Buying property in Brazil

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:

www.beachfrontbrazil.net

www.headlands.co.uk

www.propertybond.co.uk

www.propertyshowrooms.com

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.

Posted in Articles from 2007

Buying property in Brazil

Post a comment

Where next?