Ok while the "buying and selling" thread has a lot of good advice, it's hard for new members to sift through the information to find the basics they need to purchase a property in Brazil safely.
So - everyone feel free to chip in your R$ 2 of advice and I'll try and keep this list updated. We want simple to understand, irrefutable facts about investing in Brazil for a non-resident. Opinions will not be counted and their posts deleted. Contradictory information will be debated until a consensus is reached. Constructive ideas and posts which help this thread be a source of good advice will be kept - anything else will be deleted. So if you are going to discuss something else, such as advice where and what to invest in - do it in another thread or your post WILL dissapear.
Thanks to everyone for their contributions:
- Once you have decided on a property, you must sign a contract in Portuguese
- You should also sign a translation of the contract in your own language - read it!! Keep in mind that in case of conflict the Portuguese contract will prevail - the translation is merely a guideline so that you know what you are signing.
Note: Both contracts should be signed by both parties and each party should get a copy. The very very basic information which needs to be in the contract is: the buyers name, sellers name, description of what is being sold/purchased, price (at least in BRL),the date, the CPF numbers of each party and the registration number of the property being bought/sold. If purchasing from a Pessoa Física (from an individual not from a company),and if the seller is married the contract should also be signed by spouse. There are 2 exceptions whereby the spouse does not have any rights to the property: A. If marriage regime is "comunhão parcial de bens" and the property was in the sellers possession before the marriage or B. For properties that seller acquired via inheritance (even if after marriage). or C. If the marriage regime is "Separaçao de Bens"
- 100% of the money for the purchase of your property in Brazil has to be registered as entering the country from you personally - never pay real estate agencies overseas or the developer anything more than a reservation fee and even then only when they agree to send that reservation fee to Brazil and register the money as coming from you. Make sure you get receipts for your payments proving that the money was sent to the country in your name. There is one exception where the money might be paid outside Brazil. This is possible if both the buyer and the seller are residents outside Brazil. This does not waive the fiscal obligations of the seller should he or she be liable to capital gain tax and the sale has to be registered in Brazil so that the property can be put in the buyers name. The reason for this is unless "Banco Central do Brasil" has the money registered as entering the country from you personally, when you come to sell the property, you won't be allowed to take the money out of Brazil unless you can prove where you got it from. If your money never came into the country to start with, obviously you never bought a house and therefore can't have made money from the sale of a house.
- If you are even a little bit unsure - retain legal representation - the cost of having a lawyer help you through the process is, in the long run, much much cheaper than losing your money. Let me say that again: Retain a lawyer to check the documentation! You should look at retaining legal counsel who speak both the language of the country you are buying in and your own language so that they can ensure that the documentation is not only legal but also suits your personal needs.
- For you to be able to purchase a property in Brazil, the builder must be able to present you with numerous legal documents. The key document to get for minimal peace of mind is the "Registo de Memorial de Incorporaçao". If you aren't familiar with the documentation yourself and/or don't speak the language, have the documentation checked by legal counsel. Bear in mind that this is only the first step of the legal checks. Unless you speak the language and are familiar with the process, hire legal representation who do speak the language and can check the documents for you.
- You need a CPF identification card to purchase property in Brazil. To sign the private purchase contract your passport number will do. However a CPF number is compulsory to sign the public notary deed, to have the property registered in your name in the Public Register and to get utilities bills issued in your name. It is much easier, cheaper and faster to arrange the CPF while you are in Brazil - however it can be done from overseas at a higher cost. The cost in Brazil is minimal. While previously overseas investors needed to file a tax return annually, in 2010 the law changed - overseas investors now only need to file a tax return each year if the value of their properties adds up to more than R$ 300.000,00 (previously it was R$ 80.000,00). Receita divulga novidades da Declarao do IRPF 2010
- Even if you can't check the legalities on the development you want to buy on, at least do your own checks on the developer or real estate agent who is selling it to you. Do a google search on the company name, any employees you know that work there and use "google translator" if the webpage results are in a foreign language.
- If the person you are purchasing from recommends one law firm and one law firm only, be wary
- To be able to sell property in Brazil, you need to be registered as a CRECI agent. Real Estate Agencies which are not based in Brazil are not subject to CRECI requirements and may make reservations on property in Brazil however any agency based in Brazil must have one. Overseas agents should have a CRECI registered agent as a local contact to tour their clients in Brazil if and when needed.
- Any marketing material for developments in Brazil must clearly show the CRECI license number of the agent doing the advertising and the registration number of the "Memorial de Registro de Incorporaçao" of the development being advertised provided the marketing material is being published in Brazil. Without these two reference numbers, the property can not be legally advertised in Brazil. Advertisements published outside of Brazil are not subject to these requirements.
- Capital Gains Tax in Brazil is not that complicated. Even if you use an accountant (recommended) you can double check to see if he is ripping you off by using a free capital gains tax program available for download from the Receita Federal. The base rate for CGT is 15% but by the time deductions are applied it works out to a bottom line of 5-6%. It shouldn't take you more that 5-10 minutes to plug in the numbers and the program will guide you through the steps. "Programa de Apuração dos Ganhos de Capital - GCAP2008" Receita Federal do Brasil
- Non-residents can not open bank accounts in Brazil - although it is legally possible it is in practice very hard to find a bank who will open a bank account for you without a residency in Brazil.
- Tourist can generally stay in Brazil for up to 90 days, renewable for another 90 days - meaning you can stay in Brazil for up to 180 days in any 360 day period - only a return ticket is required, and sufficient funds for the stay can be requested but hardly ever are. Brazil has a reciprocity policy - so if your country makes it hard for Brazilians to enter (US, Canada, Australia for example) then you may need a visa - we suggest you check before planning your trip.
- Other ways of obtaining a resident visa in Brazil include work visas, student visas, teaching visas, retirement visas, or if you are married to a Brazilian National or parent of a Brazilian child
- You can apply for an investor visa which will allow you to remain as a resident for 3 years. The investor visa, providing you have satisfied the authorities, is usually made permanent after 3 years, and only renewed for a specific period if you are borderline. If it is renewable, the law states that it should be for no more than 9 years and only if all the requirements are met. These requirements are (barring exceptions) invest R$ 150.000,00 or more into Brazil and with this investment create employment for Brazilian residents. The company needs to be set up and the money in Brazil before you can receive the investor visa. During the period in which you have applied but are waiting to receive the visa, the company and the money will have to be controlled by an "Administrador" - a person who is a resident in Brazil. There is currently no way to limit the powers of the "Administrador" so he/she should be chosen wisely. The purchase of residential property is not acceptable as an "operating business" for the investor visa. You need an office which can be subject to random inspections. More details here: http://www.propertyforum.com/forum/brazil-property/11877-brasilian-investment-law.html
- The income limit before you need to pay income tax is R$ 17.215,08 per year (February 2010) or R$ 1.434,59 per month
Do you need regestering the land to your own name if you intend to resell the land in short time? I have been told that another way to do that is if the solicitors hold the deeds for that time. I am not sure if that is common practice?! :hmmmm2: