Are there any restrictions on foreigners purchasing property in Brazil?
You do not have to be Brazilian or live in the country to buy real estate in Brazil, although there are some limitations and rules.
Foreigners interested in the potential for profitability and valorization or even to spend holidays, foreigners can acquire land, houses and apartments in Brazil, which happens frequently.
However, in order to ensure national security and sovereignty, there are some legal restrictions on the direct purchase of real estate by foreigners, especially in rural área where the real estate that may not exceed 25% (twenty five per cent) of the territorial area of the municipality where the intended property is located.
For the acquisition of rural land, the foreigner will have to have his / her stay regularized, with an appropriate visa that may even be an investor visa.
There are some other restrictions on buying property within 100 meters of the coastal strip and borders with other countries.
Are real estate transactions are handled by a notary or by a lawyer (or both)? What is the cost for such services? And who pays for the legal or notary service (buyer, seller or both)?
– For caution it is highly recommended to advise and monitor the real estate purchase and sale negotiation by a real estate attorney to analyze and check the documentation of the property and the seller, avoiding frauds, scams and problems that may undermine the legal security of the business.
However, for the negotiation to take place formally, it is essential that the purchase and sale be registered with the relevant Real Estate Registry.
Usually the fees for the registration of the purchase and sale with the notary are the buyer’s, however, the parties may negotiate differently.
What currency is used for real estate transactions?
The transaction of real estate must be registered in the notary in local currency the Real, even though the payment may be agreed in foreign currency and converted.
Who pays for the real estate commission, the buyer or the seller, or split?
– Usually the real estate broker’s commission is paid by the seller, but the issue can also be negotiated.
Could you please give a list of each of the closing costs a buyer pays (including any value added taxes on services)?
– In addition to the amount agreed for the purchase and sale of the property, the buyer will still have tax and fees involved in the transaction are the IOF (usually withheld by the bank at the time of international transfer), the ITBI (municipal tax due to the city hall where the property is located) and the notary fees for the deed and registration of the transfer, which vary according to where the asset to be transferred is located.
These, taxes, fees and other costs are usually around 10% to 15% of the business price.
Could you also please give an estimate of what percent of the purchase price a buyer pays, in closing costs? (E.g. in total, with all taxes, services, commissions and fees, the buyer’s closing costs are typically around X percent of the purchase price. A range is fine.)
– These, taxes, fees and other costs are usually around 10% to 15% of the business price.
Is there anything essential a (foreign) buyer should know about acquiring property in Brazil? (For example, new or proposed laws, caution or advice you’d like to share.)
– It is very important to collect all information about the property and the owner, if there is any backlog, if the seller is in a regular tax situation with the IRS, if there is any lawsuit in progress regarding the property or the seller that may cause problems after the purchase.
To do so, it is necessary to consult the seller’s and property’s certificates, especially of the place of the property and the seller’s domicile.
In addition, the purchase and sale agreement must be very well prepared, providing for all possible situations and guarantees, as well as indemnities due if the other party does not comply with its obligations.
Hiring a competent and reliable lawyer will prevent headache and financial and emotional damage in the future.
If you want to safely buy a property count on the Feldmann Advocacia team specializing in Real Estate Law.