Useful Information about Brazil
Now is the perfect time to research an investment property in Brazil. Property prices are low and look set to rise as the Brazilian property market and supporting infrastructure continue to mature at a very steady pace. Expert researchers for the UK-based Property Investor and Homebuyer Show reinforce this view and are forecasting Brazil as an emerging country poised on the verge of a property boom.
Low cost of living
The cost of living in Brazil is much lower than in most European destinations and currently stands at 20% of that in the UK. As a result, the cost of maintaining and managing your property is very low and it is small wonder that Brazil is also increasingly popular as an expatriate retirement haven.
Booming property market
Property in Brazil currently sits on the brink of a boom period while investment growth is inevitable in Brazil, especially in locations by the sea and in north east Brazil. Worldwide property investors are now turning their attention to Brazil as it fast becomes a leader in the field of emerging markets. Returns on investment are considered to be excellent and investors are increasingly aware of the high growth potential that Brazil offers as a stable though fresh, new investment market.
Property purchase specifically as an investment vehicle is a popular option amongst those aiming to capitalize on the excellent growth potential of property in Brazil. This type of investment can consist of an off-plan purchase for sale prior to project completion. Alternatively, a buy-to-let situation can provide reliable rental income from the property, along with substantial capital appreciation.
Capital growth
Brazil is classed as a new emerging property market, which puts potential growth figures at their highest at present. Over the past five years, Brazil property has seen prices increase of some 20%. Last year, in some areas of north east Brazil, returns of 20%+ were not uncommon. According to experts, Brazil is expected to be self-sufficient in oil reserves within the next year and it is believed by some economists to be amongst the worldwide leaders of the future, along with Russia, India and China. Brazil proves to be a truly viable holiday destination. It is a promising buy-to-let investment location by virtue of its world-class transport infrastructures that are more than ready to cater for an increased influx of tourists
Site Seeing
Brazil boasts a wealth of interesting sights for visitors to enjoy while much sightseeing is based upon the stunning natural beauty to be found here. The Amazon Rain Forest hosts thousands of rare species, flora and fauna, indigenous tribes as well as sheer wilderness. Dramatic water falls can be enjoyed at Iguaza and the Pantanal Swamps offer a plethora of wildlife and plant species to be admired by the adventurous visitor.For a less intrepid experience, the famous Copacabana Beach, stretching three miles in front of the densely populated city of Rio de Janeiro is a must and offers an exciting and vibrant atmosphere with a lively street culture. Brazil boasts some 7,000 km of beautiful white sandy beaches and crystal blue sea, along with exotic vegetation and palm trees which continue to attract growing numbers of visitors each year. Brazil’s climate is ideal for many people. Split into four distinct climates, it can offer something for all tastes while offering year-round sunshine, with average summer temperatures of 21°C.
Tax Information
Due to the in-depth nature of the system, it is important that you consult an expert tax advisor when considering your purchase in Brazil. Here you can obtain a brief guideline to Brazil's property tax system.
Tax on Rental Income
Tax is charged on worldwide income for residents of Brazil at 15%, although some foreign tax relief and credits can be allowed under specific tax treaties.
Mortgage interest is not deducted when calculating taxable rental income.
Capital Gains Tax
Non-residents are normally subject to a flat rate of 15% on gains from property in Brazil.
Note: Various tax treaties could affect the tax rates described above.
VAT
The circulation of merchandise is subject to tax, as are transportation and communication services. This is similar to VAT in other countries and is set at a rate of 18%, with more specific rates for some goods (for example, 25% on luxury goods).
Inheritance/Wealth Tax
Brazil has no inheritance or wealth taxes. However, some states may impose a death transfer and a donation/gift tax.
Stamp Duty
Privately owned offices called Cartórios provide notary services as well as registers of real estate deeds. These cartórios charge from a few cents for simple certified copies to thousands of Realis (R$) for property deeds. Included in the fees for real estate transfers are transfer taxes which vary from 2-4% of the declared value. Cartórios are also responsible for the registration of births, marriages and deaths.
Municipal/Local Tax
Municipalities may charge a service tax on certain businesses or real estate transfer tax (2% on transfers of real estate). An annual urban real estate tax for property owners is also applicable at approximately 0.6% of the assessed value of the property, but this will vary according to the municipality concerned.
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