Andy,

Just to clarify, do you mean to say that as and when the Escrow agent transfers money to Brazil, the Central Bank of Brazil records the sum paid by 'us the investors' against our name(s)?........ so that it's there to refer back in future?

By the way, some of these developers are again based in Europe.... Will they necessarily have to transfer 'our' funds to Brazil !!

Gee

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.

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Yes, I work for a Real Estate company doing market research and analysis but I'm not involved in sales.

Have a nice day

Hi There,

talking from first hand experience, in a perfect world all the money would go to Brazil.

This can increase your taxes and various other things also, and makes you end up paying more. Some companies, and I am talking from first hand experience, charge you a small ammount outside of Brazil, as this lowers theirs and our tax problems. It also is for things such as marketing, operations etc etc...

It is like Spain, although "this is the way of doing it", this way makes more sense.

Part of a good investment is investing in the right way.

I wouldnt recommend however paying a lot of money out of Brazil.

JM gave you the correct advice here Gee. The reason agents in Europe and others outside of Brazil are wanting you to pay monies outside of Brazil is so they can take their commissions, usually 10%, although I've seen higher, direct. I personally do NOT recommend this. All monies one pays for a brazilian property needs to be paid directly to Brazil and part of the sales price for your property. As JM correctly stated, this money needs to be registered with Banco Central in the BUYERS name, not an agents, nor a lawyers, nor anyone elses, and for purchasing your property. In other words the seller or developer needs to liquidate these monies via the contract of buy and sell which naturally must have the final sales price on it.

If the agent is wanting his commissions or whatever other expenses he is owed by the seller or developer, then he should be receiving them from the final seller, or developer in Brazil, not directly from the customer. And there are numerous reasons for this some already mentioned by JM as well as others.

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www.mjrdevelopments.com/ www.rosegardenbrazil.com

this can push prices up, sometimes it is in our interest not to pay commissions there. Things such as taxes are increased, so to be honest, should and would are too different things here.

First rule of investment is making money, if you can be clever, be clever, and take the consequences if you do wrong, but why did we invent off shore... sorry guys but I disagree with you, the real way isnt always the best way.

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.

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www.mjrdevelopments.com/ www.rosegardenbrazil.com

Ralph,

Let me know where you can get normal 10% commissions? We would be doing really well if that was our "normal commission".

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Nearly every agent selling Brazil in England that I'm aware of makes 10% commission. Granted I don't know many, but at least a half dozen. Also, the properties that were sold here in Aracaju by english agents were also paid 10% commissions.

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www.mjrdevelopments.com/ www.rosegardenbrazil.com

The point in all of this Rob is it doesn't matter what percentage commissions one makes, he makes them off the seller, not the buyer. And the buyer needs to protect himself, as do the agents as do the sellers. The REAL sales price naturally needs to be on any and all contracts especially when receiving funds from a country outside of the country of purchase. And when the REAL sales price is on a contract of buy and sell then that amount needs to be sent to the seller.

If an agent wants his commissions he needs to get them from the person that's responsible to pay them. One shouldn't put an extra burden or possible negative consequences on the buyer who has nothing to do with commissions whatsoever simply because agents want to get their hands on the cash as soon as humanly possible......that's the agents problem, which needs to be resolved with the seller, which can easily be done while protecting the buyers interests.

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www.mjrdevelopments.com/ www.rosegardenbrazil.com

I get offered a lot of property to sell and I mean a lot, which is not surprising since we are an agent and have a lot of exposure.

When looking at quality projects I can tell you that 10% is very rare and it is more often than not offered on property that isn't selling for one reason or another (be it bad location, bad design etc.).

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