How to Buy Cheap Property in Brazil?
First things first: Can foreigners buy properties in Brazil?
Foreign who want to purchase urban land, coastal properties, residences, or condos face no limitations in Brazil. In fact, foreigners enjoy the same rights as Brazilians and residency is not required.
The only sort of limitation that exist are for foreigners who want to acquire significant areas of rural property for agricultural purposes. Yet, this should not be your concern if you are considering one of the homes listed in Cheap Homes Brazil.
The 10 steps to buying a property in Brazil
Step 1: Finding a house and making the initial offer.
This is where Cheap Homes Brazil comes in. You can subscribe to our newsletter and receive our top picks in terms of homes in Brazil below 100k USD. Once you find a home you like you can contact the seller directly through the information provided in the newsletter or ask someone to do so on your behalf (if you want someone in Brazil, that speaks the language, to help you throughout the whole negotiation as an intermediary contact me here). You will make an offer and come to an agreement at this point. If contrasted to other European countries or the United States, this is done rather informally.
In Brazil, the initial offer is frequently made over the phone or in person. You and the seller will agree in principle on a price and any other general important points regarding the sale. Keep in mind that in Brazil, negotiating is fairly typical in real estate transactions.
Step 2: Get your “CPF”
The CPF is an identification registry made at the Brazilian Treasury. It is a necessary document in Brazil for almost any large transaction.
A CPF can be obtained in Brazil at a Federal Revenue Post or in your home country at a Brazilian Consulate. A lawyer or a real estate agent in Brazil can also use a power of attorney to register your CPF.
Having a CPF in your name is so critical because without it the property will never be attached to your name. Even if you have already made a payment or signed a contract, you will not be considered an owner without a CPF.
Step 3: Check the property’s registry
Checking property’s registry at the respective notary (“Cartório de Registro de Imóveis”) is an essential precaution.
The registry (or “matricula“) holds all of the property’s pertinent information. The current and previous owners, as well as the size and registration ID, are all listed there. It may reveal whether the property is the subject of a litigation that could lead to a property seizure. Also, it will show if the property is being used as a guarantee for a business transaction.
You can do the checking of the property’s registry yourself or ask the help of a lawyer or a real estate agent.
Step 4: Prepare the offer contract
Once you check the status of the property and all looks fine it is time to formalise the purchasing offer. To do so you will need to complete a private sales contract (which is called the “promessa de compra e venda”). In this context, “private” refers to a document that has not been notarized. You can find a template for this type of agreement on the internet, hire a real estate lawyer, or have a Brazilian real estate agent do write one for you.
This contract must impose fines on the parties, conditions of payments and timeframes.
Step 5: Get both parties to sign the contract
Present the promessa de compra e venda (the final offer/agreement) to the seller. Now that you’ve got everything in writing, the seller will want to see if he accepts the conditions.
Step 6: Make the required down-payment
The down-payment is usually transferred directly to the seller’s account, within the period of time specified in the final agreement.
Down payment is normally 10% to 20%, but it can be negotiated.
Step 7: Create a deed
Create a deed for the property (“escritura”), which will be the record of the sale. This step is mandatory for any property valued at more than $10,000 reais ($2,000 dollars) . The preparation of the escritura will be done by a specific type of notoriety, namely “Cartório de Notas”.
Step 8: Make the payment
Make the final payment (or start paying based on the arrangement with the seller). Again, this is a transfer that is done directly to the owner of the property.
There are different ways in which you can set up this transaction.
Perhaps the best way is by a bank transfer using your own Brazilian bank account. If you want to know how to create a Brazilian account without having a permanent residency read this article.
Step 9: Pay the transfer tax
This is a necessary tax to be paid when you buy real estate in Brazil.
The transfer tax will usually around 2% of the value of the property.
Step 10: Publicly register the deed
Take the escritura (and proof of tranfesr tax payment) to another type of notoriety, namely “Cartório de Registro de Imóveis”. This notary enters your property into the official registry.
Only after this last procedure is done, the buyer is considered the owner of the property.
How to Buy Cheap Property in Brazil?