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The purchasing of property in Brazil takes place when two persons
(natural or legal) execute an operation where one
of them transfers to the other a specific immovable
asset, whether it is by purchase and sale, donation,
exchange or any other operation foreseen under Brazilian
law.
In order for an immovable asset to be purchased, it
is necessary that the transfer certificate (purchase
and sale, exchange, donation, etc.) be registered
at the relevant Immovable Property Register.
Urban immovable assets are annually subject to the
Landed Property and Urban Territory Tax, local tax
on the value of the immovable asset, according to
tax rates that vary significantly from one municipality
to another. In the case of buying property in Natal, the applicable rate
is 0.6% for urban immovable assets under 1,000m2.
The ownership transfer of an immovable asset is subject
to the Immovable Property Transfer Tax, which has
competencies at municipality level. The tax rate in
this case varies between 2% and 6% (depending on the
municipality) over the value of the transfer. In the
case of NATAL, the applicable rate is 3%.
Attention should be drawn to the preferential purchasing
right of the tenant, which means that the proprietor,
before transferring the let property to a third party,
shall be required to offer the property to the tenant,
who is legally granted the right to be preferred as
purchaser, in the case of sale.
There is no legal imposition concerning the maximum
or minimum rental period. Once the rental period concludes,
within the following 30 days, the landlord will be
in a position to judicially demand eviction to retrieve
his/her property.
It is highlighted that the sale of the property does
not imply the termination of the rental contract,
but it grants the purchaser the right to, judicially
or extrajudicially, terminate the contract.
Immovable property:
The term "immovable property" includes in any case
property accessory to immovable property, livestock
and equipment used in agriculture and forestry, rights
to which the provisions of private law respecting
landed property apply, as well as infrastructure of
immovable property and rights to variable or fixed
royalties as consideration for the operation or operating
concession of mineral deposits, sources or other natural
resources. Income derived from the direct use, letting
or use in any other form of immovable property located
in Brazil shall be subject to taxation in this country.
These revenues are subject to 15% rate taxation, except
in those cases where the beneficiary is a resident
or is registered in a country which does not tax according
to income, or taxes according to a rate under 20%,
in which case they shall be subject to a 25% rate.
The tax is redeemable when the amount due for rent
is accrued, and must be settled by the legal representative
of the non-resident.
Capital Gains:
The sale of goods and rights located in Brazil by
non-residents is subject to definitive taxation as
acquired surplus with a 15% rate. When determining
the acquired surplus, the tax exemptions and reductions
foreseen for residents in the country shall not be
applied. The gain is calculated from the difference
between the transmission amount and the updated purchasing
amount according to certain adjusting rates.
The transmission can be executed by the proprietor
or by a representative legally appointed by the proprietor.
The tax deduction or deposit shall be executed by
the purchaser, if s/he is a resident in Brazil, or
by the representative of the transferor, if the purchaser
is also a non-resident.
Brazil does not have a double taxation agreement with
the UK.
There is no property tax in Brazil. Foreign investment
is forbidden or limited in certain activities, but
it is absolutely permitted in the case of immovable
investments, with certain restrictions with regard
to rural properties.
Any natural or legal person who owns goods or rights
subject to registration at public bodies, such as
immovable property, current accounts, shareholding
stakes or investments in financial and capital markets,
is forced to register at the Land Register for either
Natural or Legal Persons, accordingly. Registration
can be carried out by anyone who fills in a specific
form and submits it at any Brazilian diplomatic representative
office.
The above rules and costs may vary from time to time.
It is important to use the services of and independent
lawyer. Please Request your lawyer to supply you with
the up to date situation on purchasing property.
Above guide provided
by Overseas
Property Advisors
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BRAZIL
