Buying Property in Brazil as a Foreigner - Exact Steps (2024)

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1. Do It Yourself or Hire a Lawyer

   It usually comes down to how familiar you are with Brazil and if you are comfortable with risks or not. Foreigners who speak some level of Portuguese with solid connections with locals may rely on realtors to help with some of the acquisition steps. This may be enough for smaller acquisitions, such as lots in the coastal areas of Brazil. Investors, risk-averse buyers, and those buying properties that represent a substantial share of their total assets should undoubtedly retain a lawyer.
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2. Check Property Records

   Once you have chosen your target property, you should obtain a copy of the property deed (“escritura”). The deed should have an exact description of the property, ownership, and if any major problems (e.g.: liens, usufruto, encumbrances, or disputes) are attached to the property.A clean deed should show no major issues, be registered in the name of the seller, and issued recently. You should avoid purchasing properties entangled with probates, divorcing couples, or any other complex situation.
   Although some sellers will offer to give you a copy of the deed, we recommend that you obtain a copy of the deed directly from the registry.
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3. Draft Purchase & Sale Agreement

   The Purchase & Sale Agreement document addresses not only the terms of sale but also the timeline for the transactions and allocation of obligations and rights to the parties. Among other concerns, stipulate at least 45 days between the signature of the agreement and the closing to allow enough time for all the closing-related tasks to be completed. Never allow a realtor to rush you. Realtors in Brazil will invariably pest you until you either sign a contract or tell them not to rush you. Realtors may lie about the existence of other interested parties to push you to make a deal.
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4. Provide a Downpayment

   In Brazil, it is customary to provide a downpayment as soon as the Draft Purchase & Sale Agreement is signed. The amount to be provided varies greatly. Amounts going from 5% to 15% are most common, although other amounts may be negotiated by the parts. We recommend that you pay no more than 10% as a downpayment. You should hold most of the payment until the closing as this is the most effective way to reduce the many purchase risks involved. Important: there is practically no title insurance or escrow accounts in Brazil.
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5. Send the Money to Brazil

   For a Brazilian seller to receive a bank transfer from abroad, the Brazil Central Bank must authorize the transaction. The amount being sent must match exactly the amount shown in the signed contract. It is also necessary for the seller to “open an exchange account” with their bank. This may be a turnoff for some sellers, although many individual sellers will learn about that only after they already signed the Purchase and Sale Agreement with you.
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6. Obtain a Brazilian Tax ID “CPF”

   The CPF Tax ID card is one of the most important documents a person has in Brazil as it is used by both private and government entities to identify citizens.CPF stands for Register of Individual Taxpayers (Cadastro de Pessoa Física). Each CPF represents a unique number stored and validated by the Brazilian Federal Revenue. A card is usually issued along with the number upon application. You must have a CPF for purchasing a real estate property in Brazil. You also must have it for many other purposes such as opening a bank account or filing your taxes.
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7. Obtain Certificates for Property and Seller

   Clearance certificates must be obtained regarding both the property and the seller. The registration office will require some of such certificates to be presented during the closing. So, in addition to showing that many of the potential legal issues don’t exist (e.g.: unpaid taxes, labor disputes, etc.) such certificates are also a formal requirement for the closing.When we conduct our due diligence procedure, we obtain and assess more certificates than the minimum required by the registration office. We do so to cover more potential issues that may exist in addition to the more basic ones. More on:
   certificates on the seller and certificates on the property.

8. Prepare for Closing

   Once you have signed the contract, the clock starts to tick. Sellers will usually add to the contract penalties in case you are not ready for the closing by a certain deadline.A checklist with all the items required for the closing may help you and your lawyer control everything that should be ready by the closing date. At this stage, the realtor supporting the seller will usually coordinate with the registration office to obtain the estimates for Taxes and Registration costs and also a target date for the closing.
   You can learn more about the preparation for the closing and see a sample Closing Checklist to use when buying a property in Brazil.
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9. Have Documents Translated by a Sworn Translator

   For documents to be acceptable in Brazil they must have been sworn translated into Portuguese. Sworn translations are provided exclusively by Brazilian sworn translators registered with the State Commerce Boards.Do not buy translation services from companies outside of Brazil since they are unable to provide sworn translations in Brazil unless they are reselling the services of a Brazilian sworn translator. Note that a sworn translator is not the same thing as what is considered a “certified translation” in the US or UK. These are two different things. List of Sworn Translators in Brazil.
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10. Obtain a POA – Power of Attorney Valid in Brazil

    A POA is needed if you want your lawyer or someone from your network to participate in the closing on your behalf. The registration is a formal procedure that is usually done in the same registration office in charge of the real estate.For a POA to be valid in Brazil, it must be a “Public POA”. Public POAs may be done in Brazil, or in a Brazilian consulate or embassy as long as the grantor is a Brazilian citizen. For foreign citizens, whenever doing a POA abroad, some very specific steps in their home countries for a POA to be acceptable by the registration office in Brazil.
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11. Pay Registration & Taxes

    Before the closing, you will be required to pay the main transfer tax known as ITBI or “tax over the transfer or a real estate property”, which is around 3% and is set up at the city level. Other taxes and fees apply. As a rule of thumb you may want to provision 4% to 5% of the property value for these costs.
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12. Attend Closing, Pay Balance, and Record Deed

    The closing will usually take place at the registration office in charge of the “Escritura”. For the closing to happen, the fees and taxes will have to be paid and confirmed previously and all the required clearance certificates filed with the registration office.Some registration offices will read aloud the “Escritura” document and then ask for the parties to sign it. In our practice, it is only at this stage that we release the payment to the seller.
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