ANSWERS TO FREQUENTLY ASKED QUESTIONS
The Overseas Property People (TOP People) have prepared this handy list of answers to questions we receive most often when clients are considering an investment property in Brazil.
Why is the Brazilian economy hitting the headlines?
There has been excitement in the world’s press regarding Brazil for a number of reasons. Firstly, due to a published report from the investment bank Goldman Sachs on up-and-coming global economies. This report highlights Brazil as one of the four largest developing economies in the world along with Russia, India and China - hence the term “BRIC” nations. Brazil has weathered the storm of the past few years very well and is set to return to 5% GDP growth in 2010 and 2011. The country is looking forward to hosting the 2014 World Cup Finals and the 2016 Olympic Games. Social development programs such as the "My House My Life" housing program that help low-middle income families afford housing are being well received by investors and entrepreneurs.
Are there any restrictions on foreigners purchasing and owning property in Brazil?
There are no restrictions on foreign ownership of Brazilian property. Overseas investors are free to buy and own property and land in Brazil; indeed the Brazilian government pro actively promotes foreign investment into the country’s real estate market. Also, foreigners have the same property rights as Brazilians and will obtain a free & clear title to the property. However, there are tightening restrictions on foreigners owning agricultural land so buyers must exercise caution when venturing outside of minicipalities.
What is the purchase process for Brazilian property, and is it necessary to use an attorney?
The short answer is yes unless you are an existing client we would advise you to instruct an attorney. In general it is recommended to hire an attorney to assist in your Brazilian property purchase as they will help you negotiate through the legalities of the process, some of which may differ from a purchase in your own country. It is also advisable to ensure that they are fluent in both your language and in Portuguese. Legal costs will vary dependant on the property’s value but it is usually more cost and time effective to instruct a Brazilian attorney. MYHOUSEMYLIFEBRAZIL.COM can provide a list of high quality English speaking Lawyers for you to choose from.
What are the costs involved in purchasing a property in Brazil?
The costs involved in a property purchase in Brazil average between 1% and 8% of the property purchase price and include fees, stamp duty, etc. Beachfront property will be on the higher end of this scale, social housing on the low end.
How do you arrange for the transfer of funds when buying a Brazilian property?
It is highly recommended that you use the official route of transferring money into Brazil, in order to ensure that you do not have problems when you come to transfer funds out of the country when selling your Brazilian property. This official route involves sending your money directly from your bank account to the vendor’s Brazilian bank account via the Central Bank of Brazil. This way the bank has a record of your funds entering the country. This also adds additional security to your investment as the vendor must present the bank with the purchase contract in order to release the funds. Presuming your funds are registered entering into Brazil with the Central Bank in this way, there are usually no limitations in transferring your funds out of the country. MYHOUSEMYLIFEBRAZIL.COM will be happy to recommend a currency transfer company that will be able to assist you with this process and the may be able to save you money on bank transfer fees at the same time.
What is a CPF number and how do I get one?
Before you can purchase land or property in Brazil you will need a Brazilian ID called a CPF (Cadastro das Pessoas Físicas) number. This is the US equivalent of a Social Security Number and can be acquired via the Brazilian embassy in your home country for a small fee [around $20] or your appointed lawyer can acquire your CPF via a Power of Attorney in Brazil.. Once issued, the purpose of this tax registration number is to register the amount of capital that you are bringing into Brazil. It also allows you to repatriate your funds should you decide to sell your property.
Are there any issues with property registration in Brazil?
While it is obviously vital to ensure that the property you purchase has a clear title, the system of property registration in Brazil is safe and straightforward. All property registrations are carried out by private notary publics and registered at one single registry where all details, history and identification of the property are held. Registry information will include records on ownership, mortgages and any outstanding debts, all of which is public record. Registration services are automated in most large cities in Brazil. All investments that MYHOUSEMYLIFEBRAZIL.COM offer have been through a strict due diligence process so that you can invest with confidence and limit your legal expenses. All documentation and licenses are provided to your attorney at the outset of your investment.
Is it possible to purchase a property in Brazil without ever having been there?
It is not necessary to ever have set foot in Brazil to buy a property there, as long as you work with a reputable and professional agent or property developer. An experienced team should assist you through every step of the purchase process without you having to visit the country, and will keep you fully informed at each stage along the way. It is also important to instruct a reputable, accredited law firm with experience and competence in international property transactions to ensure your peace of mind throughout the buying process. MYHOUSEMYLIFEBRAZIL.COM will assist you every step of the way and can provide a list of services and service providers to help you with your purchase.
What are the exit strategies?
The property investment market in Brazil is showing all the signs of being at the beginning of a lengthy growth period, in which experts are anticipating at least 7 to 10 years of phenomenal growth. The local Brazilian market boasts a growing middle class [+17% per annum] youthful population and the emergence of domestic mortgage finance products. All these factors are contributing to the growth in the real estate sector, creating the perfect exit strategy for the overseas investor when it comes to selling their property.
Do you need a tourist visa in order to visit Brazil?
Most visitors to Brazil can obtain a 90 day tourist visa once they enter the country, however citizens of the USA need to apply for their visas in advance. It is possible to extend your tourist visa by a further 90 days once in Brazil through the Federal Police station. Other visas for work or permanent residence are available. Contact the Brazilian Embassy in your home country for up to date information relating to your individual circumstances. The Overseas Property People LLC work closely with a number of companys who offer visa services and can advise on the quickest and most cost effective route of obtaining a visa.
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