PROPERTY ACQUISITION

Non-residents (individuals or entities) may acquire real estate property in Brazil under the same conditions & procedures as applied to Brazilian nationals.

In respect of real estate properties, Brazilian law provides two broad categories– the right of possession and the right of ownership.

Right of possession – a personal right to exercise certain powers of ownership such as the right to claim, maintain or recover the possession of property, the right to receive its fruits (including rents and other income generated from the property), the right to be indemnified for necessary improvements carried out, and the right to retain the object.

Right of ownership – the most important of all property rights and is exclusive. Such right is defined by the Brazilian Civil Code as the right of an individual to use, enjoy and dispose of his goods, and to recover them from whoever may have taken possession of them unlawfully. The ownership may be shared by more than one person, as know as the co-ownership or condominium, which is when each of the co-owners of an asset has all the property rights in relation to an ideal part of such asset. The right of ownership may be restricted by public interest or in respect for the property rights of third parties.

The buying procedure for a property (including off-plan) is in general as follows:

Reserve the property
Once you have chosen your ideal property, a reservation agreement is to be signed with the seller and a reservation deposit needs to be paid (will form part of the purchase price).

Due Diligence
Before signing the preliminary purchase contract (off-plan property) or property sale and purchase contract, it is important that to carry out a due diligence check on the seller as well as the subject property. The due diligence checklist may include:

• the company registration certificate (if the seller is an entity) or proof of seller's identity (if the seller is a private individual)
• proof of a personal who is duly authorised to sign all legal documents (if the seller is an entity or an attorney of the seller)
• the title certificate for the land
• the planning permission/consent (off-plan property)
• the building licence (off-plan property)
• the administration certificate
• all other relevant permissions for the commencement of the project (off-plan property)
• any lien, debt, development finance, or encumbrances against the land and/or the project
• at least one of bank guarantee, insurance and/or assurance ensure the completion of the project or an escrow system to provide security for the buyer's property payments (off-plan property)
• an independent quantity surveying (QS) system during the construction period (off-plan property).

The above due diligence check is more appropriate to be done through a local law firm or conveyancing lawyer.

Cadastro de Pessoa Física (CPF, i.e. Tax Code)
This is a fiscal number must be obtained if you have dealings within Brazil (even if you are not a permanent or tax resident). This number is a legal requirement for all foreigners purchasing property as it enables the foreign investor to be uniquely identified for taxation and title purposes.

Exchange Contract
Before singing preliminary purchase contract (off-plan property) or property sale and purchase contract, buyers are suggested to consult a local law firm or conveyancing lawyer on analyse the risk, any unfavourable terms of the contract. Upon signing of the contract, first instalment/payment is often required.

Signing the Title Deed
The property transaction is finalised with the buyer and seller signing the Deed of Sale before a Notary (OfÍcio de Notas o Cartorio). The Notary's duty consists of identifying the buyer and the seller, and ensuring that all legal requirements have been met, and that the amount due to be paid has been settled.

TAXATION When buying/acquiring property

Taxation when owning/holding a property

Taxation when selling/disposing property