Brazil is becoming a popular real estate investing location, even during these tough economic times. This is true, especially since Brazil was named the host country to the 2014 World Cup. Here are a few things foreigners need to take into account before they decide to take the plunge and invest in Brazil property.
Seven Tips for Foreigners Thinking of Buying Brazil Real Estate
1.Before you can buy property in Brazil you will need to obtain a CPF (Cadastro de Pessoas Físicas) which is basically the Brazilian official ID card. You might also be required to obtain an RNE (national record of foreigners), especially if you are going to open up a bank account within the country.
2.The money you use to pay for the property should be brought into the country using a legally authorized financial institution and should be registered with Brazil’s Central Bank at the time of purchase. This will help you avoid problems when you sell the property and want to take your money back home.
3.Make sure the property is eligible for sale and that the title is free and clear.
4.Find a trusted real estate professional that can put you in contact with satisfied past clients.
5.It is important to get expert legal advice regarding Brazilian taxes. For example, a foreigner that remains in Brazil for more than 183 days in any given 12 month period will normally become subject to taxes as a resident. You will also likely be required to pay property taxes as well as taxes on any income earned from renting out your properties. Purchase tax for Brazilian property is usually for around 2 to 7 percent. Brazil does have treaties with several countries which will help you avoid double taxation however this is not true with every country, so you’ll need to find out. Tax returns in Brazil are filed annually, every April.
6.Foreigners are usually not eligible for Mortgages in Brazil however there are some companies that will allow you to pay for your property in installments. Interest rates in Brazil are very high (around 20 to 30 percent) so you would probably not want a mortgage anyway.
7.A little research and due diligence up front will help you avoid many problems later on.
Brazil is a great place to buy property. However, foreigners need to understand that they are dealing with a different legal system when they come to Brazil and should therefore take that into consideration at the time of investing.