Today Brazil ranks as the 13th largest economy in the world, following a recent boost in GDP. And such growth is set to continue, with the nation’s economy predicted to become the fifth biggest on the planet by 2035. Such figures bode well for investors, though with the global recession still biting, there is a degree of caution that should be exercised. The Brazilian economy itself has been relatively well-managed. The country is stable, with a good amount of currency reserves saved during the good times: therefore, though the effects of the global recession are still being felt it isn’t as bad as in some other Latin American countries.

However, many investors are choosing Brazil for potential capital growth rather than rental yield. Some areas of North Eastern Brazil, especially around Bahia and Fortaleza, have been attracting as much as 20 per cent annual capital appreciation over the past few years – and other areas are expected to rise at a healthy rate too. When the global economy makes it out of the darkness of recession, Brazil should be able to continue on this development path.

New-build homes are far more prevalent on the coast, where two-thirds of the country’s population reside. These modern developments complement the existing hotel complexes, and local facilities and amenities, that come hand in hand with beach life – making such a purchase suitable for short-term lets. If you are willing to look further inland however, you may find building your own home an attractive option, as both land and labour are reasonably priced.

The purchase process in Brazil is relatively simple once you have obtained your CPF (taxpayer identification) number. However it is crucial that you seek the advice of a good, independent lawyer. This is especially true if you are buying a resale home, as checking for clean title can be a complicated and painstaking process.

Once all of the relevant searches have taken place you will need to open a local bank account, as the purchase funds must be visibly traceable from the buyer’s bank account into the vendor’s.

In addition, all monetary transactions will need to be registered as a foreign investment with the bank of Brazil, but this cost should be covered in your legal fees. You will be required to pay a deposit of around ten per cent when you have had your offer accepted – although this figure can range from five to 20 per cent. The balance is paid on completion, and the entire process is overseen by a notary public.

Even though all contracts are processed in both Portuguese and English, it is advisable to hire a translator if your solicitor isn’t fluent in both languages.

Brazil is perhaps one of the few emerging markets that allows foreign buyers to own both land and property in their own names on a 100 per cent freehold basis – making the buying process relatively straightforward. However, before you can buy a property in Brazil, you must obtain a CPF (Cadastro das Pessoas Físicas, or Registry of Physical Persons) number, which can be acquired via the Brazilian embassy in the US or any European nation for a small fee of around between $15 USD and 10 Euro).

Once issued, this tax registration number will enable you to open a bank account and apply for utilities. Although, perhaps its main aim is to register the amount of capital that you are planning on bringing into Brazil, it also allows you to repatriate your funds should you decide to sell your property. If you are buying a home that was built after 1973, it will come with a legal document know as a Matrícula. Similar to title deeds, this document lists a detailed property description, all previous owners, the boundary details, any outstanding debts and all legal, financial and judicial transactions relating to the property.

In total, fees and taxes come in at around seven per cent of the purchase price. This is broken down into legal fees of two per cent, stamp duty of two to three per cent (depending on the price of the property) and registration fees of two per cent. Estate agents fees of up to six per cent are paid by the vendor. Once you have obtained your CPF number, you will automatically become liable for income tax if you rent your property out – this operates on a sliding scale of 15 to 27.5 per cent. When you come to sell your Brazilian home, you will need to pay capital gains tax – again this works on a sliding scale of 15 to 27.5 per cent. This is calculated on the difference between the final selling price and the registered buying price – less any maintenance fees and travel costs. Be aware that the registered buying price is set by City Hall, and therefore may not be a true reflection on what you actually paid. However, if you are planning on reinvesting the profit back into a Brazilian property, then you will generally be exempt from CGT.

Tourism is a new industry in Brazil, increasing by 30 per cent in the last year alone, and the property market is hot on its heels. And, despite being rather new on the international property-buying radar, this South American country seems to be ticking all of the right boxes for investors, holiday homers and retirees alike. A diverse landscape, rich culture, idyllic climate and affordability (the cost of living in Brazil is just 15 per cent of those of the US, 20 per cent of the UK) are just some of the reasons why buyers have started flocking here – but property prices are the reason they are staying. While the initial flood of interest in property in Brazil was from the investment market, buyers are now seriously looking for holiday homes and potential retirement destinations for the future as flight connections from the Europe and America improves and flight time is down to around 6 hours. When the world begins to clamber its way out of the downturn, Brazil should be in a good position to come to the fore.

The popular carnival city of Rio de Janeiro boasts 45 miles (72 km) of white beaches – including Copacabana – meaning that it is popular for surefire tourist lets. Meanwhile, Sao Paulo is the government and financial centre of the country and, at an 11-hour flight from the Europe, promises good business lettings.

However the best potential for buying property seems to lie in the northern beach resorts. The natural beauty of these areas have been complimented by a range of high-quality developments and inward investment, meaning that capital growth is on the up.

But a purchase here isn’t all about money. Some of the purest water and cleanest air in the continent has been found here, while the city of Natal boasts the highest quality of life and the lowest crime rate in the nation. Moreover, it is the resort of Bahia which is attracting the most attention from European buyers. Glorious beaches and an excellent climate, compliment good value for money – a mix which many purchasers believe will pay dividends in the long run.

If you wish to obtain a permanent residence permit you will need to prove that you have funds in excess of R$500,000 (Click https://www.oanda.com/currency-converter/en/?from=BRL&to=USD&amount=1 for currency conversion), but even then this visa is only issued on a five-year conditional basis. In order to re-validate your visa you must show the Federal Police how you have invested in, and therefore improved, the local economy. However, if you are planning on employing Brazilian staff, whether in the home or workplace, then this initial investment figure may be reduced.

Meanwhile, if you are thinking of retiring to Brazil then you must be over 50 and receive a monthly pension of over US$2,000 per calendar month. Of course, if you are only planning to stay in Brazil for short periods of time, then a tourist visa will suffice. Tourist visas forbid you from working, and you are only allowed to stay in the country for up to 90 days. You will also need to produce a return ticket on arrival.