How sell property in Brazil and transfer funds to US legally?

Hi there,
If the property is already registered on your name (after the probate procedure), you can sell it (you need to be physically present or have someone with a proxy to sign the deed). After that, you have to either set an account in Brazil and then afterwards transfer the proceeds of the sale or negotiate that the buyer sends the money directly  to the US. Sometimes this transfer part is difficult because of banking regulations, but normally it is feasible. The banks most of the times will need to be lectured on the regulations by an attorney. They are normally fearful that Central Bank is going to be punished, so they refuse doing even some basic operations to avoid any  and all risks.

Best,
Sergio

Besides capital gain in Brasil of 15% over property value, do the banks charge a percentage to transfer over?  Do Brazil and US have a tax treaty finally?  I am just trying to figure out if it is worth doing it based on the % of money lost.  I saw your message also, if the amount pans out I will follow up with you.

Thanks!

Bank will charge foreign exchange fees and any wire transfer fees by Either US or the BR bank, sometimes both depending on the T&C of the bank accounts.
As to tax treaty; income from BR will be paid in BR. Income from US funds are taxed in US.
Cap Gains would be brazil since in Brazil

That above from TexanBrazil is correct!

I would suggest get a good accountant here in Brazil. It's very difficult to transfer money in and out of Brazil. They love documents even when you shows it to one group you will be ask at least two or three time to do it again. The accountant will know the tax laws and best possible way to move the money. There are many expat could be easier to sell  to them who have there money in the US. Just a suggestion  show the city and location if near a beach may help get interest. Right now property is cheap here.

You are paying your Estate Inheritance Tax levvied by the State your property is at, and assuming you did not make a purchase transaction with your deceased relatives prior to the Estate Distribution process, and I stand to be corrected,  yet I do not believe you are due to  pay   Capital Gains Tax.  Capital Gains Tax is  only  excised at the difference on what you paid at the adquisition from what you sold the property.  Ihherited Estate does not count towards this form of Taxation. 

And then you are paying for wire transfer fees and you will get nailed on the Currency Exchange,  to have the money wire to the US.  Still it beats carrying cash in bags to have it seized by customs or worse,  being mugged.  These are not significant deductions and you should not dwell on this. 

Now, Uncle Sam  loves your new found money, so my advise is to put it all in tax deferred investment products, before the Good Ole lays the fingers in your windfall, if you elect to bring the money to the US...

Here are some alternatives to play legal while avoiding giving up a chunk of your inheritance to the Tax Man...

1.Put money in a tax-deferred annuity ( most retail banks have this product, it pays moderately, above you might have earn on a CD or Savings Account ) , or;

2.Fund tax-deferred accounts like an IRA or employer-sponsored retirement plan such as a 401(k), 457 or 403(b) plan.

3. Accumulate money inside a whole life insurance policy, or fund Roth IRAs, Health Savings Accounts, or by using certain types of government bonds such as Series EE Bonds or I-Bonds.

These investments do take effect only at the withdrawl. So while tied up to these investments you get to accrue interest over interest. At redemption time you will  pay
your taxes, but in the very least you vested a decent increase on your initial  Brazil to 'US cash transfer.

You are best served by seeking the help of a certified financial adviser if you choose to bring the money in the US.   

Either in the US or Brazil, the Tax Man  will fork the money over unless you are properly advised on legit  tax avoidance schemes. 

Given the actual state of affairs in the US  ( 21 USD Trillions on the hook on due interest payments on US Goverment Backed Bonds, plus USD 200 Trillion unfunded liabilities ), running annual shortfalls in the excess of half a Billion Dollars,  and the recent offset in Corporate Taxes thus shifting the burden to the middle class, I would not buy into US Treasury Bonds  rated as AAA, not to mention their  return rates are anemic.   

If for any good argument, watch these interviews from Harry Markopolos ( 1 and 2 ),
https://youtu.be/cfwJ06hc0_8


Short, simple and sweet, if you find a similar and legit deferred tax product in Brazil, keep it here.

Thank you all for your very good advice!  I will be visiting in the next few months and will try and see what I can do!

Hi, since my spouse passed on, I still tried to obtain an RNE in BR but to no avail. I would like to return to the US and never look back. However, since its a 50/50 split between myself and offspring (no will) I decided to opt for the cash in the bank. The problem is how to get it into US so I would not lose a whole lot? My bank does not list TransferWise as an option to transfer to. Any ideas, except for W.U. which has hefty fees, and my time here is limited at best since I already overstayed my Visa. Thanks for your advice.

Hello. In fact, you will need a good accountant in Brazil to assist you to send the money to other country and also a realtor who speaks ENG to manage the negotiation/contract in case you do not speak Portuguese. There is a chance that in case you have a bank account overseas, the buyer can send the money to this account. All's a matter of contract negotiation and good accountant involved.
***

If you inherited the property, first it must clear through probate ( inventario ) , whose procedures, and tax rates vary from state to state in Brazil. And while at it, beware this process takes time to clear, we are talking a 6-12 month window to actually being able to sell it outright.

Using the State of Sao Paulo as a template....

If you are a spouse survival, there is no levied  Estate Tax ( you are then qualified as a "meador"). I Otherwise, if there are other survivors, then they are to be assessed an Estate Tax, usually about 3% of the property assessed value ( valor venal ). It's called the ITCMD tax.

Upon the death of the owner or relative, you have up to 60 days to make the claim for probate and pay the tax whereas warranted. If there are assessed ITCMD levies, you will pay a fine and accrued interest once your filing and tax is past due. 

The probate goes through a Registry of Deed, no need for an attorney. IT's a Cartorio, and the filing is undertaken by an Escrivao ( a certified clerk ).  Just make sure you gather at least three sources on this, as their opinions on what constitute the right set of required documents may vary.  If find escrivoes expertise in Brazil questionable and inconsistent.   If you can't be there to run the paperwork, get a reliable attorney, who by the way, is a pro forma requirement regardless, to consummate the probate.  Shop for expertise and rates, and get referrals on this. 

Once you sell it, you are then supposed to file the sale in your tax returns, which means, you might have to fork over capital gains taxes to Brazil's  Tax Authority ( at your annual Federal Tax Returns ).

The selling process is pretty straight over. You provide documentation ( mostly free and obtained online ) vouching for your standing on debts, liens, unpaid back taxes, lawsuits.  If you are then clear of such encumbrances, then, a sale can be consummated with title transfer free and clear. That means, there is an existing Sale and Purchase Contract signed off.  Also, beware there is no Escrow Deposits, that is an illegal practice in Brazil.  You can't take deposits, period.

Buyer pay for the transfer fee, stamps, tax, and you pay the selling broker, if any used.  You might collect the money either through a banking transfer or by taking a cashier's check ( cheque administrativo ), assuming a cash sale.

If funding is through a mortgage loan, then it needs to clear through the bank, including having an appraised value so that the lender can in fact undersign the loan. 

Once the money is in your Brazilian bank, it is just a matter of transferring funds by providing your US destination bank account and SWIFT number.  By then you might want to make sure you get it clear with the Fazenda Ministry ( our local tax authority ) as for transfer limits. 

You may also make sure you record your earnings as they might put you above the IRS's  threshold , according to US's FATCA ruling.

Another alternative is to turn your property into an income bearing opportunity by getting it rented, if you can find anyone reliable to actually manage it ( which, if I know my property managers, the emphasis on reliable is one not to be taken lightly ).

Wazzup wrote:

Hi, since my spouse passed on, I still tried to obtain an RNE in BR but to no avail. I would like to return to the US and never look back. However, since its a 50/50 split between myself and offspring (no will) I decided to opt for the cash in the bank. The problem is how to get it into US so I would not lose a whole lot? My bank does not list TransferWise as an option to transfer to. Any ideas, except for W.U. which has hefty fees, and my time here is limited at best since I already overstayed my Visa. Thanks for your advice.

____
I am very sorry about your loss, and your necessity to give up on your RNE and having to leave to the USA.
Although I have no idea how much money you are talking about, you might ask if anyone here wants to sell you dollars, or whatever currency you need, in exchange for your R$. It might be less of a loss for you, and a way someone could buy R$ at a better rate for them. I also use a professional facilitator in Sao Paulo, he "might" be able to help you here, but usually, he is doing the opposite, transferring large amounts into Brazil for investments. If you talk to him, you should ask about your possible RNE if you have not spoken to a professional before as he does a lot of immigration work.

Get it rented, while you are sorting through this.   You will eventually get your paperwork in order. 

I am going through the same ordeal, it takes time on two properties co-inherited from my deceased father.

Wazzup wrote:

Hi, since my spouse passed on, I still tried to obtain an RNE in BR but to no avail. I would like to return to the US and never look back. However, since its a 50/50 split between myself and offspring (no will) I decided to opt for the cash in the bank. The problem is how to get it into US so I would not lose a whole lot? My bank does not list TransferWise as an option to transfer to. Any ideas, except for W.U. which has hefty fees, and my time here is limited at best since I already overstayed my Visa. Thanks for your advice.

No idea of Cambios in your area. You always can exchange and take it to the US. Must declare any funds over $US 10,000.00

The fact you are a non legal resident with an issued RNE does not prevent you from getting a Tax ID and being entitled to be a heir. 

It takes a while to get it the Probate process sorted out, thought

SpRealEstateBroker once again gives good advice .....

Rectifying an old post of mine...

The probate process actually requires an attorney, mostly as a mandatory pro forma for filing.

You will end up doing most of the leg work, unless you pay your attorney above the minimum rate you can shop for. 

Cartorios, or Registry of Deed, will not run the process until you have designated an attorney.,  And they will not refer you one.  You must source your own attorney.

And every clerk is a complete different story on what paperwork, or what's missing on paperwork. 

Just get a decent attorney ( tall task in Brazil ).

@sergiobotinha  Hello I already sent an apostle notarized power of attorney to my proxy in Brazil what is the next thing to do.  I am one of three children of a little apartment my mother left after passing.  Please let me know thanks.

@rdnllsn18 As others have said, you could use a lawyer to help you with the bureaucracy in Brazil. I know a specialized lawyer that works with the expat community in the country and could assist you. She helped a few friends before, so I always recommend her.

@Inubia Tell you what:  i****

08/19/22 @sergiobotinha  Hello I already sent an apostle notarized power of attorney to my proxy in Brazil what is the next thing to do.  I am one of three children of a little apartment my mother left after passing.  Please let me know thanks.

- @rdnllsn18

Just to clarify....

If you are a spouse and survivor, then you are a "meador", therefore non subject to probate. And it helps if your name is in the title of deed. 

Other than that, then you must go through probate. Just check on that.

As far as Capital Tax Gains, you have to check on exemptions, which might be affected as to when the property was purchased originally under the deceased and or you.   

Some times it could mean, zero capital gains taxes.  Sometimes, it is not applicable, and you have to pay the reigning tax rate. 

Also, there's an equivalent to a 1030 tax deferred exchange here in Brazil.  Same principle, you sold and you bought something else within the Country, within a six month window  then your  Capital Gains Tax  due is Zero. 

If you live abroad, you are the facto a landlord absentee, which does not bode well for you, even if you hire a property manager. Unless you have a super duper property manager in your behalf.  And being in Rio......

Well, there is a better way to collect income on the result of your sale, without transferring it Stateside.

So, what you can do, is to sell it outright, and take the proceeds to  buy unsold  or resale hotel units ( the  actual room unit ). As of recently, most larger hotel buildings, with very few  REIT sponsored projects and exceptions, are sold through units, just as you would gotten a condominium unit.

It benefits you, as passive income, where regardless as to whether your unit got occupied or vacant the entire previous month, you stand  collect the share of the net income. It so happens as hotels earnings are shared as income pool.

Most branded hotel projects in Brazil, regardless of flag affiliation ( Hilton, Accor, Choice Hotels, Marriott Intl ) are being put together this way. Likely you should be getting an Ibis, Ibis Budget, Comfort Inn, perhaps a Hilton Garden.  In short, you will be getting a piece of the action through passive income. Hands off management.

And btw, you stil own something, just as if you would for an apartment or office suite.

I recall I brokered a couple deals about seven years back, for two Trype Meilia units in Sao Paulo.  We got the monthly income & expense statements, met with the property comptroller, were given a tour, saw the occupancy numbers.  At that time, a R$ 335.000,00 investment netted about R$ 1,900 per month, with some seasonably adjustments throughout the year.

In some cases, even taxes are taken out, so by the time you get your wire transferred funds on your monthly income, it's tax free, and filing is a merely pro forma. 

And to boot, your income will fall bellow FATCA tresholds. 

There are caveats with this strategy, but this is another conversation.

Just give it a thought.

Thanks for the valuable information so far!

My question is about the amount of time required for the actual completion (closure) of the sale.

Assuming that the buyer is financed, what is the range of time that one might expect between acceptance of an offer and completion of the sale?

Consider 'closure' as turning over the keys and getting the proceeds.

Less than 30 days, 30 - 45 days, more?

Hi there, since the purchase is going to be financed, all the documents have to pass through the banks, and the buyer has to be approved as eligible, and considering that you also have to arrange the deed signature with the Cartorio, have a private contract, etc., I think 45 days is a reasonable timeframe to expect.  one consideration you should have is, if the sellers' account is abroad, what would be the difficulties the bank will impose for an international payment to be done, If possible at all. Take care

@555USRio Best bet for this. Join the Expats in Brazil group on FB. Talk to James Chapman for the financial  part. For lawyer talk to Phillippe Macedo there. They will help n steer you through all the hoops.