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Brazil Property Guide: Key Facts and Markets                                 

Tenure and Ownership

Foreigners can purchase land and property in Brazil in their own names on a 100 percent freehold basis; this is rare for an emerging market. Ownership of property in Brazil is an absolute and exclusive right as set out in the Brazilian constitution. In addition to sole ownership, it is also possible for property to be owned jointly by several persons at the same time through a form of co-ownership or condominium. A common form of co-ownership is purchasing property through a company, which can provide tax benefits.

Densely packed condos and offices in Ipanema—long-famous for its beaches

Ownership of property in Brazil is restricted in some specific instances. For example:

• If the land is situated in or near areas of national security or in nationally protected reserves
• If the land is situated near the coast—The first 33m of land from the high tide line (known as the Zona Marinha) technically always belongs to the Brazilian state. However, it is possible to obtain private use of this land by paying a small annual occupation tax to the government.
• If the land is situated near borders with other countries
• If the land is zoned as “rural land”—Foreign purchasers may only acquire rural land if they come to live in Brazil within 3 years from the date of purchase. Additionally, rural property acquired by foreign companies must be used for agricultural, industrial or settlement projects related to the company?s purposes.

Property rights

Both property rights and title are secure in Brazil. The Brazilian constitution is based on the U.S. Constitution and applies similar laws to guarantee property rights. Property owners will receive title once it has been authenticated and recorded by the land registry of the Brazilian Federal Government. Real estate registration in Brazil is well-developed and safe, and each piece of real estate can only be registered at a single registry which keeps the entire commercial history and the physical identification of each property. Access to this information is publicly available and in the larger cities these services are accessible electronically. However, property rights in Brazil are sometimes curtailed in practice through squatters.

Titles and registration

The only way to be 100 percent certain that your Brazilian property is totally yours is to make sure not only that you obtain the title deed to the property but also that you register this with the official Real Estate Register (Registro de Imoveis) held at the notary office (cartorio) of the town where the property is located. Registering the title deed makes it legally binding with regard to any interested third party. If you buy land or property from an owner who has no title deed, you need to establish that the owner really is the owner through establishing a clear chain of ownership over the last 20 years—this will require the help of a very thorough lawyer.

Real estate registration in Brazil is well-developed and safe, and each piece of real estate can only be registered at a single registry, which keeps the entire commercial history and the physical identification of each property. Access to this information is publicly available and in the larger cities these services are accessible electronically. All land in Brazil that is not productively used by the owner can be claimed by people who permanently live on and productively use it. This mostly applies in rural contexts where large neglected estates are occupied by homeless farmers who over time obtain the legal right to stay on the grounds (a posse) but not the title deed (escritura). A buyer should ensure there are no such posseiros on the land (people who might in future claim legal right of occupation) at the point of sale. Buyers should also check that a group known as the Movimento sem Terra (MST, literally "landless movement") is not active near the plot you are buying, as they target unused estates and occupy them, often by violent means.

Lush mountains and developments on the outskirts of Rio de Janeiro, Brazil

Mortgage finance

One of the main drawbacks of investing in Brazil is the lack of mortgage finance. There are occasionally developer-funded deals on offer on a fairly short-term basis (such as 5 years), but these tend to be at fairly unattractive rates of interest. In any case, exchange rate concerns might put some investors off a local currency mortgage. Consequently, the main options for foreign investors are to remortgage at home or to buy in cash.

Key Property Markets

Rio de Janeiro Rio is popular with investors for its tourist and business appeal. However—as with many of Brazil's big cities—Rio's property market doesn't offer the same capital growth potential as the emerging markets outside the more famous locations.

Sao Paulo’s property market is beginning to boom due to an influx of both Brazilian and international companies relocating to the area.

Northeastern Brazil is the country?s main “sun and beach” destination, where Brazilians head for their holidays. With a yearly average temperature of 27 degrees and year-round sunshine, it enjoys the best climate in Brazil. It is also the closest point in Latin America to Europe, with a flying time of approximately seven to eight hours. It is also the part of Brazil that is receiving most international property investment and tourist development. However, with thousands of kilometres of coastline to choose from, the trick for investors is picking the right spot. Investment hotspots include Fortaleza, Natal, Recife, Salvador and Porto Seguro.

For statistical, demographic and economic data, see the Brazil Fact Sheet.

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