It is easy to understand why so many foreigners are attracted to Brazil as a holiday and business location. South America's largest country offers diverse landscape and culture, with vibrant cities and pristine wilderness, for those who seek relaxation or adventure and plentiful business opportunities for investors. As Brazil becomes more stable politically and opens up to the world, an increasing number of foreigners see buying land, apartments or houses as a great way to settle down or invest there. This is a short guide on how to buy property in Brazil.
You do not need to have any special legal status to buy most types of property (eg. an apartment) in Brazil. However, there are several categories that require the buyer to have a foreign resident status (eg. agricultural land) or involve payment of extra fees.
Foreign companies need permission from the Ministry of Agriculture, Livestock and Supply to purchase rural land. They can do it only if they intend to use it for agricultural production of livestock-raising and these activities are compatible with their business status.
In 2010, the Brazilian government introduced some restrictions on acquisition of real estate after a surge in interest from sovereign wealth funds and aggressive speculators. They are meant to protect areas that are deemed sensitive for the country's security. This means that foreign (and foreign-owned) individuals and companies are not allowed to purchase:
property located within 150 km of Brazil's borders,
property directly on the coast,
rural land that exceeds 25% of the municipality territory,
any other real estate that is critical for the country's security
According to the World Bank's report, it takes an average 42 days to register real estate in Brazil, which is a faster process that what is standard in the rest of Latin America and the Caribbean, but below OECD average.
Costs vary from state to state (Brazil is a federation). Two standard taxes apply (stamp duty and property transfer), but other duties may come into play in select locations.
Access to information about property is open and registries tend to be clean and well-organized. This is why many locals carry out the transactions without involving a lawyer, but it is not recommended for foreigners, especially if they are taking their first steps in the market and do not have experience doing business in South America.
The local mortgage market has yet to reach maturity. For now, it is expensive and time-consuming to obtain financing from a local bank. Also, you need to be mindful of currency risks connected with denominating your debt in the real.