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Foreign ownership ban should help clean-up Brazilian market

Plans by the Brazilian authorities to ban foreign ownership of agricultural land should help prevent unethical practice in the sale of Brazilian real estate to overseas buyers, according to one experienced international agent working in the country.
Richard Cash, Director of Invest in Brazil, believes the upcoming ban is positive news for reputable agents and developers already working in the market:
“One of the aims of the legislation is to stop foreign nationals buying up old farms and speculating on gaining planning permission for a change of use. In many cases, people are buying options to purchase the land and reselling these options in Europe. You go to prison for this in Brazil but it goes on in Europe and investors can have their fingers burnt”.
“The likely result is improving trust and a limitation on supply which will raise prices over the longer term, which can only be a good thing for current investors”.
CHECK FOR IDEMA AND SUDEMA LICENCES
The ban on foreigners owning residential land is highly unlikely to be applied retrospectively according to Cash. Any land which has been approved by the state’s environmental agency (IDEMA or SUDEMA depending on the state) will almost certainly escape the ban as preventing foreign investment in residential property is not the aim of the legislation.
The Invest in Brazil team have employed lawyers to go through the legislation in fine detail to assess the risk, however small, of the threat to legal title as a result of the legislation. |