The following section is sub-divided into three parts. The first comprises our consulting services, the second contains general information about real estate purchases in Brazil. The final part has a blog-like structure and is continuously updated with Frequently Asked Questions.
1) Consulting Services Brazil – Real Estate, Economic and Legal/Juridical
São Paulo, October 2022
The members and associates of Real Estate Brazil offer an ample range and scope of consulting services on academic level, provided by our team composed of leading experts with master and phd-degrees, in the fields of agribusiness consulting, renewable energies and principally real estate. Besides traditional realtor services, like property intermediation, our activities comprise various forms of market and sectoral analysis, due diligences, elaboration of business plans etc. For each client we conceive an individual consulting service, based on our knowledge and long-term experience. Consultancies can occur in different ways, from phone calls and real/virtual conferences to written assessments and analysis. They are usually done in portugues, english and german language.
We provide also legal consulting in cooperation with our partner agency (Campedelli Advogados) in São Paulo. This comprises, among others, documentary analysis, the application process for Permanent Visa/Residency as well as consulting in financial transfers (advocacy escrow accounts). We will establish contact with the representative for Foreign Affairs, José Ruben Marone, on request.
We are also, on regular basis, organizing and conducting real estate workshops in Berlin and São Paulo (IHK Berlin, AHK São Paulo) where we present Brazilian properties as well as general courses about real estate economics in Brazil. For inscriptions and participations as well as updated time tables please contact us. The timetable for october to dezember 2022 is currently available.
01) Realtor Services and Sworn Appraisals (Pareceres Técnicos de Avaliação Mercadológica)
Realtor Services that refer to the sale or rent of properties, including the preparation of the sales process, providing of property relevant and locational information and the organization of visits – that is traditional realtor services from first contact to the conclusion of the sale – are free of charge. Realtors in Brazil do not charge neither a fee nor a commission from the buyer. The payment of the commission is exclusively the responsibility of the seller. Additionally, we do not work with overpricing of any kind. According to CRECI regulation the prescribed percentage is applied, independent of the final sales price (https://www.crecisp.gov.br/corretor/tabelareferencialdehonorarios)
For sellers we offer a very differentiated approach, moving beyond what realtors usually perform. Our property-promotion strategies are not restricted to our client data banks, internet our newspaper listings and cooperation with Brazilian collegueas.
As one of our main activities, we participate at the large Real Estate Fairs and Expositions in Berlin, Frankfurt or São Paulo where we present selected properties to sophisticated audiences during seminars and presentations. We are affiliated to the German Chamber of Industry and Commerce (IHK) and have access to an ample corporative client base.
Furthermore, the partners Andreas Hahn and Michael Smith are associated with the New York Times and can submit selected properties eligible for exclusive articles. We also do publicly sworn appraisals of real estate in Brazil (according to the stipulations of Resolution of the Conselho Federal de Corretores de Imóveis (COFECI) nºs 957, from the 22nd of may 2006 (D.O.U. 26/06/2006), and 1.066, of the 22 of novembro 2007 (D.O.U. 29/11/2007)
Additionally, for those proprietors that do not to enlist our services as real estate consultants and wish to exclusively place a listing, on their own responsibility, on our homepage, can do so for a fee of 560 Reais (R$) for an unlimited timeframe. In this case no commission is charged upon sale. Please contact us for this modality.
02) Additional Consulting Services
However, we offer also fee-based services for those that require a more complex and profund economic consulting in relation to Brazil, which is not tied to a purchase or rental through our company. Thus independent of any sale or rental activity through us, we offer general consulting, comprising due diligence and legal consulting by our advocates. We also accompany sales as neutral “third” parties, advising and counseling as well as giving a “second” assessment.
a) Economic Consulting – Surveys and Reports
Economic and Market Consulting aims at clients that require in-depth reports about specific items or subdomains of the Brazilian Economy, like specific sectors (agricultural, real estate, monetary, production), contextual variables (markets, infrastructure etc.) or specific regions. Consulting reports occur usually, as the name suggests, in written form and can comprise up to 50 pages, depending on the item at hand and the work effort agreed upon. It is usually conducted by consulting ample sources of literature, interviews, academic and empirical research.
b) Real Estate Assessment and Consulting
This category is targeted, in the majority of cases, at individual/natural persons. Subject to the corresponding services is the search for and the investment in particular properties (houses, apartments, lots) which are suited for individual and residential use:
- Documentary Analysis and Evaluation (escritura publica, certidoes, cessão de direitos)
- Comparative Analysis of the regional property situation
- Inclusion of local/regional partners and networks
- Initiation, Attendance and Advisory Services in relation to the dialogue between costumer and proprietor
- Organisation of property visits
- Consulting in General Matters (Presentation of the Region, Infrastructure, „First Steps in the Brazilian Daily Routine“)
c) Property and Business Evaluation – Industrial, Commercial and Agricultural Properties
A rather more complex issue is the search for suited commercial properties. In the 21st century Brazil has become a worthwhile investment country with high returns and growth rates. In particular, the agricultural sector, as specific part of Brazilian real estate/imoveis Brasil has an eminent role. Finding and Evaluating matching properties requires e.g. detailed knowledge of economic parameters as well as the regional characteristics of the respective area.
We dispose of ample regional know-how and offer:
- Due diligence and evaluation
- Business plans and financial projections (Internal Rates of Return, CapEx calc. etc.)
- Analysis and evaluation of the regional real estate market/Search and Acquisition
- Analysis of regional parameters (environmental parameters, infrastructure, etc.)
- Market and competition studies
- Economic Assessment of Commercial Viability
- Rental Analysis
- Evaluation of mid and long-termsustainability
- Organization of Property visits
- Initiation, Attendance and Advisory Services in relation to the dialogue between costumer and proprietor
d) Market Assessment and Evaluation (Pricing) and Survey of Privat and Commercial Properties – Professional and Publicly Sworn Appraisals
Due to time constraints or lack of comparative market knowledge, on many occasions proprietors themselves are not able to accompany the development on the property market accordingly – due to time constraints or geographical barriers. In relation to that we offer the following services:
- Inventory of properties (including photo documentation, status description)
- documentary analysis
- Market price estimation/evaluation
e) Consulting and Monitoring of Investor-Negotiations
We have access to a wide range of commercial properties, particularly in the agricultural/rural sector. To potential investors we offer a broad portfolio of properties in attractive growth markets. The acquisition of a larger commercial property should always be well planned and carried out diligently – transactions of a major scale do not “happen overnight”. A very sensitive area concerns the flawless communication between International investors and Brazilian proprietors. Both groups usually are characterized by significant (cultural) differences, especially in terms of business practices and habits. Brazilian „rules of the game“ are not always simple to understand for non-Brazilians. We assist and advise investors on the way up to the completion of the the transaction. Our services thus include:
- Translation and Interpretation (English / Portuguese / German)
- Organization of conferences and negotiations
- Mediation and intervention during conflicts (conflict resolution)
- Organization of property visits
- Consulting in all matters during negotiations
f) Due Diligence – in Cooperation with Campedelli Advogados, São Paulo
- Due diligence and Viability analysis of commercial real estate investment (agricultural, residential) – performed by Dr. Andreas Hahn, Real Estate Brazil
- Company Formation and Establishment of the CNPJ, performed by Campedelli Advogados:
- Development and elaboration of the company contract (German and Portuguese) with particular regard to the intended purpose of the company
- Registration of the company contract in the Company Register of corresponding state (“Junta Commercial”)
- Obtaining the necessary tax registration with the corresponding financial authorities – federal, state and community level (“CNPJ”, “IE” and “CCM”)
- Obtaining the necessary tax registration of foreign shareholders (“CNPJ”)
Principal languages of communication are english, german and portuguese (business fluent).
- On our homepage you can find a bibliography containing regularly updated literature about the real estate and commercial/agribusiness area.
g) Permanent Visa and Residency
- Supervision of the Legal Procedure to obtain different kinds of visa (Marriage Visa, Investor´s Visa etc.)
- Legal Consulting
- Taking care of the complete Visa Application Process (Campedelli/EMDOC)
2) General Information about Modalities and Legal Procedures of Real Estate Transactions in Brazil
This sub-section will be continously updated with basic information regarding the terms and conditions of real estate transactions in Brazil, based on its legal framework. It does not substitute a proper and case-specific consulting, but should provide to interested clients a general overview about important questions regarding real estate transactions. Additionally, in “blog-form” on a regular basis, case specific questions (examples) will be highlighted and answered.
It targets primarily foreign buyers and investors. A first and very essential distinction is related to the question whether the buyer purchases an urban or rural property. In the former case, the procedure is rather simple and its only requirement is the CPF (more details below). When it comes to the purchase of rural properties, principally larger than 50 ha (dependent on the state regulations), usually the formation of a company with CNPJ and the inclusion of a Brazilian partner is necessary.
§1 General Information about the Purchase of Real Estate in Brazil:
The first step for a foreigner to acquire real estate in Brazil is to obtain the CPF (Cadastro Pessoa Fisica) number from the Receita Federal (Finance Ministry – Revenue Service) – more information at www.receita.fazenda.gov.br or by telephone 0300-780300.
During the acquisition of an urban property by foreigners the submission of the CPF, passport, proof of residence of the country and birth certificate or marriage (usually accompanied by a certified translation) are required. The CPF can usually be requested at the respective Brazilian consulates (1 work day) or in Brazil at the Post Office, and a few days later recovered from an office of the Receita Federal (average cost around 7 – 8 R$). We can accompany clients during this procedure.
In the acquisition of rural property by foreigners, in addition to the above documents, proof of residence in the national territory is required and the area of the property may not exceed 50 (fifty) modules, in continuous or discontinuous area (module size varies according to the location of the property).
Transfers from abroad to Brazil
To open an account with Brazilian banks, the foreigner must have, in addition to the CPF and passport, a permanent visa (RNE – Registro Nacional Estrangeiro) and proof of residence in the country.
To transfer money from abroad to Brazil, there are two different possibilites:
(1) If the foreigner already has a checking account in a Brazilian bank: simply ask the home bank to transfer the money, providing details of the recipient bank such as: Bank name and number, branch, checking account and Swift code Bank);
(2) If the foreigner does not have a bank account in Brazil, the maximum amount that he will be able to transfer from abroad to himself will be approximately US $ 5,000 (US $ 5,000) to be withdrawn in cash at any bank branch. However, it may transfer any amount if it is to a third-party national bank account, but the reason for the transfer to the Central Bank of Brazil must be proven, in order to release the amount transferred (the voucher may be a Private Instrument or a Deed of Promise of Purchase and sale of property).
Progressively, new forms of money transfers (like for example transferwise) or payments are being developed, facilitating the process. Additionally, in many cases property owners in Brazil have accounts in Europe or in the US, enabling the possibility to pay the sales price in Europe or in the United States. It is, however, important to note that at least a fraction of the sales price (“Valor venal”) has to be paid in Brazil. In our office we have a partnership with FB Capital and Travel Ex, both facilitating transfers to Brazil.
§ 3 Visa and Permanent Residency
Brazil offers a variety of different visa, detailed information can be obtained here:
It should be added that since November 2018 it is possible to obtain a new kind of visa – the real estate investor´s visum, which grants the possibility to obtain a permanent residency on the only condition of an investment into real estate of 1.000.000 R$ (700.000 R$ in the Northeast). This was stipulated by Normative Resolution 36:
We offer legal services for our clients in relation to the application for each type of distinct visa in cooperation with Campedelli Advogados/EMDOC.
§ 4 Documentation
The following represents a more extensive overview about the documentary requirements during a real estate transaction. It is important to note that not in every case each enumerated document or certificate (certidão) is necessary. Quite frequently each notary´s office has different requirements and there are certain areas of discretion. In general, there are three types of documents that have to be delivered: personal documents from the owner, personal documents from the buyer and object-related documents concerning the property:
A. Owner Documents
The notary (tabelião) usually requires documents and certificates from the owner that show his/her civil, financial and judicial situation. This process requires the delivery of copies of CPF and RG, as well as the following certificates:
- Certificate of birth or marriage to prove marital status and verify necessary actions. For example, if the seller is married, the spouse must authorize the business. If the owner is divorced with children, he must assess whether the property is inherited.
- lawsuits, which should cover the municipal, state and federal levels to analyze if the landlord is listed in any ongoing proceedings. In the case of a civil action, make sure that the seller’s assets are sufficient to pay the debt.
- Specifically the following are needed theoretically. On a case by case basis the notary can refrain from soliciting all of them. We are using here the portuguese denominations:
- Certidão de nascimento para solteiros; ou de casamento, divórcio e viuvez;
Certidão de união estável, indicando o tipo de comunhão de bens;
Certidão de emancipação se o indivíduo for menor de 21 anos;
Certidão do distribuidor cível;
Certidão de feitos, solicitada à Justiça Federal;
Certidão de feitos, emitido pela Justiça do Trabalho;
Certidão negativa do ofício de interdição e tutelas.
In case the seller is a legal entity, more documents are required:
- Certified copy of the statutes of association at the Board of Trade;
- Papers with contractual or statutory amendments registered with the Commercial Board;
- Letter stating the date of the last amendment of the by-laws or contract;
- negative certificate of debt with the National Institute of Social Security (INSS);
- negative certificate of state debts, obtained from the State Department of Finance (Sefaz);
- negative certificate of actions in the Labor and Federal courts.
B. Buyer Documents
Here usually only personal registration data (Passport Number, CPF – Cadastro Pessoa Fisica) are required. If the buyer is married, in most cases a marriage certificated (translated by a sworn translator) is also necessary.
C. Property-related Documents
The following documents or certificates (“certidoes”) are necessary:
1. Updated Property Registration Certificate (Escritura Publica/RGI or Posse)
This document proves the legal situation of the property. In most cases, a property has either a so-called escritura publica, a public deed with the so-called RGI (Registro Geral de Imoveis – General Property Register), or in some cases a “Posse”, that is a proprietary document which proves the ownership by occupation over a longer time frame (usually 20 years). The “Posse”, also refered to as “Usucapião” is the right that the individual acquires in relation to the possession of a movable or immovable property as a result of the use of the property for a certain time, continuously and without question. This can be transformed into a public deed at a later stage.
2. Information about the ITBI: Imposto de Transmissão de Bens Imóveis, the property transference tax (see below under “Fees and Payments”)
3. Certidão Negativa de Débitos Municipais (Negative Certificate of Municipal Debts), to be solicited at the Prefeitura/Townhall, which usually takes 10 workdays to emit.
4. Floor Plans and habite-se: usually required in case of financing and FGTS payment;
5. Declaração de quitação condominial (Declaration of Paid Condominio Fees – only in case of apartments): statement by the liquidator or the administrator of the condominio, stating that the property is without Condominio debts.
Now depending on the specific characteristics of the property, mainly in relation to its location, other documents and tax proofs may be required. Usually, if the property is of a marine nature (islands, beach land etc.) they are in the legal dominion of the SPU (Secretaria do Patrimônio da União), which makes them liable to pay the so-called Laudemio, the marine tax. Upon purchase of the property, these tax liabilities will be transferred to the new owner, and the payment of these taxes until the sale have to be proven.
In relation to SPU, see also: http://www.planejamento.gov.br/acesso-a-informacao/institucional/unidades/spu
§ 5 Fees and Payments
Each real estate sale comes with transaction costs that are shared among Seller and Prospective Buyer:
1. Real Estate Transfer Tax (ITBI – Impostod e Transferencia de Bens Imoveis))
The Buyer is charged for the property being transferred to the buyer´s name. The responsible party for the payment is the buyer and the amount varies according to the percentage of each city, being applied on the price of the property.
In most cities, the ITBI is around 2% or 3%, but there may be exceptions, especially if the property is funded by the SFH, Residential Lease Program (PAR) or Social Interest Housing (HIS).
2. Notary Purchase Registration
This document is required for the property to be passed on to your name. The amount varies by state and is set according to the price range of the property. The payment of the notary costs is also responsibility of the Buyer.
3. Public Deed
The idea of this document is to represent the contract of sale. The value of the deed varies according to the price range of the good and the state. It is worth noting that if you make a loan, one does not need this certificate because the loan agreement replaces it.
4. Realtor´s Commission: The payment of the realtor´s commission is exclusive responsibility of the Seller and usually ranges between 5 and 6 %. Buyer´s commissions as well as any kind of overpricing are neither authorized by CRECI nor common practice in Brazil. International offers of Brazilian properties that ask for a buyer´s commission should thus be regarded with caution.
For further reference (with the state of São Paulo as an example): https://www.crecisp.gov.br/corretor/tabelareferencialdehonorarios
§ 6 Advices regarding Construction – Consulting Services
Construction in Brazil is quite different from European countries:
– While in Europe the walls are double to protect from the cold, in Brazil there is no need for this type of thermal insulation and the houses are more open to allow more ventilation because of the heat;
– Medium and simple residences do not have hot water in the bathroom and kitchen taps. In these houses the showers are electric;
– The walls of Brazilian houses have no structural function, they only serve as closures. The structure of the house is made by columns and wooden or concrete beams;
– windows and doors are usually wood (in simpler houses are aluminum);
– the roofs have a wooden structure. It is usually placed between the tiles and the lining a thin blanket (plastic or aluminum) to aid in thermal insulation and protect from gutters;
– House foundations need to be stronger than in Europe because of the heavier weight of walls and structures;
It is recommended to use local construction techniques as they are adapted to the weather, soil, and existing workmanship and materials.
3) Frequently Asked Questions – Blog about Real Estate Transactions
In this blog-like section we will post, continuously, select questions and answers regarding real estate transactions in Brazil. The here discussed items are frequent issues when purchasing properties in Brazil, mostly questions made by our clients, or asked during seminars and presentations on expos. They do not merely comprise legal questions or issues, but also general market considerations and costumes in Brazil. They will be progressively updated.
- How can I create the deed (escritura) of my land, while it is legally occupied (posse) in the city hall?
The public deed of purchase and sale is one of the acts that must be drawn up at the Notary’s Office. In real estate transactions, it is used to formalize the purchase and sale of a particular property.
In addition to formalizing the agreed clauses, the deed is recorded eternally in the proper book of the Notary’s Office. This means that at any time a new copy of the certificate may be requested and used to formalize the transfer of property in the Real Estate Registry Office, registering the information on the property registration.
However, despite all the legal certainty that regularized real estate has, some homeowners postpone the necessary procedures and often real estate can be found where:
The landlord is in fact different from the landlord on the property registration plate;
There was no public deed of transfer;
The transfer was made by private purchase and sale agreement only;
The property is in the process of inventory, among others.
Settling properties without deed can be costly and time consuming. This time frame is usually even longer when it becomes necessary to resort to legal remedies. But, what is required to perform the regularization?
Find the former owners
One of the options to regularize the property without deed is to locate the former owners. This is the simplest and most efficient alternative. After the location, simply attend the Notary Office of your choice to request the drawing up of the document.
Several documents should be presented as ID, CPF, if married Marriage Certificate, Certificate of Updated Property Registration, among others. Therefore, we recommend contacting the notary in advance for a complete list of what you will need.
Localization of former owners may not be successful, especially when it has been several years since the acquisition of the property.
In this situation, one of the alternatives is to resort to the adverse possession process. This process aims to enable the claimant to obtain judicial evidence that the property object of the claim, in fact, belongs to it.
The usucapion request can be made directly at the Real Estate Registry Office or in court, according to each case.
- Is it possible to finance a property purchase in Brazil with a mortgage or anything similar?
This is a very frequent question that we get from international clients. Here the very clear and unambiguous answer is No. Brazilian banks, or any other lending institution, do not give loans or mortgages to foreigners. Even Brazilians (aside of specific projects like “Minha Casa minha Vida”) usually do not have access to loans. On the other hand, it is equally improbable that European or American banks provide loans for purchases in Brazil. Thus, in all our experience, it has to be made very clear that Brazil is a “cash-payment” country. Owners expect of clients that express an explicit interest in purchasing a property, or want to schedule a visit, that they have the necessary financial means available should they decide to purchase the property.
- Is it possible to pay a property in installments and move into the property before the payment of the last installment?
The first item, namely the possibility to pay in installments, depends on the specific situation and the willingness of the owner to concede certain payment modalities. However, in most cases owners accept only cash-payments and in Brazil it is costumary that at the same day when the escritura (deed) is being performed in the notary, the sales price is paid in full. Depending on the concrete situation there have been cases where owners accepted a downpayment and a few installments, but usually not more than 2 – 3 over a maximum time frame of 6 months. And here it is crucial to consider that a potential buyer will only be allowed to actually move into the property (hand over of keys) after the payment of the last installment.
- Is it possible to schedule a visit of a property or enter a negotiation without proper ressources for purchase guaranteed?
It is natural, and goes without saying, that before a visit of a property and a certain diligence it is not possible to make an informed decision whether to purchase or not. No one expects that a buyer purchases a property only based on the information (yet to be verified personally) in the internet or provided during a presentation. Every owner and realtor understands that. However, it is explicitely expected that a potential buyer, at the moment when he/she expresses an interest in the property and schedules a visit, has the financial means available in order to purchase the property, should the decision be in favor of it.
In the course of the last years we observed quite frequently that potential clients scheduled visits of properties and expressing their interest in a purchase, but not actually revealing that at the moment of the visit they did not have the necessary financial ressources for purchase. We strongly do discourage to schedule visits or enter negotiations without the necessary financial ressources available. Owners in most cases expect that clients do provide transparent information beforehand about their capabilities. As a fact, mutual and reciprocal transparency is key to successful negotiations.
- The property is advertised for sale. Is it nevertheless possible to rent beforehand, with an option for a posterior purchase?
In the frequency ranking regarding questions that we get from international clients this one is certainly one with the “highest ranking”. Here also the answer is relatively clear cut: When a property is advertised for sale in Brazil, be it in the internet or during real estate expositions (as we do them with regularity at the Chamber of Commerce in Berlin) it is really just that: for sale. While it is perfectly understandable that interested buyers might want to first get a “lay of the land”, that is get to know the property better, verify whether it is rentable on a empirical basis, most owners do not accept this, due to the inherent insecurity involved. Thus we recommend to schedule a visit of maybe 1 – (maximum) 2 days and check the property in detail.