Money Transfers to Brazil

[JMBroad]

Normally the developers paying 10% "normal" commissions are the ones offering gringo prices or those which don't have all the legalities in place so offer more of a carrot - bit like david copperfield - wiggle this hand here - to distract you from what this hand here is doing.

As Robh says, the "norm" in Brasil is not 10%. At least not on the developments we consider worthy of note for investors.

[RalphJ]

Originally Posted by JMBroad

Normally the developers paying 10% "normal" commissions are the ones offering gringo prices or those which don't have all the legalities in place so offer more of a carrot - bit like david copperfield - wiggle this hand here - to distract you from what this hand here is doing.

As Robh says, the "norm" in Brasil is not 10%. At least not on the developments we consider worthy of note for investors.

Well that's good to know....truly. Because I never had any intention of offereing a commission that to me is absurd. 5% is more in line with what I'm willing to offer.

[Dotty]

To move money from a property sale which you have sold in Brasil to Europe you normally pay about 25%+ for transfer.You will need to show all proof of payment,Banco de Brasil (Central) evidence of bought and sold transaction to see where this money has come from.

So before buying consider all your taxes on top and if you try to skim through passport control with it then you will be stashed in prison or bumped off,like the guy in Sao Paulo a couple of years back.

Originally Posted by JMBroad

Gee, you can do a search on the forums to get more detailed information but basically the summary is this:

1) Any money you pay for your property should be sent to Brazil either directly by you or in your name (and with you having proof of this).
1a) Reason for the above Nr 1 - When you come to sell, you can only take the money out of Brazil if you can show that you invested it in Brazil in the first place
1b) Second reason is so that you can apply for a investors visa if you invested enough and if you want to which will allow you to travel back and forth to Brazil.

The money has to be sent to the Banco Central do Brasil, and the person who collects the money has to prove what the money is for, in the case of real estate investment by providing the title deeds or promissory contract.

Even if the developer is from Europe, the money has to be sent in your name to Brazil. I do know that there are some exceptions where developers charge a percentage of the property value in Europe to cover marketing expenses.

I've checked the legality of this and it is legal and above board - it's just whether you are happy with doing that or not. Ultimately it is your decision whether you are comfortable with that or not. If you are, you have to realise that the percentage paid in Europe won't be on your title deeds in Brazil.

[PAUL-brasil]

Originally Posted by RalphJ

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.

Totally agree with you Ralph, but in addition to this using your example above, you have £90K on the deeds saving a whopping £300 at the 3%, then you come to move your money out of Brazil and sell 3 years later say £150K, there s 15% capital gain £60K instead of what should of been £50K, thats 15% on that extra £10K, thats £1,500 - £300 you saved, £1200 down instead doing of doing it the real way!

[RalphJ]

Originally Posted by PAUL-brasil

Totally agree with you Ralph, but in addition to this using your example above, you have £90K on the deeds saving a whopping £300 at the 3%, then you come to move your money out of Brazil and sell 3 years later say £150K, there s 15% capital gain £60K instead of what should of been £50K, thats 15% on that extra £10K, thats £1,500 - £300 you saved, £1200 down instead doing of doing it the real way!

You're right Paul. And then one has to keep in mind the fact that even if he puts a fake price on the deed, and when he sells puts another fake price to avoid taxes, one still has to justify this money to banco central when sending out of Brazil........so where did this money come from? How does one justify the amount of money coming out of brazil when he/she declared a lower value?