Property Sales Process | Selling Costs

Overview:

In Brazil, vendors must bear the following costs when selling property:

Taxes

Capital gains tax

Legal fees

Notary fees (normally paid for in full by the buyer but the vendor will pay in some exceptional situations)

Other costs

Estate agency fees
All costs in connection with the property up to the completion date (e.g. utility costs)

Capital gains

When real estate is sold in Brazil, vendors must pay tax on the capital gains they have made based on the property’s increase in value over the course of their ownership at a flat rate of 15%. This applies to residents and non-residents alike in accordance with Brazilian legislation. However, in practice sales prices amounts are often understated in the public title deed to avoid or minimise capital gains tax liability. Moreover, a new tax law has recently been introduced, exempting property sales from capital gains tax in the instance where the proceeds are reinvested in another Brazilian property, although this is limited to a declared value of up to 180,000 reais.

Estate agent’s fees

Intermediation during property sales in Brazil can only be carried out by an accredited real estate agent. The estate agent’s commission is nearly always paid by the vendor, except in exceptional circumstances. Their commission rate (a percentage of the sale or rental value) is determined by the legislation of the local region, through the Real Estate Agents Regional Councils (CREI). Agents’ fees normally charge between 5 and 6% of the purchase price. In new projects, real estate agents often receive only 3 to 4% from the developer.

Contents