Buying beachfront land

[Jer]

Anyone have any information regarding obstacles to owning beachfront land?
Property rights? Marine tax? Building restrictions?

Thanks.

[RalphJ]

Originally Posted by Jer

Anyone have any information regarding obstacles to owning beachfront land?
Property rights? Marine tax? Building restrictions?

Thanks.

I own a fairly large tract of beachfront land. Property rights are the same as other lands. You do have an additional tax...."terreno da marinha", it comes out to be around 5% at title exchange, the yearly tax is minimal. The only building restrictions outside of the normal ones are you must get building approval from Ibama (fed) and your state environmental regulatory agency, here it's Adema. And you can't build on the initial 20 meters or so in front of the beach.

[debzor]

And you can't build on the initial 20 meters or so in front of the beach.

I think that might be over simplifying it a little - it might be 20 meters or 220 meters. Depends on where the 'build line' is, in front of which it is illegal to construct any permanent structure. Should the sea reclaim the street in front of you, you are obliged to reconstruct it or donate part of your 'private beach' or marina area back to the community so that it can be rebuilt.

[JMBroad]

Originally Posted by RalphJ

I own a fairly large tract of beachfront land. Property rights are the same as other lands. You do have an additional tax...."terreno da marinha", it comes out to be around 5% at title exchange, the yearly tax is minimal. The only building restrictions outside of the normal ones are you must get building approval from Ibama (fed) and your state environmental regulatory agency, here it's Adema. And you can't build on the initial 20 meters or so in front of the beach.

5% of the "valor fiscal" (fiscal value), which is normally much lower than the sales price?

[RalphJ]

Originally Posted by JMBroad

5% of the "valor fiscal" (fiscal value), which is normally much lower than the sales price?

It's 5% of the value that is on the deed. If you buy a piece of beach front property for 1,000,000 reais, and 1,000,000 reais is the value on the deed, you pay 50,000 reais only for the "terreno da marinha" tax. There is approximately another 3% total of other taxes that you will have to pay as well. So, at title exchange, the purchaser will be obliged to pay approximately 8% of the value on the deed in tax.

Other than that naturally one has to pay yearly property tax, or IPTU. This tax "should" be around .8% of the valuation of your land which is done by the city gov't. Although since I've purchased my land they have been charging me more than 4% yearly. I'm currently suing the local prefeitura, and already won a "liminar", or preliminary decision. I will only pay .8% at the end of this month when I go to pay, and the city gov't. is responsible for not only refunding me what I've overpaid in the last 4 years with interest and monetary correction, but also what the previous owner overpaid over a certain number of years as well.

I think that might be over simplifying it a little - it might be 20 meters or 220 meters. Depends on where the 'build line' is, in front of which it is illegal to construct any permanent structure. Should the sea reclaim the street in front of you, you are obliged to reconstruct it or donate part of your 'private beach' or marina area back to the community so that it can be rebuilt.

You're right Debzor, I did oversimplify it. Sorry for that. I was thinking about here in Aracaju where a road runs in front of the beach. On the beach side of the road naturally no one can purchase...it belongs to Brazil. Although one can get a "licensa" to operate a business...ie beach bar/restaurant. On the other side of the road is raw land and/or condominiums. On this side of the road, we in Aracaju, cannot build on the first 20 meters. But naturally that will differ from place to place and the situation of the land/beach, etc.

[RalphJ]

Originally Posted by RalphJ

It's 5% of the value that is on the deed. If you buy a piece of beach front property for 1,000,000 reais, and 1,000,000 reais is the value on the deed, you pay 50,000 reais only for the "terreno da marinha" tax.

Now, this is the KEY! The value "on the deed", or escritura. And let me tell those interested in investing in brazil that open their own brazilian business, that will be making a "foreign investment in Brazil", be VERY careful in respect to this...the value that is put on deeds, receipts, not receiving receipts, and not only receipts, but one MUST receive a "NOTA FISCAL" when paying for ANYTHING from your business account.

A foreign investor who opens his own business and who is not familiar with the way business is done in Brazil will soon find himself in a precarious position. He will find that when buying land or property people will not want to put the actual sales price(s) on the deed(s). Naturally they do this for tax purposes. I used to think this was sinful but since I wholeheartedly agree with them. Brazil is the 2nd most heavily taxed country on planet earth, and we see very little in return for those tax dollars. This is a WIDELY COMMON practice, it is done by EVERYONE, lawyers, judges, politicians, policemen....it doesn't matter.....EVERYONE does this in Brazil.

The foreign investor will then find this is a common practice not only in buying real estate, but in everything. If you contract an architect, if you go to buy construction materials, if you hire a topographer, to just about anything, people here have an aversion to giving receipts, and in particular, receipts which are fiscally legal with Receipta Federal (a nota fiscal). Normally someone like an architect, if you're going to spend any type of significant monies at all will give you two prices, one with a "nota fiscal" and one without. And these price differences can be as much as 40% in my experience.


Be VERY careful here. A company making a foreign investment in Brazil must account for EVERY SINGLE CENTAVO THAT LEAVES HIS ACCOUNT! In other words, one must have a NOTA FISCAL, or "legal receipt", for every single penny that was paid from his business account(s). It's very tempting to get a 40% discount on a large ticket item...but what do you do afterwards? At the end of the year when you declare your taxes how do you account for this money that has left your account? Well, I won't even discuss the options because they're illegal. And if one doesn't know this going into his investment.....and DEMAND for a legal receipt, or nota fiscal, with each and every purchase from his business account, years down the road he very well may find himself in hot water with Receipta Federal.

[propertyborders]

Hi Guys what price does does small plots of land start from lets say 500 meter start in North Brazil areas, I mean the cheapest prices you have seen?

[JMBroad]

Originally Posted by propertyborders

Hi Guys what price does does small plots of land start from lets say 500 meter start in North Brazil areas, I mean the cheapest prices you have seen?

Cheapest price I've heard of was three years ago - a guy swapped a fridge for a plot of frontline beach land - don't know the size of the plot though and could be an "tall story". Sounded like it until I saw the below:

Today? Well I've seen a plot of aprox. 1000 m2 with an old run down (but not a ruin) house on it - house must have been aprox. 300 m2 which was bought for 35.000 Reais. That works out at 13.509 € or 10.121 GBP. Property was in a lovely location and although there was a town square with lawns and palm trees between it and the beach there were no houses in front of it. Sand was about 100 metres away.