Brazil: How To Aquire Real Estate In Brazil?

I. Introduction

Under Brazilian law, questions relating to property are governed by the law of the place where the property is situated (lex situs). Thus, it is the law of the place which has competence to classify property as movable or immovable, and to determine whether it may be the subject of a right in rem. Hence, real property situated in Brazil is subject to Law No. 3.071, of January 1, 1916 (the "Brazilian Civil Code") to determine the rights and liabilities of neighbors, encumbrances relating to adjoining properties, grounds for expropriation of property by public authorities, the means of transfer, etc. Both possession and ownership are governed by lex situs.

The same principles govern rights in rem over the property of third parties (e.g. emphyteusis, easements, usufructs, use, habitation, income payments due on real property).

Pursuant to the Brazilian Civil Code, assets are divided into two broad categories - movable and immovable. Immovable properties comprise land together with its surface, and all things attached to or forming part of the land, the air space above the land and the subsoil. However, the Brazilian Federal Constitution enacted on October 5, 1988 (the "Federal Constitution"), restricts the definition of immovable property, providing that mines and products from the subsoil, as well as waterfalls, constitute, for the purposes of exploitation and usage, property distinct from the land. The exploitation of mineral resources and hydroelectric power requires federal authorization or license.

Permanent attachments to the ground, such as seed sown, or buildings constructed which cannot be removed without destruction, modification or damage, become immovable property. Likewise, assets kept by the owner in his property for industrial purposes or otherwise by way of improvement, become immovable property and although physically movable, such assets are transformed and treated as immovable by reason of the use to which they are put by the owner.

Some property rights are treated as immovable property: rights in rem over immovable property, government stock incorporating an inalienability clause, and the right of an heir to inherit property.

Foreign-owned companies face basically the same legal provisions as their Brazilian-owned counterparts. Special conditions may apply to the purchase of property located near the coast or frontiers, in rural areas or certain specific areas designated as being of national security. There are no restrictions for the purchase of property located in urban areas.

II. Possession and Ownership

With respect to real estate properties, two broad categories of rights emerge: the right of possession and the right of ownership, both differing from each other by the following specific characteristics.

(i) The right of possession is the personal right of exercising powers constituting dominion or ownership. Under Brazilian civil law, possession may be gained by the apprehension of the object or by the exercise of the right of apprehension; by having the object at one's disposal or the right so to have it; or by any of the general methods of acquisition. Possession may be acquired by a person claiming it (or by his/her representative or agent) or, subject to ratification, by a third party acting without a mandate, or by constitutio possessorio (by which a person who formerly enjoyed possession in his own name exercises rights of possession in the name and on behalf of someone else, e.g.; where an owner transfers his house to a third party but remains in possession as a lessee). The right of possession comprises the right to institute proceedings to claim possession, the right to receive the fruits (including rents and other income from the property), the right to be indemnified for necessary improvements carried out, and the right to retain the object. The possession of property is forfeited by abandonment, by delivery to a third party, by the loss or destruction of the property, by its becoming ineligible for purchase or sale, by a third party taking possession (perhaps against the will of the person formerly in possession) if the possession is not maintained or reinstated in due time, and by constitutio possessorio.

(ii) The right of ownership is the most important of all property rights and is defined by the Brazilian Civil Code as the right of an individual to use, enjoy and dispose of his goods, and to recover them from whoever may have taken possession of them without due cause. It is an absolute and exclusive right and may belong to several persons at the same time (co-ownership or condominium). The owner may dispose of his property as he deems fit, subject only to certain restrictions imposed in the public interest or out of respect for the property rights of third parties, such as: (a) the right of expropriation of real estate properties by the Public Power against payment of adequate compensation; (b) the restrictions relating to the division of urban land (subdivision or parceling, zone (or planning) and building) as, for example, those restrictions imposed for the establishment of industrial plants in critical pollution zones, the mandatory setback of buildings and the restriction on the number of stories in an apartment block by reference to the location and the size or the plot; (c) the restrictions imposed in the interest of national security, such as the restrictions on the sale of private land within 150 kilometers of the national frontier; and (d) the restrictions imposed in areas considered essential for the defense of the country. There are also further restrictions arising from the local legislation in particular localities and from building covenants as well as restrictions on acquisition of rural land by foreigners.

III. Acquisition and Loss of Ownership

III.1. General Provisions

There are four methods of acquiring a real estate property: (a) by registering a deed of transfer in the appropriate land registry (According to Brazilian law, a sale and purchase agreement does not constitute ownership by the purchaser, but only personal obligations to both parties.); (b) by accession; (c) by prescription and by inheritance. These last three forms of real estate property acquisition are also subject to registration with the appropriate land registry. These are: court orders by which undivided land is divided among different owners; court orders in the winding-up of an estate of a deceased person or the division of property, awarding immovable property to creditors in payment of the debt of the estate; and public auctions and adjudications.

Similarly, orders of separation, divorce and nullity must be registered when immovable and rights in rem which are subject to registration are included in the settlement of property; an order made in a prescription action; and an order relating to land acquired by installments. Prescription is the acquisition by virtue of certain periods of continued possession.

The main grounds for extinguishing real estate ownership are: expropriation (which is the unilateral act of public law, with repercussions in private law, by which individual ownership is transferred to the relevant authority upon payment of fair compensation by the said authority for the benefit of the public); transfer; renunciation; abandonment or destruction of the property.

III.2. Acquisition of Rural Property

Law No. 5.709, of October 7, 1972, which regulates acquisition of rural property by foreign companies authorized to operate in Brazil, envisages to avoid the denationalization of national territory. It provides that foreign companies can only acquire rural property if the purpose is the implementation of agricultural, cattle-raising, industrialization or colonization projects, and that such projects must be linked to their respective estates. Such projects must be approved by either the Brazilian Agriculture Ministry or the Department of Trade and Industry, depending on the project required.

The President of Brazil may, upon specific decree, authorize the acquisition of rural property beyond the provisions of the current law, in cases where such property is the object of priority projects involving the country's development plans.

III.3. General Remarks and Requirements Upon Purchase

The acquisition of a real estate property in Brazil between the purchaser and the seller is generally agreed by means of a contract. Contracts of purchase are in many ways similar to those in Europe and North America, however with many important differences. For instance, there is no equivalent to the English concept of "freehold". If a property is purchased by a single buyer (not in a condominium situation), than the purchaser has absolute title to that area of ground (excluding subsoil which belongs to the State). In addition, the purchaser will be responsible for payment of service charges (in case of a condominium) and property taxes.

In case of multiple ownership (as it is the case of condominiums), where a purchaser buys one or more floors of an office block, the purchase contract will be for a specified fraction of the total building and land and so the purchaser receives perpetual rights to use the floors that he is purchasing. He is, in addition, given proportional voting rights in the administration of the condominium. The legal equivalent for condominium purchase is outright purchase. An owner of part of a condominium has the right to sell his fraction without the interference of the administration of the condominium. However, sometimes there are restrictions on use.

Brazilian law requires, for a sale and purchase transaction, that the parties be both generally and specifically capable to perform such transaction. General capacity relates to the age and mental health of the parties (i.e. that they be over 21 years of age and mentally healthy (or, if not capable, that they be duly represented to perform such transaction). Specific capacity relates to the possibility of the selling party being bankrupt. In other words, a bankrupt person or company is most likely to have a general capacity, but will certainly lack of specific capacity to sell a property.

IV. Taxation

IV.1. Inter-Vivos Transfer Tax - ITBI

Legal entities are subject to Inter-Vivos Transfer Tax ("ITBI") - also assessed by the municipalities - when transferring, for any reason whatsoever, and on a remunerated basis, real property by nature of physical accession, rights in rem to any real property, except those in guarantee, and also assignment of rights for the acquisition of property. The rate established under Sao Paulo Municipal Law No. 11154/91 varies from 2 to 6 percent, depending on the property value.

ITBI is not assessed when the transfer of real property or rights to any such property takes place to pay up the capital of a company or when resulting from any merger, consolidation, spin-off or extinguishment of the legal entity, except if in any of the above mentioned cases, the acquirer's chief activity is the purchase and sale of such assets and rights, lease or commercial lease of real property.

IV.2. Income Tax

Income originated from rental and lease is taxed at the rate of 15 percent. Therefore, the foreign owner of a real estate property located in Brazil shall annually pay a 15 percent income tax over the amount received from its rental/lease.

V. Real Estate Investment Funds

Pursuant to Instruction No. 205, of January 14, 1994, issued by the Brazilian Securities Exchange Commission, real estate investment funds are aimed at developing real estate-related projects such as construction, acquisition of property, investments in projects enabling the growth of the housing and services in both urban and rural areas, for subsequent sale, letting or leasing.

These investment funds are currently being used for the purposes of raising funds for the construction of several Shopping Centers throughout Brazil. Previously, pension funds were direct investors of real estate projects but currently they are investing indirectly, by purchasing shares of property investment funds. Both individuals and corporations resident or domiciled abroad are entitled to acquire such shares, provided that the funds resulting from the investment are duly registered with the Central Bank of Brazil, thereby enabling the return abroad of the respective investment and the gains resulting therefrom.

Capital gains resulting from investments on real estate investment funds are subject to withholding tax at a rate of 10 percent upon remittance of such gains abroad.

The content of this article is intended to provide a general guide to the subject matter. A specialist's advice should be sought in order to provide professional advice on a case to case basis which will meet specific circumstances.

For more information please contact us.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions