News & Knowledge > F.A.Q.

General Investment Questions

• Why should I invest in Brazil?
• I am considering investing in Brazilian property, but is it the best overseas investment for me?
• As an overseas buyer, what are the restrictions for buying property in Brazil?
• Will I be able to buy property with other individuals?
• What about buying ‘off-plan’?
• What are the benefits of buying off-plan?
• Does Brazil have a governing body for estate agents?
• How is an offer made in Brazil when I want to buy a property?
• Do I need a Lawyer when buying a property in Brazil?
• What are the associated costs with my property purchase in Brazil?
• What ongoing costs can I expect once I have purchased my property in Brazil?
• How is the property registered into my name in Brazil?
• How do I send the money to Brazil to pay for my property?
• Are mortgages available in Brazil?
• Once I have bought my property in Brazil, can I expect good rental returns?
• Who will take care of my property while I am out of the country?
• What is a CPF number?
• Do I need a travel visa if I decide to visit Brazil?
• Is it easy for me to apply for a residency visa so that I can live in Brazil permanently?

1 - Why should I invest in Brazil?

Over the last 5 years, Brazil – and especially the Northeast coast – has seen an impressive return on foreign investment properties. In the particular area of the Northeast, the government has invested an enormous amount of money in the development of the area over the next several years, offering more amenities to residents and investors alike – in turn, kick-starting a rapid increase in market value of properties. As an example, Brazil has seen stable increases on property prices of up to 25% per annum in some areas for a sustained period.

2 - I am considering investing in Brazilian property, but is it the best overseas investment for me?

As a previously undiscovered market, Brazil is viewed by many property experts as a hidden gem. More and more people are looking at property in Brazil as a high-growth investment or as a potential second home. Property is comparatively inexpensive and in a setting more beautiful and culturally-rich than you could possibly imagine. The Northeast corner of Brazil in particular is crammed with thousands of outstanding property opportunities and Atlantic Trust continues to source a wide array of different properties to meet and exceed the expectations of a growing number of interested investors, both individual and institutional.

3 - As an overseas buyer, what are the restrictions for buying property in Brazil?

There are no major restrictions for foreign buyers wishing to invest in Brazilian property. Foreign individuals or foreign-owned companies can acquire property in Brazil and they enjoy exactly the same conditions applied to Brazilian individuals or companies. President Lula’s policy of “high priority sustainable development” allows foreigners to own 100% freehold on property.

4 - Will I be able to buy property with other individuals?

Yes, up to 10 individual names can appear on a title deed following a property purchase.

5 - What about buying ‘off-plan’?

Buying “off-plan” means purchasing a property at the planning stage, either before it is built or during the time of construction. Buying off-plan is an increasingly popular process that will generally deliver good returns on your overseas investment, because you have fixed a price at an early stage. Certain off-plan developers will also allow the buyer to have an input into the final configuration of the property, whether that be on the general finish of the property or on the internal design.

6 - What are the benefits of buying off-plan?

Property sold off-plan is generally bought for a substantially lower price when compared to the post-construction price. This means that off-plan buyers can enjoy a healthy and rapid return on their initial overseas investment.

7 - Does Brazil have a governing body for estate agents?

Yes, Brazil's estate agents are monitored carefully by a governing body known as CRECI, which stands for 'Conselho Regional de Corretores de Imóveis'. Each qualified agent or business will be registered with CRECI and will be assigned a unique number which is lodged at the company’s office. Atlantic Trust is a CRECI-registered Estate Agent in João Pessoa.

8 - How is an offer made in Brazil when I want to buy a property?

When you have decided upon a property in Brazil, a verbal offer will need to be made through the agent and often some negotiations will follow. At this stage, a lawyer should be appointed by the purchaser to confirm the final purchase price and to oversee the buying process. With off-plan purchases, however, the price is often fixed and dependent upon the current phase of construction.

Legal Aspects and Finances

9 - Do I need a Lawyer when buying a property in Brazil?

Whilst the services of a legal professional are not mandatory, Atlantic Trust recommends that you do as we do, which is everything by the book! Therefore, we are happy to recommend local and national lawyers whom we know to be trustworthy. Alternatively, you can visit the news and knowledge centre on our site and download the recommended lawyers list of the Brazilian Consulate in London.

Either way, our advice is to retain a lawyer to guide you through the legal aspects of your purchase. As a general rule of thumb, a lawyer will charge between 3% and 5% of the property purchase price, depending upon the size and complexity of the deal.

Your lawyer will:

• Check the current owners have the correct title to the property
• Check for any charges and liabilities still owed on the property
• Check the owners financial status/credibility
• Check your contract and advise you on the obligations for both parties
• Provide a translation of the contract into your native language
• Help you through the payment/funds transfer
• Ensure the property is registered in your name

10 - What are the associated costs with my property purchase in Brazil?

Transaction costs, including stamp duty, fees etc. can average at between 5% and 8% of the purchase price. These costs may differ according to location, type of property and the state you buy in. If it takes a significant amount of work to establish title and ownership, the costs could be slightly higher.

Breakdown:

• A down-payment for your chosen property of approximately 10% of the purchase price is requested.
• Property transfer/registration fees average about 5% of the purchase price, but this can vary depending on the type of property that you buy, and also the state in which you buy.
• Payment can often be made all at once or in installments of 12, 24, 36, 48, or even up to 84 months when buying off-plan, however buyers should note that interest rates are very high and generally not fixed. If you opt to pay in installments, please bear in mind there is also a currency risk: if the value of the Brazilian Real goes up, your property becomes more expensive, and vice versa.
• Payment for private purchases are usually made all at once, although short-term payment agreements of up to 3 months can be made.
• There may be a 1% import tax charged by the bank on the transfer of funds from abroad.

11 - What ongoing costs can I expect once I have purchased my property in Brazil?

This depends on what specific property you buy in Brazil, but as a guideline, ongoing council taxes can amount to approximately 1% of the property value. Condominium payments for apartments vary depending on the type of building, but average between R$200 and R$750 per month.

12 - How is the property registered into my name in Brazil?

The property registry system in Brazil is well developed and safe. The registration itself is carried out by private notary publics. All property is registered at one single registry, which records details of the entire commercial history and the physical identification of each property. It is obviously very important to ensure that any property you buy has a clear title. Access to registry information is available to the public and includes relevant details on ownership, mortgages and other pending debts. In the larger cities, these services may be automated. Atlantic Trust can carry out all searches on title deed, ownership and outstanding taxes on your behalf.

13 - How do I send the money to Brazil to pay for my property?

Funds are sent directly from your own bank account to the seller’s bank account in Brazil, via the Central Bank of Brazil. The bank records your funds entering into the country and in order to release the funds, the seller must present the contract to the bank. We always recommend you use this recognised route of investment, or you may have problems transferring funds out of Brazil when you sell your property in the future.

There are generally no limitations in returning funds from Brazil provided they were originally registered with the Central Bank at the time of purchase.

14 - Are mortgages available in Brazil?

The mortgage market is underdeveloped in Brazil and as yet foreigners cannot obtain a mortgage in Brazil. Buyers usually arrange alternative financing in their own countries. In 2005, about 50,000 mortgages were granted to Brazilian nationals but at high interest rates. However, we expect mortgages to become available in the foreseeable future as interest rates drop and as banks continue to develop their portfolio of products.

Some constructors of new build and off-plan developments offer installment plans covering periods of 12 to 84 months. The charges applicable vary according to constructor and repayments are usually index linked.

After Your Purchase

15 - Once I have bought my property in Brazil, can I expect good rental returns?

Although in some parts of Brazil the rental market is still emerging, there is great potential for excellent rental returns in the Northeast of Brazil due to the fantastic year-round climate and the growth of tourism.

16 - Who will take care of my property while I am out of the country?

We offer full management services, including renting your property, arranging cleaning services and paying your bills.

Coming to Brazil

17 - What is a CPF number?

A CPF is a national Brazilian ID number, which you will need in order to buy property. To get a CPF in your home country, you will need to bring or send proof of identity and nationality to the Brazilian Consulate – i.e. a birth certificate. (In England, there is a consulate in London). After they are authenticated by the consulate, official copies will be sent to Brazil and originals will be returned to you. Upon request, we will be happy to send you detailed directions for obtaining your CPF.

Alternatively, if you are visiting Brazil and intend to buy a property, you should bring your birth certificate with you and marriage certificate, if applicable. Your CPF number can then be easily obtained during your visit. We will also be happy to help you with this quick and efficient process.

18 - Do I need a travel visa if I decide to visit Brazil?

Most travellers visiting Brazil will receive a 90 day tourist visa on entering the country. Please note that European Union or USA citizens do need to go to the Brazilian Consulate first to acquire a visa. You can apply for an additional 90 days on your tourist visa while in Brazil at the Federal Police station if you wish.

19 - Is it easy for me to apply for a residency visa so that I can live in Brazil permanently?

You are able to apply for a permanent residence, although like most countries, Brazil expects you to meet certain criteria. Generally a permanent visa can be obtained by making an investment of US$50,000 in Brazil. You can obtain more details from the Brazilian Embassy in your own country of residence. Atlantic Trust also works with a Brazilian immigration specialist who routinely carries out visa processes on behalf of many of our overseas clients who wish to make their stay permanent.

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