Title: Chapter%206:%20In%20This%20Chapter
1Chapter 6 In This Chapter
- Introduction
- Foreign ownership
- Financing
- Commercial real estate
- Residential real estate
- Rental property
- Licensing and brokerage
- Government
- Legal system
- Economy and business
- Taxes and fees
- What you need to know
- Beyond the basics
- Key contacts
2Map of Brazil
Source CIA World Factbook
3Introduction to Brazil
- Portuguese is official language
- Strong economy
- BRIC nation
- Energy
- Diversification necessary
- Non-renewable reserves
- Energy efficiency and renewable energy
4BrazilThe Rich Tapestry
Source Wikipedia
5BrazilThe Rich Tapestry
Source Wikipedia
6BrazilThe Rich Tapestry
Source Wikipedia
7BrazilThe Rich Tapestry
Source Eyes on Brazil
8Foreign Ownership of Real Estate
- Restrictions on
- Borders
- Some coastal lands
- Rural properties
- Additional restrictions on agricultural land in
2010
9Financing
- Expansion of mortgage market
- Increased protections for lenders
- Expanding middle class
- Government subsidies
- Foreign residents may obtain mortgages but face
difficulties - Cash transactions still common
10Commercial Real Estate
- Strong market
- Lots of construction
- Market drivers
- Sports events
- Growth Acceleration Program
Source FIFA
Source Rio 2016
11Residential Real Estate
- No official data
- Construction, prices, and sales up according to
reports - Disagreement among analysts over existence of
bubble - Second-home market
- Minha Casa, Minha Vida
Global Demand for Luxury Second Homes
Source Knight Frank and Itacaré Capital
12Rental Property
- Pro-landlord
- Varies by state
- Caseload makes evictions lengthy
- Leases
- Professional property management in demand
13Licensing and Brokerage
- Licensing required
- Listings
- Transaction process
14Realtor.com/international
15What You Should Know About Government
- Federal presidential democratic republic with
executive, legislative, and judicial branches - Current constitution enacted in 1988 to
democratize the country - Mostly pro-market policies to foster growth
should continue - Some instances of protectionism, however
16Legal System
- Civil law system
- Contract disputes adjudicated at state level
- Judge decides all civil cases
17Economy and Business
- Diverse economy
- Some challenges related to declining demand for
commodities - Sociopolitical pressures to improve living
standards - Brazil costs
- Still one of the top places to invest
- Technology and communications
18Real Estate Taxes and Fees
Real Estate Taxes and Fees Real Estate Taxes and Fees Real Estate Taxes and Fees
Tax or Fee Amount Paid by
Transfer Tax 2-4 Buyer
Notary Fee 1-2.5 Buyer
Land Registry Fee Approx 0.75 Buyer
Legal Fees 0.5-2 Buyer
Agent Commission 6 Seller
Municipal Property Tax 0.3-1.5 Owner (Buyer)
Federal Rural Property Tax (some properties) 0.03-20 Owner (Buyer)
Source Global Property Guide, International
Living, Pathfinder Ltd.
19Business and Income Taxes
- Individual income tax
- Residents Progressive up to 27.5 on worldwide
income - Nonresidents 27.5 on earned income, 15 on
other income on Brazil-sourced income only - Business income tax
- Combined rate of various taxes 34
- Withholding tax
- Interest 15 for nonresident corporations
- Royalties Generally 15
- Capital gains
- Individual 15
- Business 15 on nonresident corporations on
investments registered with Central Bank - Value-added tax
- Federal average of 20
- State 7-25
- Other taxes
20What You Need to Know
- Strong, diverse economy with some challenges
- Mortgage market growing but difficult for
foreigners to obtain financing - Commercial market drivers
- Sports events
- Growth Acceleration Program
- Residential market on the rise
- Professional property management in demand
- Licensing and CRECIs
- MLSs RedeSecovi de Imóveis and Redimob
- Technology and communications
- Mostly pro-market policies but some instances of
protectionism
21Beyond the Basics
- Greetings
- Attire
- Appointments
- Business practices
- Business dining
- Taboos
- Visas
22Key Contacts
- SECOVI-SP
- COFECI
- Brazilian-American Chamber of Commerce
- Brazil-U.S. Business Council
- USA Embassy in Brasília
- USA Consulate General Rio de Janeiro
- USA Consulate General São Paulo
- USA Consulate Recife
- Brazilian Ministry of Tourism