Investment costs in Brazil

[tnjarrett]

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?

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

 

[lutjebroek]

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).