What You Need to Know to Buy Property in Brazil

Brazil has presented a more stable and attractive investment climate to foreign investors over the past few years thanks to a number of strategic reforms and prolonged periods of stability that the nation has enjoyed.  As a result the nation’s real estate market has come under international scrutiny and property prices in the most attractive, accessible and popular parts of Brazil - from Florianopolis in the south to João Pessoa in the north for example – are rising rapidly. 

Prices are being fuelled by the influx of overseas residential and commercial investors, multinational corporations as well as developers who are all keen on buying land or real estate in this rapidly developing and improving, beautiful nation.  If you’re already listening to the broad media debate about Brazil and you believe that it’s the next market about to boom beyond all expectations, here’s what you need to know to buy property in Brazil safely and successfully.

As with all emerging markets there are going to be potential issues that you need to be aware of, pitfalls that you should watch out for, and the one thing you should not consider doing is buying investment property in Brazil without the aid of a lawyer!

In terms of the main issues to be aware of, they relate to: -

- the cleanliness and validity of the title of the real estate you’re considering buying
- the conveyancing experience of your lawyer.
- the state of repair of resale property as well as permissions required to improve, extend or develop property
- the quality of land and whether it’s actually suitable for construction

Foreigners wanting to buy property in Brazil first have to acquire a personal tax number known as a CPF number – this stands for Cadastro de Pessoas Físicas.  This number is critical as it is applied to every single aspect of the purchase and future resale processes.  At the time of applying for your number it makes sense to find a lawyer who will assist you with the entire conveyancing process and you may want to find out more about title insurance at this stage as well. 

American buyers will be well versed in the benefits of title insurance – British and European buyers less so.  Basically it’s possible in some nations such as the United States and Brazil to insure the title deed of a property you purchase.  You insure against your conveyancing lawyer missing any issues that later come to light – such as there being an outstanding financial claim such as a mortgage against the property for example.

This can be a relatively inexpensive insurance that is worth its weight in gold especially for buyers purchasing older resale property that has a longer history of title and therefore a greater chance of issues arising relating to it.

Your lawyer should check the entire history of the title deed of the property you’re purchasing in Brazil at the nearest Real Estate Registry Office – or Cartório do Registro de Imóveis.  There are offices in every major town with multiple offices in cities.  The search process can take anything up to 3 months to complete depending on the complexity of the property’s history.  After the checks are complete you should discuss with your lawyer their professional opinion relating to the security and validity of the title deed – make sure you get their opinion in writing to protect yourself in the future.

If you’re considering buying property in Brazil that requires extensive remodelling or renovation work or which you plan to extend or change the use of, you need to ensure that you will be granted permission to carry out your planned work before you go ahead and sign the purchase contract.  One way to do this is to approach the local council and ask them for feedback.

Some property in Brazil was built without permission on land that was simply ‘acquired’ or inhabited many, many years ago and the owners of these properties have eventually been given legal right to own the real estate, but they and subsequent buyers have no right to then change the property.  This has been reported to be an issue of concern in Florianopolis for example, and any buyer must ensure the vendor has some form of ownership registration document or Titulo de Propriedade and that their lawyer checks the title deed out for the vendor’s right to resell for example.

Finally in terms of what you need to know to buy property in Brazil safely and successfully, real estate developers should not assume that land for sale is suitable for construction!  This may sound very obvious – but even if you’re told that the land is suitable you should get it surveyed before signing on the dotted line.  Depending on where in Brazil you’re thinking of investing in land for development you may find the top layer of soil is covering swampy land, sand or solid rock for example.

As with any emerging market do your own due diligence, don’t make assumptions or accept promises, get everything legally and professionally checked out and proceed with your commonsense rather than your heart or your greed-gene guiding you!

Special Reports: Property News for Brazil

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Guide to Brazil from a real estate investor's perspective focusing on the property investment opportunities and the beauty of Brazil

Brazil Real Estate Buying Process Guide
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Brazil Real Estate Investment Guide
Brazil real estate offers fantastic medium term investment potential now that the government are committed to long term economic development.