Searching for Investment Property in Brazil as a Foreigner
As the Brazil property market has witnessed significant gains in recent years, so has the amount of accompanying search and other property-related services that aim to serve the ever-growing buying public. For the global investor, whilst such increased choice is always welcomed, making decisions amongst a myriad of so-called ‘trusted’ sources can often seem like a nightmare.
These days, whilst the marketplace is largely catered for Brazilian residents, overseas real estate buyers are noticing an increasing amount of professionals operating in the industry that are able to fully communicate in English (particularly in the south) – many of whom are keen to establish ties with the international investment community. European investors (particularly Spanish, Italian and French speakers) will also find several linguistic overlaps which will help overcome what can be barrier to doing good business.
Our recommendation for the best place to start your online Brazilian property search would be the ‘Zap‘ website which serves most of the country and has daily updated listings of asking prices as well as descriptions, advanced searches, photography, map links, financial simulators and other useful features (please see an interview we did with André Molinari, CEO of ‘Zap’ by clicking here). Other prominent sites worth viewing include Balcão, Imovel Web, Lopes and Web Casas. However, it should be remembered that most town and cities would have independent organisations that do not necessarily need to advertise on these major sites due to having enough business in the local community. It is well worth communicating with these smaller operations as well as to keep an eye out for private sales (where a decent price may be able to be obtained as a result of the vendor avoiding agency fees).
One of the main problems with respect to an investors ability to undertake due diligence, is the country’s current lack of a formal registry. One methodology is to examine local government property tax records (Imposto Predial e Territorial Urbano, IPTU) where values are regularly updated – however some states do not allow for public access to this information. The other is to simply keep your ear to the ground; do not rely on the opinion one agent and build relationships with other professionals so you can get a solid idea of real prices (which have not been inflated simply due to the fact that you are a foreign buyer).
Whilst buying ‘blind’ in Brazil is generally not recommended, it is not an unheard of practice in the country – particularly for investors who are buying ‘na planta’ or pre-construction property. As this strategy of investment currently remains one of the most popular for foreigners, there are a number of points to take on board to ensure a safe purchase:
- It should be stressed that, as a foreign buyer in Brazil, you are awarded exactly the same property rights as a resident;
- Be aware of ‘hidden’ charges / obligations during the construction process such as capitalized interest and commanded clauses (your lawyer will be able to inform you of these);
- Understand your rights with regards to completion delays and correct adherence to construction standards / specifications (you are well within your rights to seek compensation and even punitive damages);
- Ensure that any complaints or issues with regards to the build are documented and filed – the Brazilian Code for Consumer Protection (Código de Defesa do Consumidor) allows that a buyer can request a complete termination of the contract (accompanied by a full refund of any monies deposited) or make a legally enforceable claim to receive a discount on the contractual purchase price;
- All contractual agreements are professionally translated into your own language – there are many international law firms who will be able to assist you with this.
