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| :: WHY BUY OFF PLAN |
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| What are off-plan properties? |
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Off-plan properties are properties that have yet to be built. As a purchaser, you may be able to see a show home, but most often, all you are likely to see are the floor plans, perhaps a model of the development, and /or various artist impressions |
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How does buying off-plan work?
Working directly with the developer, we have the opportunity to source property before it is ever released to the general public. This in turn is introduced to you, ‘the investor’ and you are able to purchase the property at the lowest price with a long build time. During this time, the value of the property continues to grow.
What are the advantages of buying off-plan?
People generally buy off-plan as an investment. It could often mean that you put down only a small deposit and the remaining balance is paid quitesome time after signing contracts. |
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Of course, during this time the value of the property could be rising, and you could see a significant growth of your original price; and you will not have invested any more funds. Like any investment, there is an element of risk, but this is minimised by employing our services.
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| Where are the properties you source? |
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We carefully source off-plan properties in a key locations with the end user in mind, ideally close amenities good payment structures and a quality build from reputable developers. |
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| Do I need finance approval before purchasing an off-plan property? |
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For developments with build times of less than 6 months, we do recommend our clients get an approval in principle. With developments having build time of more than 6 months, we put our clients in touch with our financial consultants nearer completion. |
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| What are the risks associated in buying off plan? |
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Like any investment, it’s very important to do your research before you invest. It’s also very important to consider questions like, what are the projected returns and what are the associated risks? For instance, if you're planning on buying to let, what's the market like in the country in which you are buying? Equally, if you're hoping for capital appreciation and rental income, be aware that the two don't normally go together in countries where people traditionally rent their homes.
We at Brazil Property Mart endeavor and take a lot of the headache out of buying overseas by answering many of these questions for you. Our independent reports and advice will assist in you making a confident decision which will no doubt prove to be an excellent investment. |
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| WHY BUY OFF PLAN |
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| What happens if you go out of business? |
In the unlikely event of this happening, your investments are always secure. This is because we act as finders on behalf of our clients, and contracts are always drawn up between you and the property developer. These are legally binding contracts where the developer cannot withdraw from even if we no longer exist. Brazil Property Mart prides itself in conducting business with the greatest ethos, and we would always ensure that our client’s investments are always protected in any circumstances.
If you have any other concerns or questions, please feel free to contact us. We will be more than happy to help. |
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| The purchase process |
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| Preparations |
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| 10 Simple Steps to Purchasing |
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- You need to obtain a Brazilian ID this is called a CPF.
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To get a CPF you need a birth certificate translated into Portuguese by a certifiedtranslatorand legalized by the Brazilian consulate in your home country.
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You make a trip to Banco Do Brasil with your passport and your birth certificate to formally apply for a CPF and pay a small fee.
- The next day you go to the Receita Federal to receive your assigned CPF number.
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Your CPF card is mailed to an address in Brazil within two months. (That's right, you need a Brazilian address).
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It’s best to use a trustworthy broker. Not only will the a good broker help you find a property, but he or she will make sure the price is fair, as well as make certain that the property is owned by the seller, and that there are no debts on it.
- The contract is prepared by the selling broker and contains:
- All information of the seller
- All information of the buyer
- Location and specifications of the real estate
- The conditions of payment(s)
- The contract is signed at the office of the broker.
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You pay a down payment (usually about 10,000 Reais or $3,500 usd). When payment has been made,your broker will arrange the registration of the property into your name via a cartorio (similar to a notary). The cost for the property transfer is approximately 4%-5% of the purchase price. Payment can be made all at once or in installments of 12 – 18 months dependable on the purchase.
- After registration, you are the legal owner.
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| Purchase process in more detail |
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The purchase process in Brazil is relatively simple. To buy it is necessary to obtain a CPF (Cadastro das Pessoas Físicas) number, a personal ID number which allows utilities and bank accounts to be registered. There is a nominal fee for this, and most developers should be able to process the application for you. This registration also provides details of capital brought into the country and allows for full repatriation of funds. The Brazilian government advises overseas buyers to appoint an “imobiliárias” who is a member of CRECI (Conselho Regional de Corretore Imobiliários – the Regional Council of Property Managers).
All properties built or administered after 31 December 1973 have a document called a “Matrícula”. This contains a detailed description and historical records of all legal, judicial and financial transactions pertaining to the property, as well as a description of the property itself, its precise address and location, past and present owner information and outstanding mortgages.
As in any foreign market, it is advisable to employ an agent, translator or lawyer who is well-versed in the legalities of the local property market to guide you through the purchase process, even though much of the process is managed through a “cartório” (notary office). All contracts are in Portuguese and English, with a written and binding guarantee of full title.
Deposits usually stand at 10%, but can range from five to twenty percent depending on the property. Stamp duty of 5% is also payable, purchase tax varies between two and seven percent and agents’ fees typically range from four to ten percent. On top of this you need to allow around £200-£500 for legal and sundry fees. Income is taxed at 15% from around £3,000 to £6,000, while for income levels above this the rate goes up to 27.5% – these rates are also applicable to capital gains. The balance of the property price is paid on delivery.
Foreign nationals seeking permanent visas must show that they have investment funds of at least $50,000 (£28,000) – although this figure can be reduced if it can be shown that you plan to employ Brazilian staff. Retirement visas are granted to people who are over 50 years of age and have a minimum pension of $2,000 (£1,100). |
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| Key risks and opportunities |
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As with every rapidly evolving market, dubious ‘due diligence’ and heavily-inflated prices have led to one or two horror stories.
Comparing properties agent by agent is laborious, but does reveal discrepancies in pricing, exposing those who have added 25% to their prices. Analysis also reveals the truth behind situations where agents and developers are offering 15% guaranteed rentals – they may just be giving the buyer’s money back to them. As they say in Brazil, Brazilians “sabe jogar” (know how to play). It is important, therefore, to be careful, to check rental agreements carefully before purchasing and to use a reputable agent.
Asking expats who have already bought in Brazil to recommend a reputable agent is a sound idea. Trading practices differ considerably from those in the UK. Some Brazilian developers also have an unusual pricing structure that allows for increments once a development is finished (although this practice is diminishing now that the economy has established). Selling, on the other hand, is relatively straightforward – find a buyer, transfer the deeds and the transaction is complete.
The general price history in Brazil may also be cause for caution, as the idea that prices are going to continue to rise is by no means a certainty. Brazil is not a country that tailors its financial policy to foreign investor interests, and it is far from certain that the next financial cycle will copy the last one with relatively high inflation and stable exchange rates. Any investor should bear in mind that the value of a property that costs £30,000 today could fall as well as rise. Brazil is still too insecure a market to invest your total worldly wealth and portfolio diversification is advisable. |
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We respect your privacy at all times and we will not share your email address with anyone else.
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| Opportunity rating |
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Brazil offers substantial opportunities for profit, especially for investments in the north-east. This is due to the area’s increasing popularity as a tourist market follows the Asian tsunami and to the substantial infrastructure improvements being made – one major example being the internationalization of Joao Pessoa airport. GDP growth should also continue to have a positive effect on the property market.
Brazil is currently on the brink of a property boom, while property prices in the past couple of years have already increased by a staggering 20% per annum in many locations, and inflation sits at an all time low at around 5%.
Brazil property is attracting land and property investors who seek to purchase from the start and reap great rewards from both commercial and residential property. While the interior of the country still remains forested and largely unpopulated, some areas such as the north east coast at Bahia, as well as Rio and Sao Paulo are experiencing a wave of new development which is set to offer some excellent returns on investment.
As Brazil is now connected by direct flights to the UK and the rest of Europe, it is becoming increasingly popular as a holiday destination and offers some stunning beaches, nature and cultural heritage that are far removed from European destinations. Brazil is constantly improving its infrastructure to accommodate this growing trend and the Central Government is also funding a R$300,000,000 upgrade to the airport at Maceio, raising it to international status. The work will include the construction of a bridge to connect north Maceio to the vibrant city of Recife. Once the bridge is completed, greatly improved access to the north will doubtless cause property prices to rise accordingly. |
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| make an enquiry or join our free newsletter |
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We respect your privacy at all times and we will not share your email address with anyone else.
You will also be able to Unsubscribe at any time. We hate spam just as much as you! |
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To Unsubscribe
Privacy statement |
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