Buying Real Estate in Brazil for Foreigners: New Construction from a Developer (na planta)
Brazil offers attractive opportunities for purchasing real estate. Newly built apartments purchased directly from the developer—often before construction begins or while it is still underway—are particularly popular. In Brazil, this type of real estate purchase is known as “compra de imóvel na planta.”
For foreign buyers, such a purchase can be financially attractive and offers greater security than buying an existing property. However, the legal framework, contract terms, and payment terms differ—in some cases significantly—from the procedures customary in Germany.
Buyers should therefore carefully review the obligations they are undertaking, particularly in the case of real estate development contracts. This is because not every contractual clause that is standard in Brazil is necessarily advantageous from the buyer’s perspective.
In this article, you’ll learn about the unique aspects of buying a new-construction property in Brazil, the risks buyers should be aware of, and why it may be a good idea to have a lawyer review the purchase agreement before signing it.
What does“na planta”mean when buying real estate in Brazil?
The term “na planta” essentially means “off-plan.” It refers to the purchase of a property that is still in the planning or construction phase. The buyer therefore enters into a contract with the developer (incorporadora) before the property is completed.
The contract is often a so-called "Contrato de Promessa de Compra e Venda," that is, a preliminary agreement regarding the future purchase of real estate.
Typically, the parties first agree on a down payment and additional payments during the construction phase. Upon completion, the remaining purchase price is paid, using bank financing if necessary.
A key advantage may be that new-construction properties can be purchased early on and payments can be spread out over a long period of time without having to pay the high mortgage interest rates that are common in Brazil.
However, this comes with specific risks: At the time the contract is signed, the apartment may not yet exist. The buyer is therefore heavily dependent on the developer to fulfill the contract.
Are foreigners allowed to buy new-construction properties in Brazil?
Generally speaking, yes. Foreign nationals are permitted to purchase urban real estate in Brazil. A Brazilian residence or Brazilian citizenship is generally not required for this.
German citizens residing in Germany can therefore also buy an apartment in Brazil.
The following documents, in particular, are required for the practical processing of this matter:
A valid identification document, usually a passport.
A Brazilian tax identification number (CPF).
Documentation regarding marital status and the marital property regime.
Depending on the specific arrangement, additional documents, translations, or powers of attorney may be required.
Special considerations may apply to real estate in certain coastal, border, or special areas, as well as when purchasing rural properties.
In contrast, when purchasing a new-construction apartment in a major Brazilian city through traditional means, there are generally no restrictions on purchase based solely on foreign nationality.
What is the process for buying a new-construction property in Brazil?
The purchase of an off-plan property typically takes place in several steps.
Selecting a Property and Making a Reservation
First, the buyer selects an apartment in a new construction project. Contact is often established through a real estate agent (corretor de imóveis).
Reservation agreements or down payments may already be required at this stage. Buyers should therefore review the legal obligations that arise as a result.
Submission of the Developer Agreement
The developer then submits a draft contract. This document sets forth the terms of the purchase, including, in particular, the purchase price, the payment schedule, provisions regarding completion, and the rights and obligations of the parties. This phase, in particular, is especially important for a legal review.
Contract Signing and Construction Phase
After the contract is signed, the buyer makes the agreed-upon payments. During the construction phase, additional price increases may result from contractual indexation.
Completion and Transfer of Ownership
Once construction is complete, the necessary administrative and land registry procedures will be carried out. Depending on the terms of the contract, the final transfer of ownership will then take place.
It is important to note that simply signing a purchase agreement does not mean that the buyer has already become the owner of the property. In general, ownership is acquired only upon the corresponding entry in the Brazilian Real Estate Registry (Registro de Imóveis).
What are the risks involved in buying a property off-plan?
The greatest risks often lie not in the purchase price, but in the numerous additional contractual provisions.
Construction delays and late handover
Many real estate development contracts specify an estimated completion date. In addition, they often include a so-called “cláusula de tolerancia,” which grants the developer an additional period of time to complete the project.
Under certain legal conditions, Brazilian law permits an expressly agreed grace period of up to 180 calendar days.
For buyers, this means that the actual closing may take place much later than originally expected.
The contract should therefore be reviewed to ensure that:
What is the binding completion date that has been agreed upon?
Is there an additional grace period?
What rights do you have if these deadlines are exceeded?
What claims for compensation can the buyer assert?
Significant construction delays can cause financial disadvantages, especially for buyers who plan to live in the apartment themselves or rent it out.
Purchase Price Adjustments by the INCC
One risk that is often underestimated is the contractually agreed adjustment of the purchase price installments to a Brazilian construction cost index.
For this purpose, the INCC (Índice Nacional de Custo da Construção) is used for this purpose.
While buyers from Germany may assume that the purchase price has been largely agreed upon, the outstanding payment amounts in Brazil may increase during the construction phase.
Here's an example:
A buyer purchases a newly built apartment for 1,000,000 R$. Of this amount, 200,000 R$ is a down payment, and 800,000 R$ is to be paid at a later date.
If the outstanding amount increases by a total of 8% due to a hypothetical index adjustment, the originally agreed-upon 800,000 R$ could become 864,000 R$ in mathematical terms.
This would mean the buyer would have to come up with an additional 64,000 reais.
Whether and to what extent such an adjustment actually takes place depends on the specific terms of the contract, the applicable index, and the payment dates.
For this reason, it is important to assess how the actual total purchase price might change before the contract is signed.
Withdrawal from the Purchase Agreement and Loss of Amounts Already Paid
Another important point concerns the termination of the contract.
For example, what happens if the buyer no longer wishes to purchase the property, financing falls through, or the buyer’s financial circumstances change?
Brazilian law provides that, for certain real estate development contracts, substantial amounts may be withheld if the contract is terminated due to the buyer's fault.
Depending on the legal classification of the construction project and the contractual terms, the contractual penalty may generally amount to up to 25 percent—or, in the case of a so-called “patrimônio de afetação,” up to 50 percent—of the payments made. Additional deductions provided for by law may apply.
Repayment terms also vary depending on the specific circumstances of each case.
The economic consequences of resigning can therefore be significant.
This makes it all the more important to review the relevant clauses before signing the contract and to renegotiate them if necessary.
Risk of the Developer's Insolvency
With a new construction project, there is always the risk that the developer will run into financial difficulties during the construction phase.
Brazilian law provides for a special protection model known as the “patrimônio de afetação,” under which the assets of a construction project are, in principle, separated from the developer’s other assets.
This can improve buyer protection, but it does not completely eliminate the financial risk.
Before making a purchase, you should therefore check, among other things, whether the construction project is properly registered, what encumbrances exist, and what legal safeguards are in place.
What documents should be reviewed before buying a property?
Reviewing the sales contract alone is not always sufficient.
Depending on the project, the developer's and the property's supporting documents should also be taken into account.
These include, in particular:
Updated land registry extract: the most recent land registry extract for the parcel of land or property.
Incorporation Memorandum: the registered documents of the real estate development project.
Contrato de Promessa de Compra e Venda: the actual draft contract.
Descriptive specifications: Description of the planned equipment and construction work.
Payment schedule: A payment plan that includes agreed-upon adjustments.
Documents related to the developer: depending on the risk profile, these may include corporate documents and relevant certificates.
The review of these documents is intended to ensure that the buyer not only understands the contractual payment terms but is also able to comprehend the legal basis of the construction project.
Can real estate development contracts in Brazil be renegotiated?
Many buyers assume that a contract provided by the developer cannot be modified.
In fact, Brazilian developers often use standardized contract templates. However, this does not mean that all clauses are non-negotiable. For foreign buyers in particular, certain clauses may be completely impractical or unreasonable.
In our law practice, the following issues frequently come up during negotiations:
More specific provisions regarding completion and handover.
Reasonable contractual penalties for delays.
Transparent rules regarding purchase price indexation.
Adjustments in the Event of Resignation or Termination of the Contract.
Clarifications regarding the amenities and the required condition of the building.
Provisions regarding payment and the final transfer of ownership.
The key here is not only to identify legal risks, but also to develop specific alternative contract clauses and advocate for them with the developer.
Whether the developer agrees to a change is always a matter to be decided on a case-by-case basis.
A legal review of the contract can thus serve as the basis for subsequent renegotiation.
Why should foreign buyers have a lawyer review the purchase agreement?
Buying real estate in Brazil often presents unique challenges for German buyers.
The purchase agreements are written in Portuguese and are based on Brazilian law. In addition, the procedures and contractual terms differ significantly from those of a real estate purchase in Germany.
Therefore, it is not always enough to simply have the contract translated.
Rather, it is necessary to examine the legal and economic consequences of the individual provisions.
A legal review of a contract should, in particular, answer the following questions:
Is the acquisition sufficiently protected under the law?
What financial obligations actually arise?
What risks does the contract pose for the buyer?
Which contract clauses should be amended or supplemented?
What specific changes can be proposed to the developer?
Such a review can help prevent costly mistakes before the buyer enters into binding commitments.
Legal Review and Renegotiation of Contracts for Real Estate Purchases in Brazil
Our law firm advises German-speaking clients on the purchase of real estate in Brazil.
We place special emphasis on reviewing purchase agreements for the acquisition of new-construction properties directly from the developer.
Our services include, in particular:
Legal review of Brazilian real estate purchase agreements.
Review of the legal and financial risks associated with the contract.
Explanation of problematic contract clauses in German.
Development of specific proposals for changes.
Negotiations with the developer or its legal department.
Assistance with the further legal proceedings related to the real estate purchase.
We provide legal advice in collaboration with German and Brazilian attorneys, enabling us to offer services that take into account both German and Brazilian legal perspectives.
Are you interested in buying a new-construction property in Brazil and have you already received a draft contract?
Have a lawyer review the contract before signing it. If you wish, we can also negotiate the terms of the contract with the developer on your behalf.
Frequently Asked Questions About Buying Off-Plan Real Estate
As a German citizen, can I buy an apartment in Brazil without living there?
Yes. In general, German citizens can purchase municipal apartments even without having a Brazilian residence. Among other things, tax registration and the necessary purchase documents are required.
Do I have to pay the full purchase price of a new-construction property right away?
Not necessarily. For off-plan real estate, installment payments are common during the construction phase. The exact payment terms are specified in the contract.
Can the developer increase the purchase price retroactively?
Contractually agreed-upon index adjustments—for example, based on the INCC—may increase the amount still due. Therefore, the price calculation should be carefully reviewed.
Can I cancel the purchase of a new-construction property in Brazil?
Termination of a contract is possible under certain conditions. However, this may result in significant financial disadvantages. The decisive factors are the reason for termination, the terms of the contract, and the applicable legal provisions.
Do I have to accept the developer's purchase agreement as is?
No. Even standardized real estate development contracts can, in principle, be subject to contract negotiations. Whether the developer accepts specific changes depends on the individual case.
When should I consult a lawyer?
Ideally, this should be done before making a binding reservation or signing the purchase agreement. This allows potential risks to be identified early on and any problematic provisions to be negotiated, if necessary, before the contract is finalized.
