars along the beach, at stands along busy sidewalks, from peddlers in the middle of rush-hour traffic and in some of the most exquisite restaurants in the world. Brazilians eat a great deal of meat and fresh seafood and they understand the importance of proper preparation. In addition, the public utilities, including municipal water systems are in excellent condition in most areas. Brazilian cuisine is not overly "exotic" and should sit well with most everyone. If you like barbeque, steak, seafood and plenty of fresh fruit, you will LOVE Brazil's dining opportunities!

Q. What are the costs of owning a home in Brazil? (Taxes, maintenance, utilities, etc)

A. The cost of property ownership in Brazil is a fraction of what we are use to here in the U.S. Typical property taxes for a home in brazil will run between $50-$350 annually, depending on the declared value of the property. Residential insurance to cover everything from fire to theft, with the maximum coverage and minimum deductibles will run between $55-$100 annually. Total utilities, including electric, water, gas, etc should run an average of $45-$80 a month for a family of 4-5 persons living in the home year-round. Obviously the cost would be much lower for a vacation home. Maintenance cost will depend on the level of maintenance required on the home and what level of attention you prefer to devote to your home when you are away. A full-time housekeeper (5 days a week/8 hours a day) will run you between $75-$150 per month, and to have someone simply check on the home weekly, cut the grass, etc, you will probably spend between $25-$75 per month. However, should you so choose, it is a simple matter to find groundskeepers that will live on the property (most every house has a servant's quarters) and you can factor their lack of monthly rent into their salary. These property managers will maintain the house, safeguard it and insure that it is ready for your arrival. In addition, they can perform helpful tasks while you are at the home, like grocery shopping and help arrange for pick-up and drop-off at the airport.

Q. Can a property be rented or leased?

A. Yes! There are no restrictions on leasing or renting your property out. This is actually an excellent opportunity to recoup the cost of the property, or at very least cover the overhead cost of maintaining the property. If you check on weekly or monthly rental property or timeshare costs, you will see that properties generate 10-20% return per year. The rates, of course, increase depending on the location (RIVER FRONT OR LAKE FRONT PROPERTY) and the time of year (Carnival is typically in late January or February).

Q. What is the economy and exchange rate like in Brazil?

A. The economy is stable and steadily growing. Brazil is now one of the largest exporters in the world for raw materials, such as oil, precious minerals, textiles, etc.

Q. Are there building codes or restrictions?

A. There are few restrictions, no building codes, no zoning, no hassles on rural land, but in the cities there are, in fact, building codes and an inspector will approve plans and construction to insure that the structure is safe and meets the municipal building codes. Restrictions depend largely on the area in which you are building and what type of structure you wish to build. For the most part, no restrictions exist beyond standard safety code violations and any special permits that are required are typically easily obtained.

Q. What closing costs should be expected on a typical home purchase? What is the standard time-frame for a closing?

A. For property that is not ocean-front, closing costs typically run between $600-$800 USD and require approximately one (1) week completing. For property that has an unobstructed access to the ocean, the cost is higher (additional $650-$750 USD) and requires additional time to complete the paperwork. The additional cost and time requirements are due to the fact that these properties must be recorded with the Brazilian Federal Government since they sit on the border of the country. There are no restrictions to ownership, but the government requires a fee for this recording and approx 2 weeks to process each property. As the buyer, you will not need to stay in Brazil for the duration of this process, the final paperwork can be FedEx' d directly to you upon it's completion. However, you will have, prior to departure, copies of all necessary documents and the sale contract for the property. The original document must remain in Brazil until it has been recorded (1-2 weeks) and will then be sent to you directly.

The basic procedure for closing in Brazil is as follows:

#1 Buyer acquires a Brazilian C.P.F. number

#2 Buyer and Seller agree on purchase price and deposit is sent to Seller.

#3 U.S. based sales contract and receipt for deposit is sent to buyer with terms of purchase.

#4 Buyer/s arrive in Brazil to complete paperwork and obtain necessary documentation.

#5 Buyer and Seller enter "Cartorio" (Brazilian Title Company) to complete Brazil based sales contract. Title paperwork is initiated and a legal "copy" of all documentation is given to each party. (1-2 days) At this point the title is legally transferred and the seller now has no further control over the property. Buyer's can, if they wish, return home now. The original documents and title will be sent directly to the new owners.

#6 The title transfer is immediately submitted for recording (1-2 weeks).

#7 Title is recorded and final documentation is sent to new owners.

Q. Can an Escrow company be employed to hold the funds until title has been transferred?

A. Funds may be held by a Panama Law Office acting as a third-party escrow agent. The reason being that transfer from personal U.S. based bank accounts can sometimes become overly complicated and time-consuming due to the tight regulations on monetary transfers entering the country. However, arrangements can be made to hold your funds based on proof of title transfer.  If you only feel comfortable with a U.S. based bank holding the escrow holding the funds until transfer, then we will accommodate your requirements, at your expense.  Expect delays and buyer and seller inconvenience with a U.S. based escrow account. 

POSSESSION AND OWNERSHIP 

With respect to real estate properties, two broad categories of rights emerge: the right of possession and the right of ownership:

The right of possession is a personal right to exercise certain powers of ownership such as: the right to claim, maintain or recover the possession of property; the right to receive its fruits (including rents and other income from the property), the right to be indemnified for necessary improvements carried out, and the right to retain the object. 
The possession of property is forfeited by abandonment, by transference, by the loss or destruction of the property, by its becoming ineligible for purchase or sale, by a third party taking possession of the property, by the non institution, in due time, by the possessor, of the applicable claim to maintain or reinstate the possession, and by constituto possessorio. 

The right of ownership is the most important of all property rights and is defined by the Brazilian Civil Code as the right of an individual to use, enjoy and dispose of his goods, and to recover them from whoever may have taken possession of them unlawfully. It is an absolute and exclusive right, which may, however, belong to several persons at the same time, in relation to the same property, as in a co-ownership or condominium, which is when each of the co-owners of an asset has all the property rights in relation to an ideal part of such asset.
The right of ownership may be restricted in view of public interest or in respect for the property rights of third parties, as in the following situations:

the expropriation of real estate properties by the government (ownership of private property is transferred to the expropriating authority against payment of an indemnity);

the restrictions relating to the division of urban land as, for example, those restrictions to buildings construction, establishing of industrial plants in critical pollution zones, etc, imposed by the law of the municipality where the property is located;

the restrictions imposed in the interest of national security, such as the restrictions on the sale of private land in the coast or within 150 kilometers of the national frontier; and

the restrictions to the right of the proprietor to freely dispose of his goods, arising from the status of insolvency, bankruptcy or "concordata" of the proprietor, in order to protect the creditor's rights.

ACQUISITION AND LOSS OF OWNERSHIP 

GENERAL PROVISIONS 

According to Brazilian law, ownership of real estate property is constituted upon the registration of the public or private instrument through which the sale was accomplished at the appropriate Real Estate Registry of the location where the property is situated. The execution of any instrument involving real estate property that was not registered at the respective Real Estate Registry will only become a binding instrument between the parties involved in the sale agreement and, thus, will not be enforceable against third parties. Real estate property is acquired by the registration of the act which have transferred the property, due to any cause, such as:

by the sale and purchase agreement signed by the parties;

by accession (which is the enlargement of the land caused by the incorporation of parcel of the soil, dislocated by natural forces);

by prescription (which is the acquisition of ownership by the possessor who, although not being the owner, has had the possession of the property during a certain period of time, stipulated by law); and

by inheritance.
Likewise, any act which modifies, extinguishes, transmit or create rights related to immovable properties must be registered with the competent Real Estate Registry, such as:

court orders by which undivided land is divided among different owners;

court orders in the winding-up of an estate of a deceased person or the division of property, awarding immovable property to creditors in payment of the debt of the estate;

public auctions and adjudications; and

orders of separation, divorce and nullity which involves the settlement of property or rights in rem related to immovable properties.
The main grounds for extinguishing real estate ownership are:

expropriation, which is the unilateral act of public law by which individual ownership is transferred to the relevant government authority, upon payment of fair compensation by said authority, due to public interest;

transfer;

waiver (for example, when the heir renounces his rights of inheritance); and

abandonment or destruction of the property.

ACQUISITION OF RURAL PROPERTY BY FOREIGN PERSON OR FOREIGN LEGAL ENTITY 

The acquisition of rural property by foreigners who have permanent residence in Brazil or by foreign companies authorized to operate in Brazil is regulated by Law No. 5.709("Law No. 5.709/72"). This law provides that individual foreigners with residence in Brazil cannot acquire more than an area equivalent to 50 (fifty) units of rural property called "módulos rurais". The area of each "módulo rural" is determined by the law of the unit of the Federation where the land is located, according to the specific economics and environmental characteristics of the region where the property is situated and to the kind of agricultural activity to be developed in such area.  On the other hand, the restrictions to the acquisition of rural properties by Brazilian companies with foreign equity control are now being questioned because of the 1995 amendment to the Federal Constitution which removed the distinction between Brazilian companies and Brazilian companies with foreign equity control. However, the restrictions on foreign individuals and foreign corporate entities authorized to operate in Brazil remain in force. 

There are no restrictions for small parcels of land.

According to Law No. 5.709/72 foreign companies can only acquire rural property, more than an area equivalent to 50 (fifty) units of rural property called "módulos rurais", if the purpose is the implementation of agricultural, cattle-raising, industrialization or colonization projects, and that such projects must be linked to their respective statutes. Such projects must be approved by either the Brazilian Agriculture Ministry or the Department of Trade and Industry, as the case may be. The President of Brazil may, upon specific decree, authorize the acquisition of rural property beyond the provisions of the current law, in cases where such property is the object of priority projects involving the country's development plans. 

The Law intend to protect small farmers against big foreign Companies.

GENERAL REMARKS AND REQUIREMENTS UPON PURCHASE 

The acquisition of a real estate property in Brazil due to inter vivos transactions is generally agreed between the purchaser and the seller by means of a sale agreement. If a property is acquired by a single buyer (not in a condominium situation), than the buyer has absolute title to that area of ground. In case of multiple ownership (as it is the case of condominium), each owner can exercise all the rights of ownership, except those incompatible with the indivisibility of the property (for example, the property can not be sold without the approval of all owners, and the price paid must be divided among them). 

Besides the specific requirements related to transactions involving immovable property, Brazilian law requires, as for any other type of contract, that the parties of a sale and purchase contract be capable to perform such a transaction. They must have full legal age (majority), be mentally healthy, or, if not capable, they must be duly represented to perform such a transaction. 

TAXATION 

INTER-VIVOS TRANSFER TAX - ITBI 

Inter-Vivos Transfer Tax ("ITBI") is a tax assessed by the municipalities which is due when real estate property or rights in rem to any real estate property (except those in guarantee), and also assignment of rights for the acquisition of property is transferred, for any reason whatsoever, and on a remunerated basis. For example, the rate established to the Municipality of São Paulo, according to São Paulo Municipal Law No. 11.154, varies from 2% to 6%, depending on the property's value. 

ITBI is not assessed when the transfer of real estate property or rights to any such property takes place to pay up the capital of a company or when resulting from any merger, consolidation, spin-off or liquidation of the legal entity, except if in any of the above mentioned cases, the acquirer's chief activity is the purchase and sale of such assets and rights, lease or commercial lease of real estate property. 

REAL ESTATE INVESTMENT FUNDS - FINANCIAL INSTRUMENT 

Real Estate Investment Funds were established to provide funds for developing real estate ventures for subsequent sale, letting or leasing. The Brazilian Securities Exchange Commission must authorize, regulate and inspect Real Estate Investment Funds operations and administration. 

Property Investment funds are currently being used for the purposes of raising funds for the construction of several Shopping Centers throughout Brazil. Previously, pension funds were direct investors of real estate projects but currently they are investing indirectly, by purchasing shares of property investment funds. 

Both individuals and corporations resident or domiciled abroad are entitled to acquire such shares, provided that the funds resulting from the investment are duly registered with the Central Bank of Brazil, thereby enabling the return abroad of the respective investment and the gains resulting therefrom. Capital gains resulting from investments on property investment funds are subject to withholding tax (IR) at a rate of up to 20% upon disposal or drawing of Real Estate Investment Funds quotas.  

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