Investors abroad should ‘explore tax laws first’
Property investors looking to buy in lucrative markets such as Brazil should investigate the country’s tax policy first, according to an industry expert.
Independent financial advisers Calculis explained that getting a "feel for the inheritance tax situation" in particular will enlighten buyers before they end up paying more than they expected.
Alex Pegley, director of firm, said: "The key thing that people need to be aware of is that tax is constructed in a different way abroad."
In Brazil local tax varies between regions but is normally around 0.6 per cent of the purchase price of a property.
However, foreign investors who are not domiciled in a tax haven can receive tax benefits by applying for Resolutions BACEN 2689, which can exempt the investor’s capital gains and their earnings from investment participation funds under certain circumstances.
Mr Pegley also highlighted that wealth tax is a factor that should be researched as this annual tax is paid on property in countries such as Spain and can be often overlooked.
Brazilian investors should be pleased to hear that the country does not have a double taxation agreement with the UK and there is no specific property tax in the Latin American country.
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