Brazil Counsel Guide:
Selling Real Estate

If your Brazilian property no longer aligns with your plans, it may be time to consider selling. Whether your real estate investment in Brazil didn’t yield the expected returns or you’ve inherited a property you don’t wish to keep, navigating the sale process as an American individual or company doesn’t have to be a challenge.

This Brazil Counsel Guide to Selling Real Estate offers a step-by-step roadmap tailored to help Americans effectively transfer ownership of Brazilian property. From attracting both local and international buyers to addressing frequently asked questions about due diligence, required documents, sale process, and associated costs, this guide is your comprehensive resource for a smooth and successful transaction.

Finding a Buyer

Think back to the steps you took when purchasing the Brazilian property you now wish to sell. The guidance from our Brazil Counsel Guide to Buying Real Estate may have helped you identify the ideal property at that time.

When selling your property, consider that potential buyers might follow steps similar to yours when searching for real estate. By marketing your property effectively, you can ensure it stands out to buyers who take those same steps.

However, challenges remain as not all buyers use the same methods to search for properties. How can you reach the widest possible audience? And, how can you determine a competitive listing price that ensures a profit or at least recovers your improvement costs?

Online platforms and professional realtors are helpful resources when listing your property. Websites like ImovelWeb, ZAP Imóveis, and Viva Real function similarly to Zillow or Realtor.com, offering search filters to compare your property with similar listings or tailor your offer to match buyer preferences. Licensed realtors, registered with the Conselho Regional de Corretores de Imóveis (CRECI), can present your property to interested buyers and help you determine a fair listing price. Some realtors also offer staging services to enhance your property’s appeal. Just remember to verify their CRECI registration number online - São Paulo and Rio de Janeiro have tools to facilitate this process.

Due Diligence for Your Peace of Mind

Performing due diligence as the seller is generally less extensive compared to the precautions that buyers should take. For example, as the current property owner, the seller doesn’t necessarily need to obtain a transfer history certificate (matrícula) or the public deed (escritura) from the notary office to confirm the absence of debts, liens, or other encumbrances. The same applies to other property-related documents, such as the property tax certificate from the municipality or, for apartments, the declaration from the condominium association.

However, it’s still recommended to conduct research about the buyer’s profile and their financial and legal standing. Before signing any sale agreement or public transfer deed, you’ll want to ensure that the transaction is secure and that the buyer is reputable and will fulfill their obligations, particularly payment.

Whether the buyer is an individual or a legal entity, begin by obtaining tax certificates. Federal, state, and municipal tax authorities in Brazil can issue certificates relating to any outstanding personal or corporate tax debts. These certificates are generally available online and free of charge. Below is an example of a “clean” tax certificate from the Brazilian Revenue Service (Receita Federal) with no tax debts listed.

You may also want to obtain certificates issued by federal and state courts to identify pending lawsuits or court judgments related to civil, criminal, creditor, or labor matters. Reviewing these records could show hidden legal issues that might affect the transaction.

Although sellers aren’t required to obtain some of the usual property documents, other requirements may apply depending on the property’s location. For example, if you are selling a foreiro property (i.e., located near the coastline where the federal, state, or municipal government holds partial ownership), you must ensure that all foro and laudêmio fees have been paid and that formal government authorization has been obtained before any transfer of title. Foro is an annual fee, while laudêmio is a one-time transfer fee, and both are paid to the relevant government authority.

The bulk of due diligence in a real estate transaction falls on the buyer, but this doesn’t mean sellers should neglect to protect their interests. If you need assistance, local law firms and service companies can provide valuable support. The Brazil Counsel Real Estate Due Diligence Package also offers the main documents for real estate transactions and insights into the information they reveal.

What’s Expected in the Sale Process

  • The Promise to Buy and Sell: A Private Contract

In Brazil, it’s not unusual for the purchase and sale of real estate to begin with a Promise to Buy and Sell (Promessa de Compra e Venda). This is a private, legally binding agreement that identifies the parties, the property, and all the deal terms, such as the price and method of payment.

Although not mandatory, signing a Promise to Buy and Sell can be beneficial. For example, imagine you’ve found a serious buyer, but the two of you haven’t discussed the details yet. A Promise to Buy and Sell can lock both parties into the deal and provide written terms specifying how the seller will be paid and when the buyer will take possession of the property. Additionally, this type of contract can help address challenges associated with the limited availability of escrow services for real estate transactions in Brazil.

It’s important to note, however, that a Promise to Buy and Sell merely establishes a contractual right; it does not transfer ownership of the property.

  • The Public Deed

The first step in transferring real property in Brazil is signing a public deed (escritura) at a notary office (Tabelionato de Notas).

Not being physically present for the signing is less of a concern nowadays. There are a few options to facilitate the process. Many notary offices now offer remote signing services, so consult with the office handling your deed to see if they have a system that allows you to sign the document from your location. Alternatively, you can grant a public power of attorney to a trusted representative or use the e-notariado system.

  • Registration of the Transfer

The next step in transferring real estate in Brazil is registering the signed deed in the transfer history certificate (matrícula), which is filed with the local real estate notary office (Cartório de Registro de Imóveis). If you do not sign the deed and complete the registration with the real estate notary office, title to the property won’t be legally transferred to the buyer. This means you’ll still be the owner,  regardless of any other actions taken during the transaction.

Both an escritura and an updated matrícula are always required for a complete sale and legal transfer of Brazilian property. Otherwise, the seller will remain responsible for all aspects of ownership, including fees and taxes.

  • Documents

Below is a list of documents that notary offices in Brazil typically request from foreign individuals and companies involved in the sale of property. Since this list isn’t exhaustive and requirements may vary, always refer to the particular notary office managing your transaction for a complete and accurate list of documents.

Keep in mind that foreign documents must go through a validation process to be accepted in Brazil. This includes notarization, apostille certification, translation into Portuguese by a certified translator, and registration with a notary office (Cartório de Registro de Títulos e Documentos).

➢ Passport: It’s required when the individual doesn’t have a Brazilian ID.

➢ Brazilian CPF or CNPJ: It’s the national taxpayer ID number for individuals and legal entities. HERE is a step-by-step for foreigners to get a CPF from a Brazilian Consulate in the United States. There isn’t an online option for companies to get a CNPJ.

➢ Marital Status Documents: It’s the Birth Certificate or the Marriage Certificate. If married out of Brazil, you may need to Register Your Marriage. If ever divorced, you’ll need to provide your divorce certificate, divorce decree, or marriage certificate updated with an annotation referencing the divorce. Always provide your most up-to-date marital information because Brazilian notaries need to know whether spouses ever changed names and determine if both spouses must sign the deed based on their marriage regime.

➢ Corporate Documents: It’s the Articles of Incorporation or the Bylaws. Sometimes, specific resolutions or powers of attorney may also be required. The Brazilian notary ultimately wants to confirm signature authority on behalf of the entity.

➢ Power of Attorney: It’s the document you grant to a third party to sign the deed on your behalf. The issue, however, is that Brazilian law requires a public power of attorney for real estate transactions, and a public PoA is prepared by either a Brazilian notary or a Brazilian consular official. Brazilian Consulates will only issue public powers of attorney to citizens and residents of Brazil.

➢ ITBI Payment Confirmation: It’s the municipal property transfer tax which payment is usually required from the buyer. Notaries require the payment receipt before finalizing the public deed and registering it.

  • Costs

Payments required from the seller in a real estate transaction often depend on specific agreements and circumstances.

➢ Notary Fees

If negotiated with the buyer, the seller may be responsible for the notary fees associated with preparing the public deed (escritura) and issuing the updated transfer history certificate (matrícula). Otherwise, these costs are typically borne by the buyer.

➢ Realtor Fees

If the seller used brokerage services - for instance, to list the property or find a buyer - there’ll be realtor fees. In Brazil, realtors charge a percentage of the transaction price, which varies by state. In São Paulo, this percentage ranges from 6% to 8% for urban properties.

➢ Capital Gains Tax

If the property is sold for a profit, the seller must pay capital gains tax, a federal tax due on the profit from the sale. The tax rates starts at 15% for gains up to BRL$5,000,000 and increases incrementally, reaching 22.5% for profits exceeding BRL$30,000,000. However, if the seller is a company based in a jurisdiction classified as a tax haven under Brazilian law, the capital gains tax rate is fixed at 25%.

When seller isn’t a resident of Brazil, the capital gains tax is due and must be paid on the date of the sale. The buyer is responsible for withholding and paying the tax, unless he’s also a non-resident of Brazil. In such cases, the buyer must appoint a resident attorney-in-fact to handle the tax payment.

➢ Transfer Fee (laudêmio)

In the case of a foreiro unit, the seller needs to obtain a calculation of the laudêmio fee from the relevant government authority. Payment of this fee and issuance of a transfer certificate are required before the property transfer can proceed.

➢ Recurring Payments

As the former legal owner of Brazilian real estate, the seller doesn’t need to worry about recurring payments such as the annual property tax (IPTU) and the usual utilities, maintenance, condo fees, or insurance - provided the buyer has transferred all bills and invoices into their name.

  • Payment

Receiving payment from the buyer should be straightforward, but it’s reasonable to expect some challenges, especially since the sale of Brazilian property by an American often involves an international transaction.

One key factor is the difference in currencies between Brazil and the United States, as well as the transfer of funds from one party to the other. You’ll need to decide whether you are willing or able to work exclusively with the Brazilian real (BRL). If not, keep in mind that the local currency will need to be converted into US dollars (USD).

The exchange desk of commercial banks or brokers facilitates currency conversion through a foreign exchange contract, as required by the Brazilian Central Bank. However, this process involves several costs such as the exchange provider’s spread, processing fees, and potential intermediary bank fees. In addition, there’s a 0.38% IOF (Imposto sobre Operações Financeiras, a financial transactions tax). These costs are deducted from the funds being converted and transferred, so since exchange rate fluctuates constantly, you’ll need to ensure that the final amount received is correct after all deductions.

While handling payment is generally the buyer’s responsibility, it’s crucial to be cautious. If, for any reason, you sign the public deed and the transfer history certificate is updated before receiving payment, you effectively lose both the property and the money.

Moving On

Selling real estate in Brazil as a foreigner is not unusual. If you’re considering to do it completely or partially by yourself, have this guide at reach to reference whenever you need a reminder of the essential steps and considerations for a successful sale.

Regardless of why you no longer want Brazilian property in your portfolio, taking the time to understand the local market and legal landscape is crucial for a successful transaction. And remember, you don’t have to navigate this process alone - there are many resources and services available to assist you.

Written by Greg Barnett and Erick Souza
Updated as of 6 January 2025