SPAIN, Dec 02 — Following the addition of Brazil onto the international real estate investment scene, no end of interest in the region has been generated. Brazil tends to check all the boxes as a suitable property investment and holiday home destination. It even appears that the traveling distances are overlooked by many buyers, as the tropical paradise location is worth the effort to reach. Property prices remain competitively low prior to the expansion of the local mortgage market to non-resident buyers
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ollowing the addition of Brazil onto the international real estate investment scene, no end of interest in the region has been generated. Brazil tends to check all the boxes as a suitable property investment and holiday home destination. It even appears that the traveling distances are overlooked by many buyers, as the tropical paradise location is worth the effort to reach. For investors the low priced property, consistently strong capital gains and high rental demand are all rolled into an idyllic setting. Brazil has tempted many prospective buyers over recent years and long term growth and interest in the market shows no sign of slowing.
The additional benefits of the 2016 Olympic Games and the 2014 FIFA World Cup only add to the growth and demand for investing in the country’s real estate market. The Brazilian government is encouraging foreign investors, especially into the stunning North Eastern coastal regions such as Natal. As Brazil has a strong economy with the potential to become a world superpower, the country is not reliant upon foreign real estate investors for economic stability. The active encouraging of foreign investment brings an additional touch to the friendly nation.
The use of a solicitor specializing in the Brazilian real estate market is highly recommended. While not a legal requirement, the additional security and easing of the purchasing process is invaluable. The lawyer will work with the buyer throughout the purchase, tracing a procedure in the following manner for an off-plan or under construction property. Once the property to be purchased has been sourced, a reservation deposit of approximately £2,000 or €3,000 is placed with the agent or developer to take the property off the market. There is normally a 21 to 28 day time frame between the reservation deposit and initial staged payment, during which time the buyer’s legal representative will carry out due diligence on the property. Searches carried out by the solicitor will include planning permission, building licenses, land titles, land surveys and bank guarantees. From this information the lawyer will inform the buyer whether the property represents a safe purchase.
A Private Purchase Contract will also be created, outlining the obligations of both the buyer and seller during the course of construction, along with the dates and amounts of the payment schedule. The initial staged payment will be required upon signing the Private Purchase Contract and will be calculated to a percentage amount of the sale price. The staged payments will vary between developers and different projects. The required payment schedules may also vary depending upon the stage of construction the development is under when entering the purchase agreement.
Often these payments will amount to between 10% and 30% of the purchase price. Staged payments may be either staggered throughout the course of construction, or the remaining payment may be required entirely upon completion. At the completion stage of the project, along with the remaining payments, the associated purchasing costs will be required. Associated costs when purchasing property in Brazil include Transfer fees, Notary fees and the legal fees. All together the associated purchasing costs amount to approximately 6.5% of the property price. Often the solicitor will request 50% of the legal fees to be paid upon contracting their services, with the remaining payment upon completion.
The idyllic tropical destination with an abundance of stunning beaches represents an exceptional investment and re-location market. Property prices remain competitively low prior to the expansion of the local mortgage market to non-resident buyers. The expansion of the mortgage market is expected to attract additional buyers, bringing up property prices and increasing returns on investment.
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