Selling property in Brazil

Hi Joe,

No, under the "Regime de Separação Total dos Bens" any assets acquired at anytime, before or after marriage remain the sole property of the person who acquired them. So if the property in Brazil was purchased and registered in your wife's name only, by Brazilian  law she is the sole owner and only she can sell the property, unless she gives you a "Procuração Publico" (Power of Attorney) which grants you permission to do so.

Thanks for the reply!

In fact the situation is the contrary; i.e. the deed is in my name. I was concerned that the notary would want to check the Russian laws (because of the "casado ... pelas leis de Russia" clause) before letting us sell.

The "regime" itself has nothing to do with the Russian laws so there's nothing to check. The wording of the Consular Certidão de Casamento is a bit confusing I know.... however it really means that the marriage was according to Russian laws. The "regime" is according to Brazilian law.

If the deed is in your name, the property is 100% yours. You're the only one who needs to sign anything and you also have the legal right to appoint anyone you wish to act as POA.

Really confusing.. Because we were married before we even came to Brazil. So if the property were in Russia it would  have belonged to us both, but it seems in Brazil it's only mine!?

joethelion wrote:

Really confusing..

Bem-vindo ao Brasil! Este é o jeitinho brasileiro.



Welcome to Brazil. This is the Brazilian way!

Well, don't worry too much about it. If you want to change the regime to "Comunhão Parcial de Bens" which is the usual 50/50 split you can do that at a Cartório here in Brazil. It isn't, from what I hear, a very complicated process.

Just my two cents here. You shouldn't have much problem selling the property, but you may want to check any taxes that are triggered due to the sell off of the real-estate. Good luck with that.

I would also very much like to find out how to sell property to foreigners. Does anybody on the forums know where I could start to research this information?

Thanks.

As far as I know, at least for residents, if you own a property for longer than 5 years it is not subject to capital gain tax.

Any real estate will be subject to a capital gains tax and as such the purchase and the sale must be reported to the Receita Federal by filing a "Declaração de Impostos de Renda - Pessoas Fisicas" (DIRPF). Hope you filed one of those at some point following the purchase and declared ownership of the property. That is obligatory for Brazilians and foreigners alike.

Once you sell the property you'll have to file another DIRPF to declare the amount of capital gains. Other than your realtor's commission the taxes involved in the sale are all borne by the purchaser. You are only responsible to prove payment of the property taxes (IPTU) if any, to the date of transfer of ownership.

Sorry Tiger, capital gains taxes on property ALWAYS apply.

I stand corrected; according to PWC:

"..as of October 2005 onwards, capital gains earned by resident individuals on the sale of residential real estate is exempt of such tax, if the seller, within 180 days from the sale, uses the earnings to buy a new house in the country. This rule is only applicable for a determined individual after a gap of five years between the transactions."

and

"As of October 2005, there is also a reduction factor applicable to the calculation basis of the capital gain on the sale of residential real estate by resident individuals."


Also according to http://www.rioexclusive.com/en/buyers-g … n-Rio.html

"If you come to sell your property in Brazil, then Capital Gains tax is generally set at 15% for both Brazilians and foreigners. If you have bought your property in your personal name (rather than in a company name) then they are tax advantages that you can take advantage of!

    "You are exempt from the gain on disposal of capital earned, if it is the only property that the owner has, for sale whose value is up to R$ 440,000 provided they have not done any other alienation of property in the past five years. (Law No. 9,250, 1995, art. 23, RIR/1999, art. 39, III; IN SRF No 84, 2001, art. 29, I)
    "Regardless of when you sell or the amount of sale, if you reinvest in property within 6 months, the full amount can be claimed back on all of your capital gains tax from your previous sale. If you reinvest within the 6months but under your previous declared sale price then you can claim back some of your capital gains tax as it would be offset against your new investment
   " You can also claim back 4% a year on your declared purchased value for de- appreciation for every year you have owned the property against any capital gains tax.
   " Property improvements and furnishing (if sold with furnished in a sales contract) receipts can be also off-set against capital gains."

Thanks for the up-to-date information regarding the tax implications of selling real property. I'm sure it will be of great assistance to everyone who finds themselves in that situation.

As with everything that the Receita Federal does, the rules they make are constantly changing so this information should also be confirmed at the time of any future sales, since it may have been superceded by some new regulations.

For now, this is the most current information that has become available.

I would suggest checking into tax rate difference depending on if you alone, or if you and your wife both declare as joint owners. A couple or family might receive a greater tax break than an individual. However, I do not know Brazilian tax code to any extent.

It seems (according to a conversation with a lawyer) I can't sell the flat without her signature or a power of attorney, because the original marriage certificate, or laws of Russia should be checked before the sales will be concluded (which says that the property acquired after marriage is common). Even if it will be sold in the notary, it will bounce back from the registro.