Investment costs in Brazil

Discussion in 'Brazil Property' started by tnjarrett, Dec 9, 2013.

  1. tnjarrett

    tnjarrett New Member

    Hello Brazil property experts, :adore:

    I am interested in investing in a rental property in Brazil. I inquired to a property management company in Rio and I was told that the typical purchase costs would be these:

    US$ 150.000,00 (transfered to Brazil)
    2,3 tx dolar (approximate conversion rate) =
    R$ 345.000,00
    (22.011,00) 6,38% IOF (capital operation tax) =
    R$ 322.989,00
    R$ (88.821,98) 27,50% IRRF (income tax) =
    R$ 234.167,03 Final money in Bank Account (available for investment)
    R$ (55,00) Bank Account monthly services

    Example of costs on purchasing a realty
    R$ 240.000,00 realty announced price
    R$ 4.800,00 2% ITBI (house tax)
    R$ 12.000,00 5% Negotiation Comission
    R$ 9.600,00 4% Documentation
    R$ 266.400,00 Final Realty Price

    My questions are

    1) I don't understand why I would have to pay the IRRF (income tax) if the money was not earned in Brazil. Is this correct? :confused:

    2) I thought that the IOF tax was suspended in June of this year. Does that not apply to investments on rental properties? :s:

    Thank you experts on this information and any insight you could give me would be greatly appreciated!

    Best regards, Tony
  2. lutjebroek

    lutjebroek New Member

    1) IR is of course only paid over earned money from said investment. Not over the capital investment itself, but f.ex. over the income from rent.

    2) Dunno, I think that was for international transfers.

    You (or they) forgot about the fee to manage the property

    How are you going to pay the bills, or receive money having no bank account in Brazil? (unless you have a visa, you can´t get one).

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