In Brazil, besides the price paid for the property, you must have an additional reserve of around 5% of the purchase price for the following expenses:
– Tax on transfer of immovable property (ITBI – Imposto de Transferência de Bens Imóveis) “costs an average of 2.5% of property value, but may exceed 3%. Its paid to the municipality(city, town) where the property is located in.
– Registration fee of the property: between R$ 400.00 to R$ 3,400.00 for properties whose value is between R$ 10 thousand to R$ 175 thousand. Paid to the Registry of Deeds(Cartório de Registro de Imóveis). It’s around 0,7% of the price of the property in most places.
– Rate of real estate bookkeeping(or real estate deed transfer) between R$ 400.00 to R$ 3,400.00 for real estate value between R$ 10 thousand and R$ 175 thousand, paid to the Notary of Notes, Registry of Notes (Cartório de Notas, Responsible for drawing up the deed of purchase and sale).
– Laudêmio de Marinha: Charged by the Union (Federal Government) only in transactions involving properties located in the range of the sea(área de marinha), usually up to 80m from the sea. Corresponds to 5% of property value.
– Laudêmio Municipal: there are a few municipalities that also charge laudêmio on properties located in some areas of the city. The average fee is 2% of property value. Not so common, but for example, there are religious towns “owned” by the church or where the church has main role, where the church charges a laudêmio fee. Usually religious towns.
– Bank charges: if the property is acquired through bank financing, the buyer must be ready also for the fees charged by the financial institution, such as fees for property evaluation, administration fees, opening credit property insurance, life, etc.
– Property tax: IPTU (Urban Building and Land Tax): a municipal tax collected annually by the Town Hall from owners of properties. Its rate and its calculation methodology vary from one municipality to another, about 1% of market value.