A significant problem that can come into play Keith is that if things don't go right and one has to enter the court system here in Brazil then the TOTAL amount paid, or total sales amount must be on the contract of buy and sell or promise of buy and sell. When one buys a piece of land, or an apartment, house, etc, in Brazil through a foreign agent you're normally talking about 10% commissions and that money would be totally lost if not in the contract of buy and sell and also if you don't have proof that it was sent to the seller.
The amount of taxes that one would save on not sending the real, actual purchase price to Brazil would be minute and certainly wouldn't justify taking a chance if things go pear-shaped.
Take for example if someone buys a property for 100,000 GBP. He/she pays approximately 3% transfer taxes at time of deed transference if the property is not deemed "terreno da marina" or "land by the sea", so he would pay 3,000 pounds. Assume you pay the 10% commission in Europe, your contract of buy and sell and your deed will now have a purchase price of 90,000 GBP instead of the real value of 100,000. You will now pay 2,700 GBP at time of deed transfer. So, for 300 GBP one is going to take a risk of losing 10,000 GBP if things go pear-shaped....all to save 300 pound? Not a good idea Keith and I strongly wouldn't recommend that anyone do that.
As far as yearly property taxes, or IPTU, the value on the deed, or escritura, means absolutely NOTHING. Property taxes are calculated by an evaluation done by the local prefeitura (city hall). I can put a value of 100,000 reais on the escritura, or deed, to my house if I wish, which cost me a little over a million to build, including land, but I'll guarantee you that the prefeitura will evaluate it at a value of at least 500,000 reais. The values the prefeitura puts on property for IPTU are always a good bit lower than actual market values.
|