Brazil’s real estate market has operated in a high-interest-rate, low-growth environment, with the SELIC rate anchored at historically elevated levels (15% APR, far above the 2024 forecasts of 8%-9%) and financing conditions remaining tight, while construction activity and selected asset classes remain surprisingly resilient. High borrowing costs, combined with persistent real house price and rental increases, have accelerated a structural shift in larger urban centres, where households are pushed towards renting and away from home ownership.

Middle-income families saw a BRL 15.44 billion net withdrawal from savings accounts in 2024; these deposits are not only a primary source of down-payments, but also structurally important as the SBPE (Brazilian system of saving deposits and loans) is one of the main channels for mortgage funding, in a context of moderately high inflation. In response, the Federal Government announced a new housing credit model, capping annual interest at 12% APR and raising the maximum eligible property value to BRL 2.25 million, in an effort to reactivate mid-market development.

The affordable housing segment has been expanded through the Minha Casa, Minha Vida Programme (Statute No. 14,620/2023), whose eligibility now covers families earning up to BRL 12,000 per month and which continues to underpin construction-sector GDP, with moderate growth projection for 2025.

High interest rates have reshaped real estate finance, reinforcing the appeal of fixed-income instruments, which attracted over BRL 528.5 billion in 2024-2025, notably through Real Estate Receivables Certificates (CRI, broadly analogous to mortgage-backed securities) and Real Estate Credit Bills (LCI, bank-issued covered bond backed by real estate credit), while variable-income instruments remain weak.

On the commercial side, logistics, industrial and data-centre assets are clear winners, benefitting from e-commerce, nearshoring and digital-infrastructure demand (notably from AI), while traditional offices and retail undergo a pronounced polarisation: prime, ESG-compliant properties with strong transport connectivity in major hubs such as São Paulo and Rio de Janeiro continue to attract tenant migration and capital (especially due to RTO policies in major companies such as Amazon and Nubank), whereas obsolete stock faces discounted pricing, active repricing by lenders and investors, and pressure for repositioning, retrofit or full redevelopment.

Brazilian real estate ownership is primarily governed by (i) the Federal Constitution, which guarantees property rights and their social function; (ii) Statute No. 10,406/2002 (Civil Code), setting substantive rules on ownership, possession, in rem rights and transfers; and (iii) Statute No. 6,015/1973 (Public Records Law), which regulates title registration and ensures publicity and priority. These core statutes are complemented by (i) Statutes Nos. 4,591/1964 and 6,766/1979, on real estate developments and subdivisions; (ii) Statute No. 4,504/1964 (Land Statute), on rural property; (iii) Statutes Nos. 4,380/1964 and 9,514/1997, on housing and real estate finance (including fiduciary ownership); (iv) Statute No. 10,257/2001 (City Statute), on urban policy; (v) Statute No. 8,245/1990, on urban leases; (vi) Statute No. 14,620/2023 (Minha Casa, Minha Vida); and (vii) Statute No. 14,711/2023, modernizing real estate guarantees.

The most significant recent developments include Complementary Law No. 214/2025, which implemented Brazil’s consumption tax reform and introduced the dual VAT (IBS/CBS). As from 2026, VAT will extend to leases (subject to a 70% rate reduction), property sales and other real estate transactions. Residential leases benefit from specific reliefs, while taxable property disposals by regular VAT taxpayers are subject to an “adjustment reducer” mechanism designed to tax only post-2026 appreciation.

Provisional Measure No. 1,303/2025, although expired, signaled a shift toward broader taxation of financial investments, including real estate securities such as CRIs and LCIs, by proposing the removal of long-standing exemptions and standardising the taxation of fixed-income instruments. Its core ideas now inform ongoing legislative debates, notably Bill No. 5,369/2025, which seeks to reintroduce taxation over CRIs and LCIs.

Infra-legal updates include new Central Bank and CMN rules revising housing credit criteria (lower interest rates, higher property-value caps and preservation of FGTS funding); CMN Resolution No. 5,517/2024, regulating multiple fiduciary liens under the 2023 Guarantees Framework; CNJ Provision No. 190/2025, strengthening legal certainty for prenoted titles; and Normative Instruction No. 2,275/2025, which created the national Brazilian Integrated Property Register (CIB).

Forthcoming measures with potential material impact include Bill No. 4/2025 (Civil Code reform, particularly on succession and real estate transmission) and Bill No. 1,087/2025, which would tax dividend and profit distributions, significantly affecting real estate holding structures and investment vehicles.

Ownership of real estate is proved exclusively through registration of the title in the competent Real Estate Registry Office, whose records are publicly accessible nationwide. Under the Civil Code and Statute No. 13,097/2015, legal acts that create, modify or transfer rights in rem become effective only upon registration, which ensures publicity, priority and legal certainty. The Superior Court of Justice (STJ), however, acknowledges that unregistered instruments, such as purchase agreements, may generate certain in rem effects, including an acquisition right enforceable against third parties.

Because ownership in Brazil is perfected only through registration in the property registry, title may be held solely by parties with registrable capacity. This creates practical limitations for non-personified entities, such as condominiums and FIIs (broadly analogous to REITs), in which the administrator or trustee is typically the registered owner. Financial institutions are also subject to statutory and regulatory restrictions that limit the acquisition and retention of non-operational real estate. Beyond prudential requirements derived from the Basel framework, Brazilian banking law restricts institutions from holding real estate as an investment activity and requires the timely disposal of properties received through foreclosure, recovery proceedings or other credit-enforcement mechanisms.

Foreign individuals and entities may freely acquire urban property, provided they obtain a tax ID (CPF or CNPJ). Rural property, however, is subject to strict limitations under Statute No. 5,709/1971, which also applies to Brazilian companies under foreign control. Restrictions include: (i) residency requirements; (ii) area limits based on tax modules; (iii) INCRA approval for acquisitions between 3 and 50 modules; (iv) Congressional approval above 100 modules; and (v) a 25% municipal cap, with no more than 40% held by nationals of the same foreign country. Certain sensitive areas, such as border zones and coastal strips, require National Defence Council approval. Statute No. 13,986/2020 further authorised rural property to be used by foreigners as security or payment in kind, and exempted legitimate inheritance, all subject to national security controls.

In Brazil, proprietary interests in real estate are limited to a closed list of in rem rights set out in Article 1,225 of the Civil Code and related statutes. The main interests are: (i) Full ownership, individual or shared (including condominium units and multi-ownership under Law No. 13,777/2018); (ii) Limited in rem rights of enjoyment, such as usufruct, use and habitation; (iii) Surface and similar rights (surface rights over land and airspace, as well as the “right of laje” created by Law No. 13,465/2017); (iv) Easements (servidões) benefiting a dominant tenement; (v) Acquisition rights, notably the registered promise of sale, which creates an in rem “right to acquire”; (vi) Security interests, including mortgage, antichresis and alienação fiduciária (fiduciary ownership, the prevailing form in modern real estate finance); and (vii) Rights over public property, such as the concession of right to use for housing (CUEM) and the concession of real right to use (CDRU), linked to housing and authorised public uses.

As a rule, land ownership encompasses the buildings and improvements on it: constructions are incorporated into the landowner’s estate by accession. Structures built by third parties are also incorporated. In this case, good-faith builders may claim compensation, whereas bad-faith builders may be ordered either to remove the works or lose them without indemnity.

Brazilian law, however, allows a separation between land and construction through surface rights and the “laje” in rem right. Surface rights grant a third party the power to use, build on and dispose of constructions over the land, subsoil or airspace for a defined term. The “laje” right creates an autonomous unit built above (or below) an existing structure, giving the holder ownership of the superimposed construction without acquiring the underlying land.

Commercial real estate is commonly held directly by individuals or legal entities. For investment and risk-allocation purposes, it is frequent to use corporate vehicles, especially limited liability companies, including special purpose entities (SPEs, similar to SPVs) created to ring-fence project-related assets and liabilities from shareholders’ other businesses. In addition, investment funds (notably FIIs and FIAGRO) are widely used to hold and operate commercial real estate and to access the capital markets.

Legal due diligence is typically conducted by the purchaser’s counsel and starts with a review of the property’s registry file and updated ownership and encumbrance certificates issued by the Real Estate Public Registry. Although Statute No. 13,097/2015 reinforces the concentration of information in the registry, Article 185 of the National Tax Code still allows the annulment of transfers in the presence of certain unregistered tax debts, so tax checks remain essential.

Standard practice includes searches in federal, state and labor courts, protest records, tax clearance certificates and inquiries before the Federal Revenue Service and enrolled tax-debt registries, usually in the name of the seller and, where relevant, its controlling group. Buyers also review occupancy permits, operating licenses, zoning compliance and other asset-specific documents. Rural properties require additional rural land and environmental registrations, while acquisitions in condominiums call for evidence of no outstanding condominium assessments.

Market practice further involves site inspections and, where appropriate, review of environmental licenses and reports. In developer transactions or greenfield projects, due diligence will also cover pre-construction conditions, such as soil surveys, previous use, and urbanistic constraints, given their impact on licensing, construction feasibility and timing.

There are no specific categories of legal issues that are usually excluded from the scope of due diligence in real estate acquisitions. In practice, the scope is commercially driven and may be narrowed in smaller or lower-risk deals, but high-value transactions typically involve a comprehensive review of all material legal aspects. For purposes of executing the public deed, Statute No. 13,097/2015 and National Council of Justice (CNJ) rules allow the parties to waive submission of the seller’s litigation and tax-debt certificates where they so agree. Even when such certificates are not formally required, however, buyers customarily obtain and review them as part of their standard risk-assessment process.

The process usually starts with a private sale and purchase agreement setting out the terms, such as price, conditions, and deadlines. For properties valued at more than 30 minimum wages, a public deed and subsequent registration with the Real Estate Registry are required to transfer ownership. As an alternative, parties may transfer shares in a property-holding company, but structures lacking a genuine business purpose may be recharacterised as abusive tax planning, exposing the parties to additional tax assessments and penalties.

Liability is split between real (in rem) and personal obligations. Real obligations (such as property taxes and condominium charges) are attached to the asset and, as a rule, pass to the buyer upon registration of the transfer. Personal obligations (such as brokerage fees and purely contractual debts of the seller) remain with the seller, although tax liabilities arising from abusive or fraudulent transactions may still affect the buyer and jeopardise the validity of the transaction.

Acquiring real estate via share transfers of the property-holding company is common in Brazil, especially for high-value assets and large projects held through special purpose entities (such as shopping centres and corporate portfolios). Since the real estate transfer tax (ITBI) is generally triggered only when a transfer is registered in the property’s land registry, a pure equity deal does not, in principle, give rise to ITBI.

However, tax authorities scrutinise these structures closely. Where a share deal is viewed as merely disguising an underlying property transfer, without genuine business substance, it may be recharacterised for tax purposes, with ITBI and penalties imposed on the grounds of abusive tax planning.

Under Statute No. 8,245/1990 (Urban Lease Law), the purchaser of a leased urban property is, as a rule, subrogated in the landlord’s rights and obligations, including the right to receive rent, unless the parties agree otherwise. The buyer may, however, terminate the lease, in which case the tenant must vacate within 90 days and may be entitled to compensation for good-faith improvements and authorised constructions. It is well established under Brazilian law and case law that, in urban leases, the tenant’s right to indemnification for improvements and accessions may be validly waived, provided such waiver is express. If the lease contains a non-termination clause in the event of sale and this clause is duly recorded in the property’s registry prior to the transfer, the purchaser is bound by the lease and cannot terminate it on the basis of the sale. In rural leases, the purchaser is mandatorily subrogated in the landlord’s position and may not terminate the agreement due to the sale of the property.

Various rights, interests and burdens may attach to real estate in Brazil, including: (i) Proprietary interests listed in Article 1,225 of the Civil Code (e.g. ownership, surface rights, easements, usufruct and in rem security interests such as mortgage and fiduciary ownership); (ii) Voluntary restrictions (such as inalienability, non-attachment and non-communicability clauses), often used in wealth and succession planning; (iii) Homestead protection, whereby the family home may be legally or contractually exempted from attachment; and (iv) Personal rights with real effects, such as rights of first refusal held by tenants or co-owners, which arise contractually but may affect subsequent transfers. In general, these rights and burdens are protected through registration in the competent Real Estate Registry, which ensures publicity, priority and enforceability against third parties, subject to specific statutory rules for each type of right.

Brazilian law does not generally recognize a split between legal and beneficial ownership in the common-law sense, and trust structures are not part of the domestic system. The closest functional equivalent is usufruct, under which the usufructuary holds the right to use the property and receive its income, while the bare owner retains title and reversion. Usufruct is created by registration in the property’s registry and may be temporary or lifelong. In financing structures, fiduciary ownership (alienação fiduciária) places title in the secured creditor for security purposes, but this is treated as a security interest, not as a true separation of legal and beneficial ownership akin to a trust.

In Brazil, real estate ownership is established exclusively through registration in the public Real Estate Registry, which identifies only the registered owner (individual or legal entity). Ultimate beneficial owners are not disclosed in the land records.

However, companies (including foreign vehicles and offshore structures) that hold Brazilian real estate are subject to beneficial-ownership disclosure before the tax authorities. Law No. 14,754/2023 and Normative Instruction RFB No. 2,119/2022, as recently tightened by IN RFB No. 2,290/2025, require entities with a CNPJ, as well as certain foreign entities and trusts holding rights in Brazil, to identify their ultimate beneficial owners via the new Digital Beneficial Owners Form (e-BEF), within short deadlines and on an annual basis. These obligations are part of a broader transparency and anti-money laundering agenda, explicitly aimed at curbing the use of complex ownership chains by criminal organisations, but the information is available to regulators and law-enforcement agencies, not to the general public through the property registry.

Urban properties are subject to the Urban Property Tax (IPTU), levied by municipalities. Although legally owed by the owner, IPTU is often contractually passed on to tenants. Municipal fees, such as the Public Cleaning Fee (TLP), may also apply. Rural properties are subject to the federal Rural Land Tax (ITR).

Transfers for value trigger Real Estate Transfer Tax (ITBI), a municipal tax usually borne by the buyer, and transfers by inheritance or gift are subject to state Inheritance and Gift Tax (ITCMD). Capital gains tax also applies where the sale price exceeds the tax basis of the property or of the shares in the property-holding company.

Under Complementary Law No 214/2025, Brazil’s VAT (IBS/CBS) will apply to real estate transfers, with a transitional period beginning in 2026 and full rates from 2035.

Commercial urban leases are governed by Statute No. 8,245/1990, but contractual terms are largely freely negotiated. Rent is usually paid monthly, subject to annual adjustment based on inflation. The landlord is responsible for structural repairs and the tenant for ordinary maintenance and most operating costs (often including condominium charges, utilities and IPTU/TLP). Lease terms are freely set (fixed or open-ended), and the law provides key mandatory protections, such as limits on security deposits, rules on eviction and a statutory renewal right for qualifying commercial tenants. Rural leases are more strictly regulated under the Land Statute, with minimum terms (typically three or seven years, depending on use), requirements for written contracts and additional public-policy constraints.

In case of default under an urban commercial lease, the landlord may file eviction proceedings to recover possession and claim unpaid rent and charges. Leases usually provide for contractual penalties in tenant-fault termination, either as fixed sums or calculated over the remaining term. In built-to-suit leases, the Urban Lease Law allows a penalty equal to all outstanding rent, reflecting the landlord’s upfront investment. To mitigate credit risk, landlords typically require guarantees, such as sureties, security deposits, rent-guarantee insurance or capitalisation bonds, which may be enforced on default. Where full rent is paid in advance, additional guarantees are not permitted.

Land use, planning and zoning are primarily regulated at municipal level, through the Master Plan (Plano Diretor) and zoning laws adopted under the City Statute (Statute No. 10,257/2001). These instruments define permitted uses, density, height limits, floor-area ratios, parking requirements and special zones (e.g., historic, environmental or social-interest areas). Development typically requires prior municipal licenses and permits, often coordinated with environmental authorities for projects with significant impact. Compliance is enforced through administrative sanctions, including fines, embargoes, demolition orders and refusal or cancellation of occupancy permits.

Brazil adopts a strict liability regime for environmental damage. Environmental obligations are treated as propter rem, attaching to the property rather than the conduct of a specific owner. Purchasers may therefore be held liable for pre-existing contamination, as consolidated under the National Environmental Policy (Statute No. 6,938/1981) and the Superior Court of Justice’s Theme 1,204 (binding precedent), even if they acted in good faith, retaining only a right of recourse against prior owners or polluters. Tenants and occupiers may also incur direct liability where their activities cause or contribute to contamination.

Brazil has historically had no general obligation for energy-performance certification of buildings, nor broad minimum-efficiency standards. This is changing: under CGIEE Resolution No. 4/2025, minimum energy-efficiency levels will apply to new buildings (and, in some cases, major refurbishments) from 2027, with requirements linked to building typology and use. In parallel, federal policy uses tax and regulatory incentives (for example, reduced federal taxes for high-efficiency data centres under recent measures) to encourage more efficient building design and operation. These incentives are targeted and do not amount to a universal building-rating obligation.

Although property rights are strongly protected under the Constitution, ownership is not absolute. Real estate may be expropriated for public necessity, public utility or social interest, upon prior and fair compensation in cash, reflecting market value, proven damages and statutory interest. These grounds cover, for example, infrastructure works, urban redevelopment, agrarian reform and social-housing programmes. The Constitution also admits sanction-based expropriation without compensation when property is used for unlawful purposes expressly defined by law, such as illegal drug cultivation or practices analogous to slave labor.

Yes. Brazilian law recognises several forms of in rem security over real estate, chiefly mortgage (hipoteca) and fiduciary transfer of title (alienação fiduciária), both created by written agreement and registration with the Real Estate Registry, which ensures publicity and priority.

Traditionally, mortgages (hipoteca) were enforced only through judicial proceedings, while fiduciary transfers followed an extrajudicial foreclosure route and therefore became the market standard in real estate finance. Statute No. 14,711/2023 (New Legal Framework for Guarantees) now allows a fully extrajudicial foreclosure procedure for mortgages, broadly aligned with fiduciary transfer (registration of default, auction rounds and return of any surplus to the debtor). The same statute introduced a home-equity regime, permitting multiple real estate liens (mortgage or fiduciary) over a single property, provided the total secured amount does not exceed a statutory percentage of the appraised value, with priority determined by registration order.

The main upfront costs are notarial and registration fees, determined under state legislation and the fee schedules issued by state courts, usually calculated over the secured amount. ITBI (Real Estate Transfer Tax) is not levied on the creation of a mortgage, as there is no transfer of ownership, and is likewise not charged on the constitution of a fiduciary transfer of title, in this case due to a specific statutory exemption rather than the absence of transfer as such. By contrast, when title is consolidated in favor of the fiduciary creditor following default, Brazilian case law treats this consolidation as a taxable transfer, and ITBI is considered due at that stage.

Brazil does not recognise common-law trusts, and mortgage security is typically created directly in favor of the creditor (bank or lender) by way of mortgage or fiduciary transfer of title, both of which must be registered over the property. Multiple mortgages and fiduciary liens over the same asset are expressly permitted (subject to statutory limits), with priority determined by the order of registration. Functional equivalents to trust-based security appear mainly in securitisation structures, through fiduciary assignment of receivables, rather than via a separate trustee holding legal title to the underlying real estate.