Know which are the requirements to purchase real estate outside Brazil and understand why the present scenario is excellent to accomplish the purchase
SÃO PAULO, BRAZIL, July 21, 2020 /24-7PressRelease/ — The pursuit of investments in real estate abroad is becoming an increasingly common practice among Brazilians. According to data from Capitais Brasileiros no Exterior (CBE) (Brazilian Capital Abroad), a research made by Banco Central do Brasil (BC) (Central Bank of Brazil), the demand for purchase of real estate abroad increased 240% between the years 2007 and 2017, reaching an amount of US$6.3 billion worth.
The same research points that 34% of those investments were made in the United States, a percentage that corresponds to US$2.1 billion worth.
The reasons that incite many Brazilians to make investments in real estate outside the country are several, but the main ones are stability and economic solidity.
Brazil is a country which presents recurrent periods of economic instability, therefore it is important to have a diversified and globalized investment portfolio, with assets in countries with a stabler economy. Thus, it is possible to guarantee good profitability and to diminish risks of price variation in the real estate market.
For economist and investor Luís Felipe Neiva Silveira, “The Brazilian currency is losing much worth as to [US] dollar. Therefore, investment in an American asset is always welcome. In case a person decides to lease the real property, having an income in a strong currency also makes a lot of difference.”
By the way, which are the necessary documents to purchase real estate abroad?
As in every negotiation, the process of purchase might be a little bureaucratic. The necessary documents to accomplish the purchase of real estate outside Brazil vary according to legislation of the country in which one wishes to invest.
However, the basic documents to accomplish the purchase are:
If one is a natural person, it will be necessary:
• Income tax;
• Income statement;
• Valid visa from the country where one wants to finance;
• Residence statement;
• Investment accounts and finance assets statements.
As for a legal person: all the necessary items for a natural person plus the articles of association of the enterprise and some registry statements.
Depending on the financial institution chosen by the investor, it will also be necessary to make the translation of all required documents into the language of the country in which one wishes to purchase the real property.
It is important to bear in mind that a very common factor which might make an interested person fail is insufficient available income. Many potential purchasers are investors and have financial assets which, therefore, theoretically proves payment capability. Nevertheless, a bank must have a proof of formal income such as remuneration per results (pro labore fee), for instance.
How to program oneself to make the purchase?
For whomever wishes to accomplish the purchase of a first real property abroad, it is necessary to be aware that an investment in a foreign currency requires discipline, a structured financial planning, and prevention for possible readjustments of the currency value according to the exchange rate in force.
Concerning this, Luís Felipe Neiva Silveira reinforces, “It’s important to be aware that assuming a mortgage in dollars involves a greater financial discipline in order not to be caught by surprise.” And complements, “Besides that, setting a legal structure to have [possession of] the real property is essential.”
With the coronavirus pandemic, there has been a destabilization in the real estate sector. Increase in the number of unemployed and loss of the consumer’s purchasing power caused a world economic recession. This resulted in the fall of demand for purchase of real estate and consequently the drop in prices.
For whomever has been waiting for the right moment to invest in real estate outside the country, this is the one. According to Luís Felipe, “The present moment is excellent to accomplish the purchase of real property outside Brazil, since interest rates worldwide are at the lowest levels, and even at negative ones.” With lower demand, banks are offering more attractive credit, which facilitates approval, and opens a wider margin for negotiation.
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