Brazil – A buyer’s guide
When I think of Brazil the first thing that pops into my head is football. Not
a well known place for property investment, but I am always looking for the
next property hotspot and in 2007 I believe Brazil offers good prospects.
With the re-election of Luiz Inacio da Silva, the Brazilian president, things
look brighter for the Brazilian economy. Interest rates have dropped
from 26.5% to 14.5 % in 3 years. GDP growth looks set to rise from 1.9%, when
he took office, to 3.5%.
Brazil is also opening up a new airline route from London to Sao Paulo with
TAM Brazilian Airlines.
A quick country guide
Brazil is the fifth largest country in the world. A lot of Brazil is
scarcely populated although some previously unpopulated areas such as the Amazon
are slowly being settled.
Country name: República Federativa do Brasil
Population: 174,000,000
Main Language: Portuguese
Main religion: Roman Catholic
Currency: Real (R$)
Weather: Average temp is 25 (winter is from June to August,
summer is from December to February)
People: According to Lonely Planet ‘55% European descent,
38% mulatto, 6% African descent, and 1% other. (In reality, these figures are
skewed by whiteness being equated with social stature in Brazil.)’ There
is still a lot of crime in the urban areas of Brazil (where 80% of Brazilians
live) where there is a high level of violence and corruption. A lot of
the armed conflict is between the police and drug gangs. There is also
a gun culture in urban Brazil which is slowly being curbed with the introduction
of a disarmament statute in 2003, which makes it illegal to carry a weapon.
Buying property in Brazil
Buying in Brazil is not for the faint hearted, but can be very lucrative. There
is a process to buying in Brazil which is clearly defined. The following
steps will guide you through the process:
- You need a CPF (Cadastro das Pessoas Fisicas), a Brazilian ID
- To get a CPF you need to have your birth certificate translated into Portuguese
and legalized by the Brazilian Embassy in your country see www.brasil.org.uk
for the UK embassy instructions on CPFs - You will then go to the Banco de Brasil with your passport and Birth certificate
and formally apply for your CPF number, a fee is payable for this. - Within a few days you go the Receita Federal to receive your CPF number.
- The CPF card will then be mailed to a Brazilian address within a few months
- Many developers will process the application for the CPF for buyers
at a nominal charge. - All contracts are written in Portuguese and English with a written and
binding guarantee of full title. - A standard deposit will be 10% but this can vary between 5% and 25%. Stamp
duty of 5% is payable, as well as 4-5% of the purchase price for property
transfer fees. Buyers can also expect to pay between 1-2% of the purchase
price for legal fees. - At present, mortgages in Brazil available to international investors carry
interest rates of up to 35%, so raising finance in the UK is encouraged.
Where to find more information on properties in Brazil
The following websites might help you locate the property of your dreams in
Brazil:
Conclusion
Buying in Brazil can be very lucrative. It is definitely not for the faint
hearted, but when did the faint hearted ever buy property of any kind. With
the economic situation getting better all the time Brazil looks to be a good
prospect with house prices rising by about 20% per year and looks set to rise
even further.
Popularity: 28% [?]
January 1st, 2007 at 8:46 pm
House prices aren’t necessarily going up, it’s VERY area dependent. Some prices can remain static, and some can even go down.
March 1st, 2007 at 11:41 pm
Hi Rod, I´ve been thinking about buying a property in Brazil for a while too. I was put off by a Brazillian friend who told me that when you send money from the UK to Brazil it always goes through the central bank at which point the money is subject to a transfer tax. I telephoned the Bank of Brazil in London and they said yes there is a tax but didn´t know whether it was 1% or 10%! I don´t particularly want to go for a development and so would like to research areas myself and buy locally in Reais, rather than a UK property fair, to get a better deal but this has really put me off. I have a few Brazillian friends who spoke to estate agents in Brazil and they did know anything definative either. Can you give me any advice about this? I would really appreciate it. Thank you. Jan
March 5th, 2007 at 9:27 pm
Hi Jan,
I understand the question but I don’t know the answer to this one either. If you are going to go to Brazil yourself to research property then you will certainly get the answer locally. What I will say is that more investors are buying in Brazil, including those from the USA, and that wouldn’t be happening if any tax was so onerous that it changed the investment fundamentals!
March 12th, 2007 at 8:13 pm
What do you think of beachfrontbrazil.net then?
Do you any who have bought of them and their experiences?
May 1st, 2007 at 2:43 pm
hi Rod i have people waiting to buy land from me in Brazil through beach front Brazil what i have read has just scared the life out of me i am talking giving them serious money any one out there had a problem with this company
May 2nd, 2007 at 11:04 pm
Hi there,
I thought I’d leap in to the discussion. There are two groups of Brazilian Property agents, those that can be trusted as those that can’t. Unfortunatley the big boys, are often the latter.
If you would like assistance buying property in Rio de Janeiro, I can assist as a buyers agent. See my blog for details.
Many thanks
Robert
May 9th, 2007 at 5:25 pm
hi , is it possible to co-own a property with a brazilian friend , how can this be done ?
thankyou for your help
louise
August 28th, 2007 at 7:13 pm
hi all, this is just a note to say i have recently purchased a situ in bahia,no problems whatsoever using a small company there,you do need to set extra money aside though for the taxes and everything else,about £3.000.Try immobras .com. chantal speaks english and they took the wife and i round the properties.If you would like to know anything specific let me know and i will do my best to help as believe me there is nothing like chilling in your own pool.
September 12th, 2007 at 1:38 pm
I was in Brazil last year and realized that there are countless reasons to buy a property in Brazil: with over 7000 kilometers of beautiful coastline, the country is South America’s leading economic power and continues to pursue industrial and agricultural growth that is creating a steady increase in the standard of living throughout Brazil. Investment property in the country couldn’t be more attractive right now. And just now I’m going to go to Brazil again and choose good property.
September 15th, 2007 at 4:36 pm
We just got back from a 3 week trip to brazil touring all the new developments in Brazil. I have been there quite a few times before and I keep forgetting how beautiful and fun Brazil is.
There is definitely a buzz in the air in the North East of Brazil and some of the developments there are amazing and remarkably good value.
September 15th, 2007 at 4:47 pm
Sorry, I should have said we toured all the major developments around Natal and some in Salvador (All of Brazil in 3 weeks would have been impossible!).
Also I forgot to mention if anyone is looking for news on the Brazil property market please go to the uv10 site at http://www.uv10.com and you will see the latest stories on the front page.
October 2nd, 2007 at 8:37 am
If anyone is looking to purchase a property in Brazil please contact us, we have an English speaking team our website is http://www.aplaceinbrazil.co.uk
October 10th, 2007 at 10:03 am
If you are looking for off plan appartments in Natal have a look at Ponta Brasil Beach Resort. Or if you want something very special, we can build you a bespoke dream house exactly the way you want it. Find out more at http://www.brazilpropertyinvestment.net
December 28th, 2007 at 7:21 pm
I am British. I agreed to buy a property in Bahia from a very large construction company and signed the contract presented to me and agreed to send two hundrend thousand reais as a first payment on the apartment. The total cost will be approximately five hundred thousand reais if I send all the money at an early stage of development which will be completed in three years; but it will cost more if I pay over three years.
I bought through a reputable agent in Salvador Bahia. I was sent the bank account details by the agent and duly sent fifty thousand pounds in British pounds. My bank in the UK has been informed by Banco Itau that they received the money weeks ago but it has not been signed for. Since that time the exchange rate has deteriorated from 3.8 to 3.5 reais – 1 GBP 10% less favourable. The Bank of Brazil tell me, as the result of their procedures they would change the money when it arrived, but they say different banks have different procedures. In your opinion should or would the bank have changed the money on the day of arrival or will they only change it when it is signed for. This problem may cost me nineteen thousand reais and I am very anxious about it. Do I have legal rights in this respect. I imagine I’m not the only person who might have this problem.
January 28th, 2008 at 12:15 pm
Properties and construction in Brazil. Look website http://www.dmbrazil.com
March 14th, 2008 at 10:49 am
As interesting as buying property in Brazil is, I think it might be rather difficult if you don’t know anyone who could help you with that. You just need someone who you can trust and is familiar with the habits in Brazil.
May 21st, 2008 at 1:05 pm
great post