Brazilian Owners of Miami Real Estate Targeted by Tax Authorities
Brazil’s fiscal repatriation program, a controversial initiative started by President Michel Temer, has its eye on Miami. The program sought to inject cash into the Brazilian economy by allowing citizens to bring in and legalize money kept abroad. According to the Brazilian government, Brazilians have been buying homes and condominiums in Miami, but often without declaring them. In fact, Brazilians are the second most frequent buyers of real estate in Miami.
In 2011, when the US was still mired in a recession and the Brazilian real was almost 2:1 to the dollar, Brazilians took advantage of the favorable exchange rate. They began buying up Miami real estate, much of it in cash so as not to have to declare it to the Receita Federal (Brazilian IRS).
According to Folha de S.Paulo, a total of 4,765 Brazilians are estimated to have bought property in Miami between 2011 and 2015. Of this total, 2,100 (or 44%) have not declared these properties or have declared them at a value lower than the actual value.
Temer’s fiscal repatriation program gave Brazilian citizens until July 31 to declare money and property kept abroad. This was the second phase of repatriation, the first one taking place in 2016. This month, the tax authorities will begin sending notices to those known to have property in Miami. The second phase of the repatriation program has led to US$253 million in assets being legalized in Brazil, far below the expected US$2.1 billion. The first phase in 2016 saw a whopping US$15.8 billion repatriated.
The real estate mania has slowed nearly to a halt in recent years as the Brazilian real has soared to over 4:1 against the dollar. And today, Miami real estate agents are starting to see a different type of Brazilian looking to buy. Those who bought property in the heyday were looking to invest. Today, Brazilians are flocking to Miami to escape the political and economic turmoil that has left them with little hope for a quick turnaround. Those who are looking to buy property are now looking to stay.