Can a Brazilian citizen buy property in Italy?

Buying Homes and Other Urban Property

A Brazilian citizen may, where the above requirements are satisfied, purchase in Italy a main residence, a second home, an apartment, a villa, commercial premises, an office, a garage or another urban property.

The transaction remains subject to the ordinary rules of Italian law governing real estate purchases.

The Italian Notary verifies, among other matters, ownership and title to the property, continuity of registrations, the existence of mortgages, attachments or other encumbrances, the cadastral and planning documentation required by law, the applicable tax treatment, the identification of the parties and compliance with anti-money laundering legislation.

Agricultural Land and Rural Property

Particular attention is required where the proposed purchase concerns agricultural land or property which is genuinely rural in nature.

Brazilian legislation, principally Lei no. 5.709/1971 and Decreto no. 74.965/1974, establishes a specific regime for the acquisition of rural real estate by foreign nationals.

For a foreign natural person, the ordinary regime requires residence in Brazil. A first acquisition of rural property not exceeding three Módulos de Exploração Indefinida (MEI), located outside areas subject to special border or national-security restrictions, may be made without prior INCRA authorisation, without prejudice to the other statutory requirements.

For properties exceeding three MEI and up to the ordinary limit of fifty MEI, INCRA authorisation is required. Where the property exceeds twenty MEI, an exploitation project must also be submitted. A MEI does not represent a uniform number of hectares but varies according to the area in which the property is situated.

Brazilian legislation also imposes limits on the overall concentration of rural land held by foreign persons within an individual municipality and provides additional controls for land situated in border zones or areas relevant to national security.

A foreign national who is not resident in Brazil cannot therefore be treated, under the ordinary regime, in the same manner as a resident foreign national. Brazilian legislation provides a particular regime for a foreigner intending to immigrate to Brazil, allowing, subject to specific conditions, the conclusion of a preliminary agreement linked to the subsequent establishment of domicile in the country.

These restrictions do not automatically prevent a Brazilian citizen from acquiring in Italy any property having agricultural or rural characteristics. For the purposes of reciprocity, a concrete comparison must be made, taking into account the nature and size of the Italian property, the purchaser’s personal status and the conditions under which an Italian citizen could carry out the corresponding transaction in Brazil.

The mere fact that a property is situated in a rural area, that a building has a rural cadastral classification, or that an urban property includes a small area of appurtenant land is not, in itself, sufficient to equate the transaction with the acquisition of rural property governed by the Brazilian restrictions.

Where the proposed transaction includes agricultural land or rural property of independent significance, reciprocity must therefore be specifically assessed by the Italian Notary before completion.

Brazilian Companies

Companies incorporated under Brazilian law may carry out real estate and corporate transactions in Italy where the relevant requirements concerning legal capacity and, where applicable, reciprocity are satisfied.

The Italian Notary verifies the company’s legal existence, the law governing it, its constitutional documents, the authority of the corporate bodies and representatives involved in the transaction and, in accordance with the applicable legislation, the identification of the beneficial owner and the other anti-money laundering requirements.

Where a Brazilian company intends to acquire agricultural land or rural property, a specific assessment is also required from the standpoint of reciprocity, since Brazilian law provides separate conditions and authorisation requirements for foreign legal entities acquiring rural land.

Marital Property Regime

Where Brazilian law governs the spouses’ matrimonial property regime, the ordinary regime, in the absence of a valid matrimonial agreement and subject to cases in which Brazilian law requires a different regime, is comunhão parcial de bens, or partial community of property.

Under this regime, property acquired for consideration during the marriage generally becomes part of the common estate even where the acquisition is formally made in the name of one spouse only. Property owned before marriage and property subsequently received by inheritance or gift generally remains separate property, subject to the further rules and exceptions provided by Brazilian law.

The Brazilian comunhão parcial de bens shares certain features with the Italian statutory community of property regime, but the two systems are not legally identical and should not be treated as automatically equivalent.

In marriages involving international elements, the law actually governing the matrimonial property regime must first be determined. Where Regulation (EU) 2016/1103 applies, consideration must be given to any valid choice of law made by the spouses and, in the absence of such a choice, to the connecting factors laid down by the Regulation, beginning with the spouses’ first common habitual residence after the marriage.

The Italian Notary must therefore determine the applicable position by considering the date and place of the marriage, the spouses’ nationalities and habitual residences and the existence of any matrimonial property agreement.

Powers of Attorney Executed in Brazil

Powers of attorney executed in Brazil may be used for Italian notarial transactions where they satisfy the formal and substantive requirements applicable to the transaction for which they are intended.

The Italian Notary verifies the identity of the principal, the authority before which the document was executed or authenticated, its formal validity, the sufficiency and specificity of the powers granted to the attorney and the suitability of the document for the intended transaction.

Where required, the power of attorney must bear an Apostille and be accompanied by an Italian translation suitable for its intended legal use.

Apostille and Brazilian Public Documents

Brazil is a Contracting Party to the Hague Convention of 5 October 1961 on the Apostille, which entered into force for Brazil on 14 August 2016.

Brazilian public documents falling within the scope of the Convention and intended for use in Italy may therefore be provided with an Apostille instead of diplomatic or consular legalisation where such authentication is required.

The Apostille certifies the formal authenticity of the public document. It does not replace the Italian Notary’s assessment of whether the document is legally suitable and capable of producing the effects required for the proposed transaction.

Translation of Documents

Documents drawn up in Portuguese and intended for use in connection with an Italian notarial transaction must, where necessary, be accompanied by an Italian translation prepared in a form suitable for their intended legal use.

The Italian Notary identifies in advance the documents required for the transaction and verifies the consistency of personal details, legal terminology and the translation with the deed to be executed.

Tax Considerations

Brazilian citizenship does not, in itself, create a special tax regime for the acquisition of property in Italy.

The ordinary provisions of Italian tax law apply, taking into account the nature of the property, the characteristics of the transaction, the position of the seller and purchaser and any tax relief available where all statutory requirements are satisfied.

Final Remarks

Brazilian citizens may generally acquire real estate in Italy. Where a Brazilian citizen is lawfully residing in Italy under one of the qualifying residence permits recognised by Italian immigration legislation, the reciprocity requirement does not need to be verified.

In other cases, the acquisition of urban property is generally permitted, while agricultural land and property which is genuinely rural in nature require a specific assessment because Brazilian law subjects the acquisition of such assets by foreign nationals to residence requirements, quantitative limits and, in certain circumstances, administrative authorisations.

The legal classification of the property, the purchaser’s personal status, any applicable matrimonial property regime, powers of attorney and documentation originating in Brazil must therefore be considered together.

The final determination as to whether the proposed acquisition may proceed must always be made by the Italian Notary on the basis of the specific transaction and the legislation applicable at the time of completion.