Home sweet home - Brazilian style

How to Buy a House in Brazil

Housing in Brazil has always been seen as a sound investment. If you are looking to simply invest in the Brazilian housing market, there are numerous real estate funds which one can invest into. These funds do all the actual real estate investment for you, so you will not have to buy a house, and when they make money, as an investor, you make money too..

If you are still keen on owning real estate in Brazil, buying it is easy and available to foreigners. However, if you don’t have 100% of the capital needed in hand, you will have to find some means of financing.

 

Finding financing for property is done the same as it is in any country: through the bank. First things first, you must select a property that you wish to purchase. Be warned that if your desired property is not in an urban area, banks may not wish to offer you a loan.

There are 3 major banks in Brazil: Banco Itaú, Banco Bradesco, and Banco do Brazil.

BRL$800,000
Banco Itaú will offer up to 80% of the property value for financing at a maximum of $800,000 Reais.

BRL$400,000

Banco Bradesco will also offer 80% of the property value for financing at a maximum of $400,000 Reais.

BRL$1,500,000

Banco do Brazil will offer up to 90% of the property value for financing at a maximum of $1,500,000 Reais. To take a loan with Banco do Brazil will require you to have a bank account with them.

All banks will most likely take the property as collateral in the case of loan repayment not being completed. You will also be required to prove you have an income capable of sustaining the monthly loan repayments. The bank, on a loan-by-loan basis, determines the amount that his income should be.

 

You will also need some certificates of proof before you can take out a loan. Most of these certificates involve proof that you do not owe money to other banks or to the government of Brazil. As a foreigner you will also need to apply for special permits. Though all of these papers and documentation may sound daunting, all are easily obtainable. For more information on how to obtain these documents it may be worthwhile to hire a property broker to help you whilst in Brazil.

Once you have chosen your property, your bank, and have all of your documentation in order, you are ready to start the process of financing your loan.

  1. Choose the repayment plan most favorable to you and submit the loan plan to the bank
  2. Go to a local branch of the bank with your documentation for credit approval
  3. The property will then be evaluated by the bank
  4. Once all is approved, the buyer and seller of the property will finalize and sign the contract
  5. After the contract is signed, you will need to pay the Brazil property transfer tax
  6. Bring these documents back to the bank for the funds to be transferred to the seller

If your property is not in an urban area but in a rural area, please note that you will have to pay an additional rural real estate tax. This tax is in force to avoid the existence of large tracks of unproductive land. You will have to declare your rural property to the municipality it is located in, and further pay tax based on land area of your property. This will have to be done once a year. The process can be a little confusing, however, there are many companies in Brazil who cater towards helping foreigners deal with their documentation.

 

That’s it! You are now the proud owner of property in Brazil and your next trip will all be about furnishing, or leasing your new beautiful home.