Saturday, June 16, 2007

Buying Real Estate in Brazil

BRAZIL is the fifth largest country in the world with 4,500 miles of coastline, the Amazon River, the Atlantic Rainforest, the Panantal Bird Reserve, the preserved mining towns of Minas Gerais, 4,000-foot mountain peaks, a European-populated southern coast, South America's largest city and its financial engine - Sao Paulo, and one of the world's most enchanting cities - Rio de Janeiro. Add a large dash of friendly Brazilians and a cost of living that is one-fifth that of the United States and what is there not to like? If you can't find it in Brazil, you're probably not going to find it anywhere.

But can foreigners legally purchase property in Brazil? After all, some of the world's most desirable countries don't allow foreigners to purchase land or houses. (Thailand and Bali come to mind.) The answer is yes. In Brazil foreigners have the same legal footing as Brazilians when it comes to buying property.

1. You need a Brazilian ID called a CPF.
2.To get a CPF you need a birth certificate translated into Portuguese by a certified translator and legalized by the Brazilian consulate in your home country.
3. You make a trip to Banco Do Brasil with your passport and your birth certificate to formally apply for a CPF and pay a small fee.
4. The next day you go to the Receita Federal to receive your assigned CPF number.
5. Your CPF card is mailed to an address in Brazil within two months. (That's right, you need a Brazilian address.)
6. It’s best to use a trustworthy broker. Not only will the a good broker help you find a property, but he or she will make sure the price is fair, as well as make certain that the property is owned by the seller, and that there are no debts on it.
7. The contract is prepared by the selling broker and contains:
- All information of the seller
- All information of the buyer
- Location and specifications of the real estate
- The conditions of payment(s)
8. The contract is signed at the office of the broker.
9. You pay a down payment (usually about 10,000 Reais or $3,500 usd).

10. When payment has been made, your broker will arrange the registration of the property into your name via a cartorio (similar to a notary).
10. The cost for the property transfer is approximately 4%-5% of the purchase price.
11. Payment can be made all at once or in installments of 12, 24, 36 or 48 months, but interest rates can be as high as 35%. If you opt to pay in installments, there is also a currency risk. In other words, if the value of the Brazilian Real goes down, your real estate becomes cheaper, and vice versa.
12. There is a 1% "import" tax on transfer of funds from abroad. For alternatives, check out the websites and
13. After registration, you are the legal owner.
14. There is an annual property tax of approximately 0.6% per year of the assessed value.
15. You will need to hire a caretaker to live on the property when you are not there.
16. Visas: Foreigners are allowed 3 month visas, or 180 days total per year in Brazil. If you want to apply for a permanent visa, one of the following conditions must be met:
- You are married to a Brazilian.
- You have a child with a Brazilian.
- You invest 250.000 US dollar or Euro in Brazil.
- You have reached the age of retirement (50 years) with a pension of at least 2,000 euro or US dollar per month.

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