A.OBTAINING INFORMATION ON THE PROPERTY
Besides the information obtained from documents and property and owner certificates, we also recommend:
-Verify if the property has the “Habite-se” (Residence) Certificate and if the length in meters in this certificate is the actual length of the property. When the real conditions of the property are reflected by the “Habite-se”, it certifies that the floor plant has been approved by the city hall and by Historic Heritage and that the “ISS” (Civil Construction Service Tax) has been paid;
-Verify with the department of construction of the city hall if the property does not have an injunction due to irregular construction, concluded after obtaining the “Habite-se” certificate;
-Verify whether the construction has been annotated at the real estate Registry Office (described on the clearance title of the property), and if the construction taxes to the National Social Security Institute (INSS) were paid (if it has been annotated it means there are no construction debts with the INSS);
- In the case of a Condominium, request the manager or the real estate agency for a written document stating that there are no debts (regarding monthly or penalty fees) with the condominium;
- In the case of real estate development, verify if the project is registered at the real estate registry office, meaning that it has been approved by the city hall (it is forbidden by law to sell plots before registering the project at the Registry office);
B. TAXES AND OTHER EXPENSES INCURRED IN REAL ESTATE BUSINESS
- ITBI (Real Estate Transfer Tax): local tax worth 2% of the value of the real estate;
- Laudemium: transfer tax of 5% owed to SPU (Federal Government Heritage Office), only when the land belongs to the Navy. Whether a property belongs to the Navy or not must be verified at the Real Estate Registry Office;
- Real estate profit: if there is profit in the sale of real estate (difference between the amount received and actual price) a 15% income tax is incurred on the profit (there are exceptions);
- Deed Draft: amount charged by the notary public of the Registry of Deeds and Documents Office to prepare a deed;
- Deed Registration: amount charged by the notary public of the Real Estate Registry Office to register the deed in the General Real Estate Registration (RGI).
C. BUYING A POSSESSION
Much of rural and beach-front land in Paraty are legitimate possessions, which means that the fisherman or farmer has lived in the area for many years, but there is not a registration number for the property at the Real Estate Registry Office
A possession may or may not have a Possession Rights Deed of Assignment (which is a purchase agreement document, made by the notary public at the Registry of Deeds and Documents Office). This deed gives the purchaser of the possession greater guarantees, as the notary public requires plenty of documents, including a Topographic Floor Plant of the area, signed by all the bordering neighbors, agreeing with the measurements, besides withdrawing the habitual clearance certificate which is otherwise demanded.
If there is not a Possession Rights Deed of Assignment for the property, the first step is to ensure that the seller has legitimate possession. One way of verifying this is by analyzing if taxes have been paid (IPTU–Urban Property Tax, ITR – Rural Property Tax and/or INCRA – tariff due to the National Institute of Colonization and Agrarian Reformation) in the seller´s name for many years, which effectively proves ownership. Additionally, neighbors should be visited and asked for information on the area and on the person selling it. As possessions can be inherited, it is convenient to ask for the seller´s siblings’ signatures, confirming that the area really belongs to the seller.
Upon confirming the possession, a topographical floor plant of the area should be made, neighbors should be asked to sign it, in agreement with the measurements, and the Possession Rights Deed of Assignment should also be made (it is not mandatory, but highly recommended to draw up this deed when buying a possession).
To make sure the property is 100% legalized it is recommendable to file a suit for continuous adverse use, so that the property is assigned a registration number at the Real Estate Registry Office.