Who is uv10 and where do they sell?

uv10, based in Natal, Brazil, with offices in Europe, is a property specialist with an unparalleled knowledge of Brazil, the buying process and the best areas to invest in at any given time. As full-time local residents, we provide clients with an insider know-how rarely found amongst our peers. uv10’s customer service is highly personalised and we nurture long-term relationships which lead to a high level of client referrals. We continuously expand our listings as we vet in person the latest properties on the market in Brazil.

Is uv10 a member of the AIPP (Association of Independent Property Professionals) and what does this mean?

Yes, uv10 is a member of the AIPP, and winner of the AIPP Best Small Agent award for 2010, – the industry body for the international property market. This non-profit organisation has been set up in order to improve standards of professionalism and customer service in the sector. In a largely unregulated market, AIPP Members such as uv10 voluntarily agree to follow a professional Code of Conduct. uv10 must act with honesty, transparency and integrity in all dealings with the public and with the industry. Please visit www.aipp.org.uk for more information.

Does uv10 assist with inspection visits?

At uv10 we believe that our personal assistance with flight bookings and reduced priced accommodation, as well as tips of where to eat and what to do, ensures clients a memorable and helpful experience when assessing the merits of a property purchase in Brazil. We do not, however, work with fixed inspection visit packages to Brazil, which often imply a commitment to purchase from the side of the client. Instead we offer a full viewing itinerary to meet the client’s wishes and timeframe.

What rights of ownership do I have as a foreigner buying in Brazil?

The only requirement for a foreign national purchasing property in Brazil is the acquisition of a CPF or Brazilian tax ID. Your lawyer can assist you with this very straightforward process. There are no restrictions on foreign ownership of property in Brazil and foreigners are entitled to the same legal ownership rights as Brazilian nationals, with full registration of title deed in their name.

Is Brazilian property freehold or leasehold?

All property offered by uv10, without exception, is freehold with full title deed.

What is the buying process in Brazil and what costs are involved?

Having selected a property the process is very similar to that operating in the UK and other European countries (unsurprising, considering Brazilian law is based on that of Portugal). Your lawyer will steer the process as well as check title and carry out other due diligence such as planning permission etc.

The only formality is to obtain a CPF (Cadastro das Pessoas Fisicas) number (similar to a National Insurance number) which ensures that the buyer has a legal identity in Brazil. Your lawyer can handle this on your behalf.

The buyer is liable for a number of fees and taxes when purchasing in Brazil but these do vary by State and by legal firm.

• Notary Fees – around 2 – 2.5% to include registration of title deed at the Land Registry. Payable on completion
• Transfer Tax – around 3% Payable on completion
• Legal fees – around 1.5% – 2% Usually a fixed amount so the % depends on the price of your property. This is usually paid in two parts.

You should therefore factor in around 7-8% of the purchase price in order to cover costs. As above, the bulk of these costs are payable upon completion.

How do I find an independent, reputable lawyer?

uv10 is able to recommend lawyers who have expertly handled property purchases in Brazil on behalf of our clients. Whilst you are of course free to appoint your own lawyer, do bear in mind that they should be familiar with the Portuguese language and the legislation surrounding property in Brazil, and must be licensed to practice in the relevant Brazilian State.

Will uv10 assist me through the purchase process?

uv10 is on hand for any questions or concerns throughout the buying process from beginning to end – and beyond if you wish. We might also come in handy to recommend beaches, restaurants and so on, as we also have plenty of experience of these…

How safe is it to send money into Brazil?

Sending money into Brazil is extremely safe as all funds transferred to Brazil will be automatically registered by the Banco Central (Central bank of Brazil) to conform with money laundering regulations. This paper trail is important when it comes to reselling and repatriating your funds.

The Brazilian Real is a controlled currency and cannot be bought on the open FX markets. This being the case, uv10 highly recommends Moneycorp who have worked with the Banco Central in order to set up a safe, easy and reliable system for sending foreign currency in and out of the country at a very favourable rate. Please contact Moneycorp for more information.

Please note that some law firms, based outside of Brazil, employ the use of Client Accounts and will manage the transaction of funds into Brazil on behalf of buyers. This can be a safe and easy option, provided the law firm is recommended and tried and tested.

Is finance available to foreigners looking to buy in Brazil?

The mortgage market is still developing in Brazil and foreigners cannot yet obtain a bank mortgage, so investors usually arrange alternative financing in their own countries. However Brazilian mortgages are expected to be offered to foreigners in the foreseeable future as interest rates drop from a relatively high 12.5% and as banks further develop their products.

How do I get to Brazil and what is the flying time?

Natal is the closest part of Latin America to Europe thus with a flying time of between six and a half and nine and a half hours from most European cities. This compares favourably with the likes of Florida and the Caribbean.

A variety of airlines service Natal’s existing international airport, Augusto Severo, from Europe and at just three hours behind GMT jet lag does not cause problems. The main European carrier is TAP (Air Portugal) which links most European cities via Lisbon, and charters are available from Holland, Spain, Portugal and Italy. From 2013/4, the brand new São Gonçalo do Amarante Airport will be open, set to become the largest passenger and cargo airport in Latin America, and eighth biggest in the world. Augusto Severo is already exceeding its capacity of 1.2 million passengers per year; São Gonçalo do Amarante will be able to accommodate five million.

Which nationalities are buying/renting in north-east Brazil?

Northeast Brazil is a true melting pot of nationalities although the keenest participants are of course the Brazilians themselves. For tourist property, Southern Brazilians make up the vast bulk of buyers and visitors and are rapidly increasing in numbers as the middle class in Brazil expands exponentially. Foreign tourism, and therefore holiday property investment and rentals, are mainly made up of the following groups: Portuguese, Norwegians, Italian, Spanish, Argentines, Dutch, Germans, Swedes, Australians, Canadians and so on. The UK and US have been relatively slow to realise the potential of Brazil and many of our clients have described it as a “hidden gem”.

Local market property is all about the Potiguars, or “those hailing from Rio Grande do Norte”, however, we have a huge range of international clients who invest in such properties off-plan, before the locals buy them on completion.

What sort of capital appreciation can I expect from a property in north-east Brazil?

Capital appreciation is of course a changeable feast and dependent on many internal and external economic factors. However, the best quality products in the most favoured locations are seeing current price increases of between 15 and 20% per annum.

Do you recommend buying in a gated community?

Common sense dictates that even in the very safest parts of Brazil, such as in and around Natal, Pipa and São Miguel do Gostoso, a detached villa on its own plot is vulnerable if left unoccupied for months on end. Stick to multiple-dwelling resorts for holiday rental investments – many are gated with security for absolute peace of mind and as a bonus they’ll also maintain the property and rent it out for you in your absence, netting you a nice extra income.

When buying local market property you have to think like a local, and they are extremely security-conscious. Invest in a gated community (this includes towers which are almost always gated) and you’ll find a solid resale market waiting for you.

How safe is north-east Brazil?

Research by the IPEA (Institute for Applied Economics Research) in Brazil shows that Natal is the safest city among all capital cities of Brazilian States. There are exceptionally low rates of homicide and all types of crime relative to other parts of the country. Providing you apply common sense with regards to your possessions and behaviour, northeast Brazil should be very safe.

How long can I spend in the property per year?

With condominium properties, this is very much dependent upon where you have purchased, as many condominiums in Brazil offer owners an onsite rental management scheme. Some of these allow you unrestricted private use, and some allow you x amount of private use per year and the property is rented out for you the rest of the time. Some properties, particularly local market, offer rental guarantees where there is no private use at all. Do bear in mind that you retain the freehold on your property no matter which scheme you choose.

Consult uv10 to see which properties would suit your envisaged requirements.

Who takes care of my property when I’m not there?

Again this is dependent on where and what you purchase – stand-alone property, property within a condominium or property within a condominium with onsite rental administration. For the former you would perhaps need to consider employing the services of a housekeeper or gardener. Going rates are around 190 pounds per month based on a six day week (this is the Brazilian minimum wage). Within a condominium the administration would charge community fees for maintaining the gardens and communal areas and these would range between 80 pounds and 200 pounds per month dependent on facilities offered and the number of units. If the property is part of a rental arrangement, the developer will take a proportion of the rental income and in return maintain, clean and manage your home so you have nothing to worry about.

What levels of rental income can I expect?

‘Guaranteed’ rental income looks good in the brochure but can be a little misleading if you don’t do your homework.

• Is the rent gross or net of condo fees, rental management fees and bills? In an ideal world it should be net.
• How long is the income guaranteed for – if the return based on the purchase price not the market value, as per the norm, you want the right to renegotiate after a few years, when the property has gone up in value.
• How much private use of your property does the rental contract entitle you to? Often, the answer is none, so you need to decide whether you really want to use the property yourself.
• Is the “rental return” simply built into the price you paid for the property or is there a genuine rental market in the area? If buying city centre property you can more safely assume the returns are real, if buying in resort areas you may need to do some research on this. What you want to avoid is a 3 year guaranteed return then no way to rent out afterwards.

City centre locations, popular, established tourist destinations, or buying within a branded resort are all ways of upping that important rental return.

What levels of running costs can I expect?

Aside from previously mentioned community fees there are several ongoing costs to consider when buying a property in Brazil. The annual real estate tax (IPTU or Urban Territorial Property Tax) is approximately 0.6 – 1% but this tax is usually based on a below-market-value town hall valuation of the property and can often be minimal. This tax is due at the beginning of each year. Other basic consumables are electricity,  water and gas. Gas is purchased in large bottles costing around 14 pounds and water and electricity vary according to size of property and location. The cost of living with regards to dining out and entertainment is up to 60% less than you would expect in Northern Europe.

What tax can I expect to pay on rental income?

Income tax is usually levied at 15% of your profit. Non-resident tax payers are only subject to tax on their Brazilian-source income.

How do I go about selling my Brazilian property in the future?

Firstly, we always recommend you buy in an location with a clear exit strategy. City centre or urban expansion areas are ideal because of the burgeoning domestic market, as are established tourist locations, particularly those with strict conservation laws protecting the area from over-development. Pipa and Sao Miguel do Gostoso are both good examples,where, owing to strict environmental laws, good buildable land is scarce and nothing over two storeys is permitted. This creates high demand for low supply and means you will sell your property a lot more easily.

uv10 carefully handpicks developments based on their resale and rental potential and is happy to assist with the resale of properties for its clients. We will also advise you on the optimum time to resell.

When is the optimum time to resell an off-plan property?

Gone are the days when we advise clients to flip properties to other investors and overheat a market, creating a short-lived phenomenon. 90% of uv10’s clients are in for the mid-term. The great thing about Brazil is that you can either buy off-plan to sell onto the local market, which is growing in buying power as the mortgage market here rapidly expands; or you can enjoy warm, sunny holidays at any time of year with a long holiday rental season, so resort property can make you a tidy income whilst it is going up in value.

We recommend buying in city centre, urban expansion or established tourist areas where  you already have a “pull” for future buyers, ensuring the all-important exit strategy.

For those after pure investment, the local market continues go to from strength to strength. Buying off-plan as a foreign investor to resell as part of a huge local market launch is an ideal way to invest, as Brazilian buyers can only acquire mortgages on completed property. Most developments in desirable parts of the city sell out in under a month.

How much CGT can I expect to pay?

Capital gains are subject to Brazilian tax at a rate of 15% which is calculated by deducting the acquisition costs from the gross selling price. This tax is waived if you reinvest in Brazilian property within a specified time-frame. Two circumstances of CGT exemption are if you have owned the real estate for 20 or more years or if the real estate is the sole estate you own as a Brazilian resident.

Please contact uv10 for more information.