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Mortgages
Real Estate Financing in Mexico,
Latin America and the Caribbean
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Buying Real Estate in Brazil
Legalities and OwnershipIn order to purchase real estate in Brazil,
foreigners need to obtain a Tax Identification Number, known as CPF
(Cadastro de Pessoa Fisica) in Brazil. CPF is issued by the Brazilian
Federal Revenue Agency (Receita Federal do Brasil). To get a CPF you
need your birth certificate that must be translated into Portuguese by a
certified translator and legalized by the Brazilian consulate in your country of
residence. The CPF number can be assigned to you the very next day. It will take
about 2 months, however, for your CPF card to be mailed to your local address in
Brazil that indicated in the form. You must have a Brazilian address as they
will not mail CPF cards internationally.
You can download the form and
submit it along with your birth certificate and a nominal fee to the Receita Federal do Brasil.
For the purpose of
identification, a Brazilian ID is not needed, a passport is sufficient.
In Brazil, every piece of real estate must be registered in the
respective Real Estate Public Notary whose files contain the history and legal
information pertaining to a property including the exact dimensions, current and
past owners, mortgages and liens. A person is only legally eligible to sell his
or her own property so the seller’s name must be the one registered with the
notary as the owner of that property.
Most transactions are assisted by
real estate agencies, known as imobiliárias, in Brazil. All commissions are paid
by the seller as is commonplace throughout Latin America.
You should
hire the services of a reliable broker to prepare your contract, which contains
all details regarding the real estate, method of payment, etc. Usually a down
payment equivalent to about $3,500 USD is required at the time of the signing of
the contract.
You can make final payment at one time in cash, or in
installments. Paying in installments may prove costly, however, due to high
interest rates on installment payments, which can run as high as 35%. If you
need to transfer funds from abroad, you are liable to pay a 1% "import" tax on
all transferred funds, known as “imposto de importação” in Portuguese.
When you become owner of a property in Brazil, your name must be
registered on the notary as an owner of that property. An amount equal to 4 to 5
percent of the purchase price is charged in order to transfer the title
ownership to your name.
Financial MattersAn annual property tax must be paid every year and is
around 0.6% of the value of the property.
Another tax that you may have
to pay is called "taxa de terrenos de marinha". It is applicable only
to specific areas in Brazil, usually the areas bordering the sea and the rivers
and it is quite hefty at 5% of the value of the real estate. Apart from these
taxes, there are fees to be paid to the Notary which amount to an additional 2
or 3 percent payable by the buyer.
Lawyers’ fees are also needed for
checking certificates and registers. Lawyers make sure that there are no debts
owed on the property and advise you on obligations and registration process.
This cost varies between 0.2 to 2 percent of the property value, depending on
the type of property.
All transactions are conducted in Reais, the
Brazilian currency.
Mortgages financing in Brazil is rare because of
high interest rates, which can climb as high as 30% - some of the highest
interest rates in the world. Large, demonstrable cash assets together with a 30
to 50 percent down payment are required to qualify for a loan. As a result, most
properties are paid for in cash without the aid of mortgage loans.
It is
now possible to obtain mortgages for Brazilian property through international
mortgage brokers to a limited degree.
Other Important IssuesYou are required to hire a caretaker when you are
not in Brazil.
If purchasing an apartment or condominium, you will need
to pay some condominium charges as well. These charges will take care of regular
upkeep, maintenance and security.
You will require a passport with
minimum validity of six months and a visa to stay in Brazil. Visas are valid for
multiple entries within 5 years for a period that the consular officer will
determine. You can stay up to 90 days with these valid documents, which can be
extended for the same length of stay by the Brazilian Federal Police. It is
necessary that within 90 days of visa your issuance, you must make your first
travel to Brazil.
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