Buying property in Brazil is as safe and easy as in any European country. All property sales are titled and foreign investors receive the same investment and possession rights as Brazilians (with some restrictions for property or plots on beach areas).
Any foreign purchaser of property in Brazil has to apply for a CPF number. CPF stands for “Cadastro de Pessoa Fisica”, which, in rough terms, is the Brazilian version of the American Social Security. Only with this document will you be able to purchase real estate, open a bank account (visa restrictions apply), etc. That can be done by an attorney in Brazil or personally throughout the Brazilian Embassies and Consulates spread all around the world; but please be advised that the latter option usually takes a few months and that there are no guarantees for the issuance of the CPF, whereas the first option, usually takes 48hrs and is much safer.
Next, appoint reliable professionals to assist you. Make sure they are experienced, and most importantly, licensed real estate agents and attorneys. It is never recommended to purchase real estate, anywhere in the world, without the assistance of experienced professionals.
In Brazil the process of purchasing property involves innumerable searches and certificates (“certidões”) in various courthouses and registries (“cartórios”). To establish the authenticity of all the necessary documentation involved requires proper professional input if one is to safeguard one’s rights.
Special attention should be given to the purchase and sale contract. It must be executed in accordance with federal, state and municipal Laws and they do vary from one location to another. The contract then needs to be registered at the proper registry, in order to avoid multiple sales. Some crooked sellers may sell the property many times if the contract is not registered in the proper “cartório”, leaving the buyer(s) with a complex lawsuit on their hands. Also, there must be a clause in the contract for the registration, so please pay special attention to this, as Brazilian realtors often leave this out.
Transferring the requisite funds also needs to be done in compliance with money laundering regulations. For a transfer to be accepted and legal it must be done through “Banco Central do Brasil” and the parties must produce a properly executed and registered contract for purchase and sale with a clause mentioning such transfer pursuant to the “Banco Central” rules for real estate transactions. Please be aware that Brazilian Realtors and Brokers do not know these rules and clauses; please consult with your attorney and have it written in the contract.
This is also extremely important when it comes to the time you wish to sell your property, either to purchase another one or to take your money back to your home country. If your first transfer did not follow the rules, “Banco Central” will not allow you to transfer this money back to your country, as this could be considered a felony crime named “Evasao de Divisas” and the Brazilian IRS (“Receita Federal”) would, most likely, get involved as well and you, definitely, don’t want that to happen!
When purchasing real estate in Brazil the two most important things are; get professional assistance either from a licensed realtor or broker, and have an attorney do a thorough title search. You can also purchase title insurance. Homeowners, investors and lenders in the United States have been using title insurance for decades. No one would even think of entering into a major real estate transaction without it.
Caribbean and Latin American homeowners, investors, and lenders have historically relied on an opinion letter from an attorney as their safeguard against unforeseen problems stemming from a property purchase. When purchasing or providing financing for any property in Brazil, there is always the risk of related title defects. These defects could include survey errors, title flaws, fraud, forgery, undisclosed liens and encumbrances, or a host of other problems. Attorneys identify risks when researching title and its ownership, but you, the client, must decide whether or not to accept the risks of unforeseen circumstances. If by chance the attorney misses something or could not foresee a hidden defect, a buyer could face substantial losses or damages. Title insurance can insure against defects, thus eliminating any risk for a buyer.
Post purchase, homeowners still have legal obligations. Just like in any other part of the world, after the purchase the new buyer will be responsible for paying property taxes annually. In Brazil, however, they are quite cheap - generally 0.2% to 2% of the assessed value, not market value. Nonetheless, the new owner should make sure that it is paid every year to avoid legal action by the government. The property tax bills are usually sent at the beginning of each year.
For those properties with a homeowners association, the maintenance has to be paid promptly paid as well, as fines for lack of payment may be up to 20% plus interest on every month’s missed payment.