What are the closing costs when buying a property in Brazil?
I have given a broad outline of the practical steps needed to purchase a house or landplot in Brazil in the following blog series;http://brazilbeachhouse-wwwbrazbeachhousecom.blogspot.com/2011/07/information-onbrazilian-property-market.html
Yes you say,but what`s the bottom line?How much will it cost to close the deal and transfer my new brazilian property into my name?
Many brazilian buyers in North-East Brazil have traditionally chosen not to go down the route of transferring property publicly in order to avoid paying the accompanying fees and perhaps evade the attention of the tax authorities when declaring assets.
This is the cheaper and easier way to finalize a sale but does not provide legal security in the event of a property dispute.So in order to obtain 100% ownership rights to your new home you will need to pay the following taxes;
1)Municipal tax(ITIV)3% of property value on sale.As I mentioned on the post http://brazilbeachhouse-wwwbrazbeachhousecom.blogspot.com/2011/07/how-to-buy-property-in-braziltransfer.html
An official from the prefecture will make a visit to the property and give an evaluation.Taxes are then calculated on this estimated value(not on the actual price you are the buying the property for)
The prefecture will emit a tax bill which can be paid at the national bank(Banco do Brasil)
2)Notary fees(3%) based on the evaluation of the prefecture.This can be paid directly to the notary office at the time the deed is made and signed.The 3% includes registration of the deed at the local notary.This alone will ensure that you are legally recognized as the new owner.
In the case of buying beachfront property in Brazil....
Another tax will be levied by the marine department at the time of purchase and amounts to 5% of property value.More on this plus annual property tax and utility fees in my next post...
Thursday 21 July 2011
Saturday 16 July 2011
How to buy property in Brazil;Transfer of deeds on Brazilian realestate.
Another busy week for me in the Brazilian property market here in Natal.We have had clients come over from Holland,Luxembourg,the U.K,Canary islands and Sweden these past 2 weeks and are very near to closing 4 beachfront sales.The rush is on to finalize the payments and ensure that the paperwork is all in order for title transfer.This brings me to the final stage of the purchasing process.....
In the Intro 1 and 2,I explained the initial steps for buying a property in Brazil with standard purchasing agreement and payment of deposit to the sellers account....
1rst step accomplished and you are now well on your way to completing the process!
Next comes the due diligence on the property and payment of transfer taxes.
Your real estate agent or property lawyer will be required to gather the necessary tax,civil,judicial declarations on behalf of the seller (and spouse if married)to submit to the notary office in preparation for the deed.
The seller must ensure that the property is lien free with all property tax paid in full,and that they have a clean bill of health with local,federal tax authorities.The declarations emitted on-line will come up either positive or negative depending on the sellers situation.If negative,the seller will need to resolve the respective problem before he/she can sell the property.
This stringent check on both property and person ensures maximum safety for the buyer as the deed cannot be prepared without full clearance.
The agent/lawyer will also run a check on the property at the local notary office to establish the chain of ownership and confirm registration.
When all the documentation is fully checked out the buyer will need to pay the municipal transfer tax which is 3%of property value.This value is increasingly based on an evaluation of the prefecture at the time of sale and not the sales price.
An official from the prefecture may come out to visit the property to make the evaluation or it maybe calculated on a standard value per m2
When this tax is paid and the receipt submitted to the notary office,the deed can be prepared in one or 2 days.
Final payment can be made at this time to the sellers account.Do not forget to transfer the balance from your personal account if you are buying in your name!Very important!!
You can get a copy of the bank transfer to show the seller as proof of payment.Once the transfer has arrived in the sellers account,you will be called into the notary along with the seller to sign the deed.Now it`s time to savor the moment and celebrate as you have just landed the purchase and have the deeds in your hands!
Don`t take them home just yet though....once signed,they need to be registered in the notary,stamped and written into the ledger.This will take a day or 2 so you need to go back one last time,pay the fees(3%)and pick up your property on paper,fully titled,legalized and registered in your name,Congratulations!
My next blog will cover some of the issues that pop up during the course of purchase.
I`m off to the beach now!
In the Intro 1 and 2,I explained the initial steps for buying a property in Brazil with standard purchasing agreement and payment of deposit to the sellers account....
1rst step accomplished and you are now well on your way to completing the process!
Next comes the due diligence on the property and payment of transfer taxes.
Your real estate agent or property lawyer will be required to gather the necessary tax,civil,judicial declarations on behalf of the seller (and spouse if married)to submit to the notary office in preparation for the deed.
The seller must ensure that the property is lien free with all property tax paid in full,and that they have a clean bill of health with local,federal tax authorities.The declarations emitted on-line will come up either positive or negative depending on the sellers situation.If negative,the seller will need to resolve the respective problem before he/she can sell the property.
This stringent check on both property and person ensures maximum safety for the buyer as the deed cannot be prepared without full clearance.
The agent/lawyer will also run a check on the property at the local notary office to establish the chain of ownership and confirm registration.
When all the documentation is fully checked out the buyer will need to pay the municipal transfer tax which is 3%of property value.This value is increasingly based on an evaluation of the prefecture at the time of sale and not the sales price.
An official from the prefecture may come out to visit the property to make the evaluation or it maybe calculated on a standard value per m2
When this tax is paid and the receipt submitted to the notary office,the deed can be prepared in one or 2 days.
Final payment can be made at this time to the sellers account.Do not forget to transfer the balance from your personal account if you are buying in your name!Very important!!
You can get a copy of the bank transfer to show the seller as proof of payment.Once the transfer has arrived in the sellers account,you will be called into the notary along with the seller to sign the deed.Now it`s time to savor the moment and celebrate as you have just landed the purchase and have the deeds in your hands!
Don`t take them home just yet though....once signed,they need to be registered in the notary,stamped and written into the ledger.This will take a day or 2 so you need to go back one last time,pay the fees(3%)and pick up your property on paper,fully titled,legalized and registered in your name,Congratulations!
My next blog will cover some of the issues that pop up during the course of purchase.
I`m off to the beach now!
Wednesday 13 July 2011
How to buy property in Brazil;Basic steps to purchase Brazilian realestate Part 2
Buy property in Brazil. What are the basic steps??
Following on from my blog about Brazilian realestate in the 21rst century;http://brazilbeachhouse-wwwbrazbeachhousecom.blogspot.com/2011/07/information-onbrazilian-property-market.html
You have seen the Brazilian beach property of your dreams,the one that ticks all the boxes,a not to miss investment opportunity in the sunshine and you want to close the deal.You have made contact with the owner/agent passed on your offer and it has been accepted.Action taken, first step completed….
How do you then proceed with payments and paperwork?
To establish the sale, your lawyer or estate agent will make a private purchasing agreement(Contrato de Compra e Venda)between yourselves and the seller in which all the terms and conditions of sale are stated.The format is pretty standard and runs as follows;
PURCHASING AGREEMENT FOR PROPERTY SALE IN BRAZIL
-Personal details of buyer and seller
-Physical characteristics of the property and registration details recorded at the respective notary office
-Price and terms of payment with time period of 30-60days for closing.Down payment between 10-20% and details of where the money should be wired(sellers bank account)
-Legal obligations of buyer and seller including who pays the closing fees(buyer)and what documents are needed to transfer title(seller)
-Consequence of desisting from sale.In case of buyer,loss of deposit.For the seller,return of deposit plus fine
After this agreement is signed,you will be required to transfer the deposit payment to the sellers account(in Brazil or overseas if seller is foreign)
That`s it for now! It`s a done deal and you have just secured the property.All that remains is to get the new deed prepared for transfer of ownership,pay your property taxes/closing fees and pay the balance to the seller.More to come on this final step in the next installment.....
Have you bought property in Brazil before?What was your experience?Are you considering to buy property in Brazil?Do you need advice on any matters regarding selling/buying Brazilian realestate?Please send me your comments and questions....
Mike Smith
Licensed realestate agent in Natal/Brazil
CRECI: 3125
Following on from my blog about Brazilian realestate in the 21rst century;http://brazilbeachhouse-wwwbrazbeachhousecom.blogspot.com/2011/07/information-onbrazilian-property-market.html
You have seen the Brazilian beach property of your dreams,the one that ticks all the boxes,a not to miss investment opportunity in the sunshine and you want to close the deal.You have made contact with the owner/agent passed on your offer and it has been accepted.Action taken, first step completed….
How do you then proceed with payments and paperwork?
To establish the sale, your lawyer or estate agent will make a private purchasing agreement(Contrato de Compra e Venda)between yourselves and the seller in which all the terms and conditions of sale are stated.The format is pretty standard and runs as follows;
PURCHASING AGREEMENT FOR PROPERTY SALE IN BRAZIL
-Personal details of buyer and seller
-Physical characteristics of the property and registration details recorded at the respective notary office
-Price and terms of payment with time period of 30-60days for closing.Down payment between 10-20% and details of where the money should be wired(sellers bank account)
-Legal obligations of buyer and seller including who pays the closing fees(buyer)and what documents are needed to transfer title(seller)
-Consequence of desisting from sale.In case of buyer,loss of deposit.For the seller,return of deposit plus fine
After this agreement is signed,you will be required to transfer the deposit payment to the sellers account(in Brazil or overseas if seller is foreign)
That`s it for now! It`s a done deal and you have just secured the property.All that remains is to get the new deed prepared for transfer of ownership,pay your property taxes/closing fees and pay the balance to the seller.More to come on this final step in the next installment.....
Have you bought property in Brazil before?What was your experience?Are you considering to buy property in Brazil?Do you need advice on any matters regarding selling/buying Brazilian realestate?Please send me your comments and questions....
Mike Smith
Licensed realestate agent in Natal/Brazil
CRECI: 3125
Sunday 10 July 2011
Information on Brazilian property market in 21rst Century..Much improved but still alot to learn!
When I first started looking for on-line property in Brazil around 9years ago the listings available were pretty sparse.There were only a handful of sites and I managed to make contact with just one english speaking agent who told me I would need double the funds(I had at the time)to purchase a half decent house in Salvador.This left me a bit despondent with more reservations than inspiration!
When researching the ins and outs of purchasing property in Brazil,the information was few and far between with contradictions and conflicting accounts of what documents were/n`t needed,what to look out for,what you could/couldn't`t buy,etc.It was all a bit daunting and I was imagining all the things that might or would (according to the more pessimistic anecdotes)go wrong.
That was then,in the early 21rst century!I jumped in at the deep end anyway and learnt the hard way with little guidance.Now of course Brazilian realestate is to be found all over the net with forums,blogs(like this one)how to buy guides and a whole array of useful/practical advice to orient would be buyers.First time investors have so much more information about Brazil at their finger tips and use it accordingly.I am amazed at the insider knowledge of some of our would-be clients fresh off the plane you can name drop local developments and resorts like they had been here for years.
This type of comprehensive international coverage on all things Brazilian is set to continue and gain pace as we approach the World Cup and Olympics in 2014 and 2016.The country is interacting globally in business,politics and trade like never before as Brazil comes closer to becoming a world power in its own right.
However despite vast improvements across the board,Brazil is still often misunderstood and the property market is no exception where uncertainties,doubts and misinformation about the logistics of buying property here, abound.I want to add a little clarity on the subject based on my practical experience of buying and selling realestate in R/N over the past 7 years so please join me in this weeks step by step guide on how to purchase property in Brazil.
When researching the ins and outs of purchasing property in Brazil,the information was few and far between with contradictions and conflicting accounts of what documents were/n`t needed,what to look out for,what you could/couldn't`t buy,etc.It was all a bit daunting and I was imagining all the things that might or would (according to the more pessimistic anecdotes)go wrong.
That was then,in the early 21rst century!I jumped in at the deep end anyway and learnt the hard way with little guidance.Now of course Brazilian realestate is to be found all over the net with forums,blogs(like this one)how to buy guides and a whole array of useful/practical advice to orient would be buyers.First time investors have so much more information about Brazil at their finger tips and use it accordingly.I am amazed at the insider knowledge of some of our would-be clients fresh off the plane you can name drop local developments and resorts like they had been here for years.
This type of comprehensive international coverage on all things Brazilian is set to continue and gain pace as we approach the World Cup and Olympics in 2014 and 2016.The country is interacting globally in business,politics and trade like never before as Brazil comes closer to becoming a world power in its own right.
However despite vast improvements across the board,Brazil is still often misunderstood and the property market is no exception where uncertainties,doubts and misinformation about the logistics of buying property here, abound.I want to add a little clarity on the subject based on my practical experience of buying and selling realestate in R/N over the past 7 years so please join me in this weeks step by step guide on how to purchase property in Brazil.
Tuesday 5 July 2011
Spanish client buys 4 beachfront properties in Natal for investment.His story so far...
We featured an oceanfront apartment for sale as "property of the week"on our website www.brazbeachhouse.com back in September and received an inquiry shortly after-wards.The gentleman just wanted to see some more interior photos before committing to purchase but basically wanted the property and was prepared to pay the asking price if necessary.
After providing the additional images and itemizing the furniture included he agreed to buy.
We were able to get him a 20%reduction in price and nearly all of the furniture so he was pretty happy with the outcome!
The following week we advertised another oceanfront villa on our homepage.This property was on special offer at a 50% discount in Euros and at a price well below it`s market value.Sensing a bargain and not one to miss out on an opportunity,the same guy made an offer on the spot which was accepted.The house had some expensive antique furniture which remained and we managed to secure a 5%discount on the sales price.
After making deposits on both properties and signing two purchasing agreements he came over to Natal last month(for the first time)to see what he was getting for his investments.He really loved what he saw so we organized his tax registration number(c.p.f)and he made a power of attorney for me to sign the deeds over in his absence.We also discussed how best to property manage his new assets.He then went back home,the deeds were prepared,final payments sent with title`s transferred and registered in his name.
Sale completed,job done,break out the champagne!!!Not quite............
After-sales work has just begun,,,,,,
We are now making the final touches to his apartment after re-decorating/furbishing and have set the wheels in motion to get it rented out for a minimum 10%return for the first year and beyond.I have personally guaranteed to pay this in cash by 2011 as I am really confident we can attain this target.
As for the beachfront villa he bought...it is located further up the coast,in a quieter resort so not as easy a prospect for all-year round rentals however we connected the new owner with the director of NatalOceanClub(a new 5 star spa resort) just next door.They have agreed to include the property in their hotel rental pool after upgrading to 5 star standards(the renovation will cost around 20,000euros)The contract is for 5 years,the projected returns are well over 10%per an-um and the owner will have full access to the resort facilities with complete property management.Property appreciation is likely to be significant as this tie-in starts to bear fruit and the surrounding area develops further.
We have built up a great relationship with this client over a short-period of time,being in almost daily contact for the past 2 months and we hope to continue being of service to him for many years to come!
UPDATE JULY 2011
The client has now bought 2 more properties from us since this post.
Here are the homes he has purchased up until now;
http://www.brazbeachhouse.com/properties-details,,96,2010
http://www.brazbeachhouse.com/properties-details,beautiful-clifftop-villa,1,2010
http://www.brazbeachhouse.com/properties-details,fully-furnished-luxury-beachfront-villa-for-sale-in-genipabu-natal,10,2010
http://www.brazbeachhouse.com/properties-details,beachfront-house-rock-bottom-price,4,2010
To be continued.......
After providing the additional images and itemizing the furniture included he agreed to buy.
We were able to get him a 20%reduction in price and nearly all of the furniture so he was pretty happy with the outcome!
The following week we advertised another oceanfront villa on our homepage.This property was on special offer at a 50% discount in Euros and at a price well below it`s market value.Sensing a bargain and not one to miss out on an opportunity,the same guy made an offer on the spot which was accepted.The house had some expensive antique furniture which remained and we managed to secure a 5%discount on the sales price.
After making deposits on both properties and signing two purchasing agreements he came over to Natal last month(for the first time)to see what he was getting for his investments.He really loved what he saw so we organized his tax registration number(c.p.f)and he made a power of attorney for me to sign the deeds over in his absence.We also discussed how best to property manage his new assets.He then went back home,the deeds were prepared,final payments sent with title`s transferred and registered in his name.
Sale completed,job done,break out the champagne!!!Not quite............
After-sales work has just begun,,,,,,
We are now making the final touches to his apartment after re-decorating/furbishing and have set the wheels in motion to get it rented out for a minimum 10%return for the first year and beyond.I have personally guaranteed to pay this in cash by 2011 as I am really confident we can attain this target.
As for the beachfront villa he bought...it is located further up the coast,in a quieter resort so not as easy a prospect for all-year round rentals however we connected the new owner with the director of NatalOceanClub(a new 5 star spa resort) just next door.They have agreed to include the property in their hotel rental pool after upgrading to 5 star standards(the renovation will cost around 20,000euros)The contract is for 5 years,the projected returns are well over 10%per an-um and the owner will have full access to the resort facilities with complete property management.Property appreciation is likely to be significant as this tie-in starts to bear fruit and the surrounding area develops further.
We have built up a great relationship with this client over a short-period of time,being in almost daily contact for the past 2 months and we hope to continue being of service to him for many years to come!
UPDATE JULY 2011
The client has now bought 2 more properties from us since this post.
Here are the homes he has purchased up until now;
http://www.brazbeachhouse.com/properties-details,,96,2010
http://www.brazbeachhouse.com/properties-details,beautiful-clifftop-villa,1,2010
http://www.brazbeachhouse.com/properties-details,fully-furnished-luxury-beachfront-villa-for-sale-in-genipabu-natal,10,2010
http://www.brazbeachhouse.com/properties-details,beachfront-house-rock-bottom-price,4,2010
To be continued.......
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