Acquisition of property in Brazil demands, as elsewhere, arrangement of the necessary formalities. The basis for acquiring possessions in Brazil is to have proof of CPF registration. This is a personal Social Fiscal (Social Security) number, issued by the Brazilian Tax Authority (Receita Federal). In order to obtain a CPF number it is required to deliver the following documents to a Brazilian Consulate General:
- An international birth certificate (or family register*), if married for both persons.
- An international marriage certificate.
- A minimum of six months valid passport for those involved.
- If applicable, a Notary certified power of attorney letter.
LEGALIZATION OF DOCUMENTS
Comon practish of the Brazilian Consulate General is to copy the documents presented to them (may vary per Consulate). Your passport will be returned immediately after copying. To proceed and finalize your request, the Consulate need to have the following from you:
- Cash payment, if possible with appropriate change, for handling costs.
- To yourself addressed envelope with sufficient postage, used to return the certified documents.
* In the unlikely event that no international birth certificate is available, spouses need to have the family register translated by a sworn translator, accredited by the Brazilian Consulate (applies to all translations). The Brazilian law requires that applicants provide proof from which parents they are descending and when and where they are born. Especially the applicants mother is of importance.
TIP 1: Let all your documents (including international documents) be translated by a sworn translator. The costs are low and the official to whom your CPF application is submitted will be grateful for it.
Brazil property taxes and fees
It is always recommended to take up-to-date advice of an expert on taxation issues affecting the purchase and ownership of property in Brazil.
Costs of a real estate transaction include the following:
- Transfer Tax approx. 3% of transfer value.
- Notary fee approx. 1.25 %. Example: per € 100,000 approx. € 1.250.
- Deed registration in the land register (cadastre) approx. 0.75%
- Sworn translator, need of guidance and administration fee approx. 1.75%. Translation for foreigners who do not master the Portuguese language.
- Real estate agency fees (approx. 6%) are borne by the vendors.
Note: Property is subject to an annual municipal tax. Rates may vary per municipality and are based on the estimated value of the property.
Costs related to rental income and capital gains:
Income arising from property rental is taxed at the general income tax rate. This currently rates from 15% to 27,5%.
Brazilian non-residents are subject to withholding tax on profits made from the sale of property in Brazil. Tax on profits is rated at 15%, except when double taxation treaties provide for tax relief. When profits are remitted to a country or territory with income tax rates below 20%, withholding tax is levied at 25%.
- Powerpoint presentation: Brazilian lawyer office about real estate transactions. Noronha Advogados