Investing in
Brazilian Real Estate
REAL ESTATE MARKET
OVERVIEW
According to recent
news published by
The New York Times, although
residential estate prices in Brazil have been
characterized by several years of double-digit
growth, Brazilian real estate prices will rise 5
percent by the end of 2009 as a consequence of the
slower economy (and the international financial
crisis), as per Günter Flemig, founder of “Homes in
Rio”, a German real estate company specialized in
vacation rentals and property sales in Rio de
Janeiro, Brazil.
President Lula’s
initiative aimed at addressing the country’s housing
shortage by increasing homeownership through the
construction of one million houses. This should have
a positive impact on house prices over the long run,
since it will strengthen Brazil’s middle class. It
should also be taken in account the recent discovery
of huge offshore oil reserves and the upcoming 2014
World Cup in Brazil, which can contribute to the
favorable development of the housing market.
BUYING BASICS
Alien citizens wishing
to purchase property in Brazil must obtain a tax
identification number (CPF), but otherwise there are
no restrictions. According to the NYT report,
transfer taxes and registration fees come to about 3
percent of the purchase price, paid to the
municipality. Notary fees cost
add an additional 2 percent. The seller pays
the negotiable real estate agent’s commission, which
is usually 6 percent for urban properties and up to
10 percent for rural properties.
Although residency
visas are not needed for property purchases, they
are a prerequisite for opening bank accounts. The
bank requirement became law in 2006 as a curb to
money laundering. Some foreign owners of rental
property who want to avoid the red tape of opening
bank accounts have come to rely on real estate
companies which also act as accounting firms and
hold funds for their clients. |
