By Nicholas Storey, Contributing Reporter

Brazilian investment opportunities run from beach properties to historical purchases in towns such as Ouro Preto, in Minas Gerais, photo by Brazilian Ministry of Tourism.
Brazilian investment opportunities run from beach properties to historical purchases in towns such as Ouro Preto, in Minas Gerais, photo by Brazilian Ministry of Tourism.

RIO DE JANEIRO – All land purchased in Brazil is subject to a tax known as ‘Imposto sobre a Transmissão de bens Imóveis Inter-vivos’, ITBI, (title transfer tax on goods and real estate) which is equivalent to two percent of the value of the purchase. In addition, in relation to some oceanfront properties, there is another tax called laudemeo (marine tax), which is five percent of the land value (disregarding the value of the buildings), according to a statutory valuation.

There is additionally an annual local tax levied by the Prefeitura, as in many places, for the provision of local services, such as garbage collection, roads, schools, medical centers, hospitals.

The annual tax depends on the size of the house and varies but is generally not a great deal of money. If you sell the house, there is, for residents, a capital gains tax of fifteen percent, which, however, does not bite on the money if it is re-invested. Personal income tax in Brazil (which applies on worldwide income if you are resident in Brazil) is graduated up to a maximum of twenty-five percent.

There are import duties which range between 0-22.5 percent on certain goods (higher rates apply to such things as automobiles), although there is no duty on importing household goods from storage, provided that you have a right to bring things into the country as a permanent resident. It should be mentioned that you must bring the goods into the country not less than three months and not more than six months after obtaining your visa.

What may or may not be brought into the country is dealt with by any good relocation firm. Shipping by air is not a good idea as shipping anything in this way, except medical supplies for own consumption attracts a tariff of sixty percent on the FOB value (free on board value, or value of goods excluding carriage, freight and insurance) ranging between US$51 and US$3,000.

Personal importation of cigarettes and alcohol is banned. Personal goods, comprising passenger baggage, are exempt from tax. However, the above is subject to the exception that, provided there is permission from the Brazilian Consulate in the country of origin, persons transferring residency to Brazil are exempt from import duties.

Natal Beach in Rio Grande do Norte, photo by Embratur.
Natal Beach in Rio Grande do Norte, photo by Embratur.

When you are buying property in Brazil there are two main problems to note. First, there are estate agents advertising properties on the internet and they often seek to charge the buyer a commission of up to five percent, whereas when buying through a Brazilian agent in Brazil it is only the vendor who pays the commission.

Second, never use an advogado (lawyer) unless they have been personally recommended to you by someone that you know and trust. It is worth noting that I know of at least one property that was advertised for sale fraudulently and unsuspecting foreigners transferred funds to Brazil and the ‘vendor’ run off, leaving no trace and no property or title.

SHARE
Previous article48 Hours in Valparaíso, Chile
Next articlePet Shop Boys at Citibank Hall

Through the years we have had over a hundred freelance reporters and contributors writing for us, and we thank them all for their work.

6 COMMENTS

  1. I think this does a very good job of summing things up!

    Brazil Real Estate is a GREAT INVESTMENT for foreigners!!!!!

    I have been investing in beachfront real estate in Marica, Rio de Janeiro, Brazil for 6 years now… My oceanfront real estate has doubled in value every three years….

    with the olympics, world cup, solid brazil economy, i am confident that beachfront property in my area will continue to double in value every three years for the next 9 years….

    If anyone needs assistance finding a beatiful beachfront property, please contact me!

  2. I have been living in Brasil for over one year and the real estate is depreciating at a rate between 20-35% in the northeastern part of the country. In Sao Paulo real estate has depreciated 20-36.7% for the past two years. Have Brasilian real estate agents that have tried to sell their properties in Sao Paulo and Rio and both have lost substantial from their original asking prices. Their original prices were not too high to begin with. Ocean front properties depending on locale, are at least maintaing some value but not as much as 2004-2005 values. Overbuilt in coastal communities from Florianopolis to Fortaleza are well noticed as the European’s are not investing due to economical turndown to just not wanting to invest at this time. Even US investors have not invested heavily into real estate in Brasil for the past 3 years. Sources are available.

  3. Hi Ron,
    I was wondering if you had any information or sources about the depreciation of property in Brasil?
    I lived in Rio for 16 months and definatly saw the price of property there generaly increase.
    I always think you have to be cautious when beliving statistics being put out by the Brasilian government and I would welcome a chance to see some alternative sources.

    Thanks
    Tom

  4. Hi, I am trying to buy property here and have been told that I might be subject to a tax of 20 per cent of the value of my investment – anybody know anything about this and, crucially, how I might be able to avoid it?? Any tips much appreciated!

  5. My wife is brazilian and owns a home in gioana and we need to sell any suggestions. We live in states and need help selling.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

5 + eleven =