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Rental Income Taxation for Non-Residents

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This topic contains 0 replies, has 0 voices, and was last updated by  Silpy Gomden 6 years, 3 months ago.

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  • #276455

    kvstark
    Member

    Mr. Gringoes,
    This is my first post. I have extensively tried to find information about this topic but it’s been very difficult. I would appreciate any input you might have. Thanks in advance!
    I am about to travel to Brazil to sort out all the paper work that comes with having bought an apartment that is now finished. I am not Brazilian and I live in the UK with no plans to move to Brazil. Therefore, I’d like to rent out the apartment. I’d like to know which are my tax obligationswith the Receita Federal.
    What I think is the most accurate answer to this question is:
    “Oseu procurador deve recolher o Imposto de Renda sobre alugu√ɬ©is de locador não-residente no Brasil, o qual dever√ɬ° recolher o imposto mensualmente utilizando no Darf o CPF do titular do rendimento e o c√ɬ≥digo de receita 9478

    If that’s true, implies that I’ll need some sort of accountant doing some paperwork every month for me? This sounds like a huge overhead!
    Do you have experience declaring rental income tax as a non-resident?
    Any comments will be helpful!

  • #276468

    sven van ‘t Veer
    Participant

    [QUOTE=clubifaximatic]
    “Oseu procurador deve recolher o Imposto de Renda sobre alugu√ɬ©is de locador não-residente no Brasil, o qual dever√ɬ° recolher o imposto mensualmente utilizando no Darf o CPF do titular do rendimento e o c√ɬ≥digo de receita 9478

    If that’s true, implies that I’ll need some sort of accountant doing some paperwork every month for me? This sounds like a huge overhead!
    Do you have experience declaring rental income tax as a non-resident?
    Any comments will be helpful!
    [/QUOTE]

    That is correct. You will need someone with a POA that receives the rent for you and makes monthly tax payments.
    Doesn’t have to be an accountant, can be a lawyer or a real estate agent or someone else.
  • #276478

    miguel
    Participant

    It’s not a big deal. First of all, your non-resident tax rate on rental income is 15%. Won’t you be using a property management company to help rent out your apartment, particularly for short-term rentals? Generally, aside from assisting with cleaning services in-between such rentals, they would facilitate payment of your property taxes, as well as your condo fees (usually the last two are paid by your renter in long-term rentals), as well as utility bills. Just use them, tell them to withhold the taxes from your rental income and pay them on your behalf (be sure and get the DARF receipts) – within their overall management fee.
    With the current landscape of the local rental markets, they will fall over themselves for your business – this all assumes of course they can get your property rented in the first place.
    miguel2015-07-25 23:34:22

  • #276492

    kvstark
    Member

    Friends,

    Thank you for your replies. It is really encouraging as I did not think a state agent could handle this for me. I will certainly find out and hopefully there will be no extra charge on it.
    One of the state agents I contacted told me that I would need a Brazilian bank account to do business with them. That will be my next challenge as I’ve heard many times how difficult it can be for a non-resident to get one. I am hoping that having a property deed will help..
    Thank you for providing such quality feedback.
  • #276575

    Gieke
    Participant

    check out the forum how to get a cpf : you’ll need it to open a bank account…

  • #276888

    kvstark
    Member

    An Update:
    My preferred state agency said they don’toffer this service (handling property taxes)
    Do you know how much an accountant, lawyer, whoever doing this task could be charging? I’m trying to picture how would that work…because if the tenant is paying to the state agency, how does the person declaring the taxes get hold of that amount? And where does it get the money from? It feels to me that there is room for many problems here, specially if this turns out to be a monthly task!
    Thanks a lot for being so helpful.

  • #276906

    sven van ‘t Veer
    Participant

    Although the real estate agency should do it, you can also do it monthly via carne leão.

    Art. 721. Compete ao procurador a reten√ɬßão (Decreto-Lei n√Ǭ∫ 5.844, de 1943, art. 100, par√ɬ°grafo √ɬ∫nico):

    I Рquando se tratar de aluguéis de imóveis pertencentes a residentes no exterior;

  • #276961

    kvstark
    Member

    @sven: Thanks so much. Do you mean I can do it myself? On your last reply I understood you confirmed I needed someone with POA..
    I’m trying to get in touch with other State agencies, there’s no much to choose sadly..
    When I get the picture of how this works practically, I’ll post it for everyone’s benefit.
    Please keep you experiences coming if you have them.
    Thanks for you helpful advice.

  • #277017

    sven van ‘t Veer
    Participant

    Yes, you can do it yourself, via carn√ɬ™ leão by just declaring and paying every month.

  • #277279

    kvstark
    Member

    Apologies, as I seem to go round the same issue..but I have already contacted two separate Estate Agencies and both said that a procurador must be appointed.
    If @sven is right saying that I can do this myself, is there anyone here familiar on how the process works?. It seems complicated that I’ll be able to deal with these matters without a brasilian bank account..
    (signed) by a confused Gringo.
    Once again thank you for sharing your experiences.

  • #277283

    @clubfaximatic, it is very hard to get direct and straight answers here. all the old timers want you to pay the sacrifice they have endured of time and money so they want you to suffer like they did. sven will tell you just enough to confuse you and he does this so you will hire him and pay the typical exorbitant avogado fees. The simple but effective answer is keep looking around for a property manager that handles all the affairs for you, they are out there. pm me if you want-be glad to help you.

  • #277288

    Anonymous

    The procurador doesn’t necessarily need to be a lawyer. A family member or the real estate agent himself will do just fine. Be sure to issue only a limited power-of-attorney, of course (specific to the issue at hand.)
    It is not hard to imagine instances where such a POA is required to overcome the little things, like for instance receiving payment in the form of check (for instance, who is the person allowed to deposit or cash it) or issuing payments to third parties. If a foreign property owner has no CPF, that is the first obvious hurdle right there, but all can be overcome with a POA.
    picolino2015-08-31 07:51:01

  • #277295

    kvstark
    Member

    Cool guys, it is good to find greater agreement around the POA. I do have a CPF and I have also been throught the difficulties of being a non-resident for a few years, as @J.locker mentions.
    It just makes me feel uneasy that keeping this property will require a monthly overhead.especially is the POA is issued to someone not used to do it.
    I’m investigating further and I’ll revert back soon.

  • #277296

    Anonymous

    For what it is worth, we bought property in Brazil at a time when we lived outside Brazil so we have been through the hassles of this situation, too. It is not always easy to manage rental properties in another country. We have been through both good and bad, but the easiest way (short of leaving the real estate empty) is to simply hand over the properties to an “administradora” and let them handle everything. Fees tended to be in the 15% range, when all the extras got added in.
    We are now back in Brazil so we fired the administradora and my better half now manages these things herself. But when abroad, you are better off when you simply appoint a local agent to act on your behalf by way of a power-of-attorney.

  • #277302

    Silpy Gomden
    Member

    My wife and I also had property in Brazil while we resided in the U.S. and had it managed by a well known real estate company. It worked out very well until there several changes in the agency personnel and the property was not being managed as it should have been. We had to make a few trips from Natal to Recife to finally resolve some issues and sell the property.

  • #28532

    Oaktree
    Member

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