Comunication / News Clipping - ADIT Brasil - Association for Real Estate and Tourism Development of Brazil

Comunication / News Clipping

july 23, 2010

A smart way to invest in real estate

Many Brazilians know that to be made partners of a giant like Vale or Petrobrás, all you have to do is buy stock in BM&FBovespa. By choosing this option, the investor becomes partners of a solid company with enormous competitive advantages, including a regularly adjusted source of income and interest on their own capital. If everything goes well, they even get a return on their purchases. What few know is that by doing so with companies, it is likewise a possibility to invest in large real estate options – such as Higienópolis in São Paulo – which would lead to rent receipts and future property value.

This type of investment can be made through property funds. True, it is still unpopular in Brazil, but according to the Property Value Committee (CVM, acronym in Portuguese), at the beginning of 2010, around 5.6 billion reals were invested in property funds – against 300 billion dollars that were invested in the United States. Specialists predict that because of collapsing interest rates, this number will increase exponentially during the coming years in Brazil. For who thinks it’s time to retrace their investment steps, specialists say that they are at least ten advantages in buying shares from property funds instead of acquiring property to let. Portal EXAME explains each of these benefits below:

Financial incentives: when one rents a property, they would have to pay Federal tax of approximately 27.5% of the profit obtained on Income Tax. But with real estate funds, there is no income tax collected on profit when less than 10% of shares are owned by an investor. The fund also needs more than 50 investors and shares must be exclusively negotiated through Bovespa or an organized OTC. Seeing as property fund administrators know how to take advantage of this financial incentive helps to attract investors. All products offered to Brazil’s population follow the same principles.

Fonte: Portal Exame

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