Great site with great info and resources...thanks!

The inventory of renovated apartments is generally pretty weak in Rio so I'm considering flipping a property in Zona Sul (buy, renovate and sell) and was curious about the tax implications (I have dual citizenship).

I know in the US, tax goes down to 15% and 0 if you've lived in the unit for at least year or two respectively. Are there similar laws in Brazil? If so, what are the percentages? I might end up living there and holding it for a year if the taxes differences are significant.

In general, anyone have thoughts on the RE market in zona sul in Rio--especially for smaller higher end units?
Thanks-
Ricardo

Hello Ricardo,

Thank you for your kind comments.

I am not sure about US tax implications, you are better off consulting a US-based CPA. In Brazil, you will have to pay capital gains tax - 15%. Of course, there is a depreciation (about 4% per year) and you can add the amount spend on the renovation (or a part of it) to the acquisition sum. There are actually ways to reduce your overhead...

If you own only one property under R$440K and hold it for more then 5 years, you will be exempt of the Capital Gains tax all together.

Overall, Brazil is not conducive to flipping. Liquidity is not nearly as good as it used to be in the States.

Regards,
Boris

YOU ARE ALSO EXEMPT IF YOU PLOUGH THE MONEY BACK INTO ANOTHER BRAZILIAN PROPERTY WITHIN 180 DAYS

Well, not actually exempt, it is more correct to say the tax payment is deferred. You can apply for this deferral once every five years and the properties sold and purchased have to be residential.

Thank you for reminding.

Dear Forum Participants, most importantly is that the owner must be a legal resident in order to claim this exemption.

Good luck!