Types of Tenure:
Foreigners can purchase property and land in Brazil in their own names on a 100% freehold basis; this is rare for an emerging market.

Forms of Ownership:
Ownership of property in Brazil is an absolute and exclusive right as set out in the Brazilian constitution.  In addition to sole ownership, it’s also possible for property to be owned jointly by several legal 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.

Restrictions:
It’s relatively easy for foreigners to buy land and property in Brazil as they generally enjoy the same rights as Brazilian nationals, even if they’re non-resident.  However, foreigners must first obtain a CPF (“Catastro de Pessoa Fisica”) number before they can buy property.  The CPF number is a tax registration number similar to our National Insurance number.  You can either apply for the CPF online at the website of the Receita Federal or via the Brazilian embassy.

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

• If the land is situated in or near areas of national security
• 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.  When an owner then sells their on this “private use”, the government is entitled to a small percentage (5%) of the value of that right; this is known as the “laudemio”.
• 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.
• Some land in Brazil forms part of protected reserves

Property Rights:
Both property rights and title are secure in Brazil.  The Brazilian constitution is based on the US 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 (see issues section below for details).

Mortgage Finance:
One of the main drawbacks of investing in Brazil is the lack of mortgage finance.  There are occasionally developer-funded deals to be had 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 mortgages.

The main options for foreign investors, then, are to remortgage at home or to buy in cash.

Issues & Risks:
The only way to be 100% certain 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 - the “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’ll need to establish that the owner really is the owner through establishing a clear chain of ownership over the last 20 years via 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 point of sale.  Buyers should also check that the “landless movement” (MST – Movimento sem Terra) is not active near the plot you are buying as this group singles out unused estates and occupies them, often by violent means.

Regulations:
Brazil has a clear and flexible planning context, based on a policy of “high-priority sustainable development”.  However, Brazil suffers from corruption in some public bodies meaning that planning regulations may not always protect the interests of existing owners.

Industry Associations:

• Brazilian Chamber of Commerce
• Brazilian Embassy
• Brazilian Tourism Institute

Key Property Markets:

• Rio de Janeiro is popular with investors due to the city’s 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
• North-eastern 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 all-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 approx. 7-8 hours and is the part of Brazil that is receiving most of 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 at present are Fortaleza, Natal, Recife, Salvador and Porto Seguro.