Buyer’s Guide for Real Estate in Brazil
The process for buying property in Brazil is simple but somewhat different from elsewhere in Latin America. Here more than anywhere, it is worth having good, competent legal counsel. Engage your lawyer in the process before you sign anything.
Step 1
Get your CPF number: You must obtain a tax ID (CPF) number to purchase a property in Brazil. This is not needed to execute a sales contract, but will be needed for the title transfer.
Step 2
Apply for title insurance, if you intend to do so. Title insurance brings peace of mind to many people buying in foreign countries, where the laws and local property issues are unfamiliar. Title insurance is available from First American. To obtain more information, contact Turalu Brady-Murdock at tmurdock@firstam.com.
Step 3
Complete a private sales contract. In this sense, “private” means one that is not registered with a notary. In this contract, you’ll specify the purchase price and any terms or conditions for the sale. (When you pay for the property, the seller cannot withdraw the money from the bank without presenting this contract.)
Step 4
Create an escritura publica, which will be the public record of the sale. This step is mandatory for any property valued at more than BRL$10,000.
Step 5
Pay the transfer tax, which is 2% of the value of the property.
Step 6
Take the escritura (and proof of tax payment) to a special notary who performs the recording of real estate transactions. This notary enters your property into the official registry.
Legal Procedure of Buying Property in Brazil
When buying property in Brazil, all transactions must be made through Brazil’s central bank. All money sent to Brazil must come through the official banking system, in communication with the central bank.
Also, it’s important to note that when closing on a real estate purchase, the Brazilian bank that represents the seller can credit the money to him only if both parties have signed the contract. This means that if you transfer the amount to the purchase of an asset and the seller tries to change the conditions of the deal before the contract is signed, he will not be able to credit the value, and the money will be returned.
An overseas investor can also purchase real estate in Brazil without leaving his or her home country. With a power of attorney given to a lawyer or other trusted party, the procedure can be held without difficulty. To obtain a power of attorney in a country outside Brazil, there is a procedure involving a local notary public and the Brazilian consulate in the jurisdiction of the investor’s residence.
The representation of an attorney ensures the Brazilian property purchase process goes smoothly.
For more information on the legal aspects of buying real estate in Brazil, contact International Living’s recommended attorney in Brazil, Rui Farias.