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Is Purchasing Property Straightforward in Brazil?

Unlike some emerging markets for property investment, Brazil has a straightforward buying process. To help the investor understand the procedure, Obelisk offers the following guide to completing your Brazil property investment.

Firstly and perhaps most importantly for the foreigner planning investment in Brazilian real estate, there are almost no restrictions on the purchase of property by foreigners in Brazil. Foreigners are only prohibited from buying land subject to national or security interests. Foreigners - resident or non-resident - enjoy practically the same rights as Brazilians when it comes to buying and letting property. In addition, legislation in Brazil regarding property purchase is well-established and not subject to frequent modifications as is the case in some emerging markets such as China.

Your first step - as in all overseas property investment - should be to take independent legal advice to ensure your interests are represented at all times. Your lawyer will explain the procedure behind buying a property in Brazil and keep you informed throughout the process.

All buyers of property in Brazil (foreigners and Brazilian nationals) require a tax identification number. Called the cadastro de pessoa física (CPF), this number identifies you before the Brazilian tax authorities. Most foreigners request their lawyer to obtain the CPF on their behalf. The CPF is obtainable from tax offices, most post offices and Citizen Services Centres (Poupatempos) in Brazil and the application process is straightforward and quick. You need to provide proof of identity (e.g. your passport) and domicile (e.g. a utility bill).

The due diligence process is slightly different if you are buying a resale property or new (off-plan) property. For resale properties, your lawyer should obtain a document known as Certidão de Onus Reais. This document includes the entire history of ownership of the property and is obtainable from the Land Property Registry (Cartório). Your lawyer should also obtain the Land Tax Certificate (Certidão Negativa de Imposto Municipal), which states any pending debts on the property. If you are making an off-plan investment in Brazil, your lawyer should check that the development has all the pertinent licences in place.

A sales contract is drawn up between both parties and a deposit paid. The final sales deed completion on resale properties usually takes place a month later. The deed signing for off-plan purchases happens once construction is complete. Deeds are signed before a notary public and then registered at the Land Registry in the new owner's name. Fees based on a sliding scale and the purchase price are payable to the notary and Land Registry.

All transfers of funds for property investment in Brazil must be made through the Central Bank. Records of all transfers are kept at the Central Bank, which act as financial proof of the investment.

Unlike some emerging markets, Brazil has a transparent and straightforward purchase process. The registration procedure is secure and well-developed - online consultations are available in most towns and cities. The process is easy and relatively quick.

In spite of distance and language barriers, foreigners will find the steps to buying a property in Brazil relatively easy. At Obelisk, we see many similarities to the procedures in established property markets such Spain and France. But Brazil offers an added bonus - along with a straightforward investment process comes some of the best value luxury property anywhere.

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