Restrictions for foreigners when buying rural Properties

There has been a increase of purchases of rural areas by foreign individuals. Nonetheless, pursuant to Law number 5.709/71, there are many restrictions for a foreign person or foreign corporation when comes to the purchase of rural areas in Brazil.

The most relevant restrictions are the following:

1) Only foreign individuals (either persons or corporations) with official Brazilian residency can acquire rural properties, limited in extension by the equivalent of 50 land modules (maximum extension limit for a single property, or group of properties summed up), each land module may vary from state to state or from city to city, therefore a complete due diligence must be done prior to any purchase.

2) The land must be put to productive use.

3) The sum of the properties owned by foreigners in the same municipality must not exceed 25% of its total area, thus the necessity for a research within City Officials and Real Estate Registry.
4) If the area is larger than 3 modules, the acquisition is conditioned by previous INCRA approval. If the property has more than 20 land modules, a project of use must also be presented for previous analysis.

5) Such approval, must be mentioned in the title "escritura", otherwise the title cannot be transferred nor registered.

These are only the summary of the most relevant rules, nonetheless there are more rules which every foreign must pay close attention; otherwise the transaction will be considered null and void.

(1-786) 513-1655 - USA

(55-11) 3323-1998 - Brazil
(305) 940-6615 - USA


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