Brazilian Investment In South Florida Real Estate Is At An All-Time High

Miami has always attracted foreign visitors with its subtropical climate and diverse culture.  In recent years, foreigners have been drawn to South Florida by its investment opportunities – especially real estate.  As its economy continues to grow foreign investors are finding South Florida increasingly attractive for investing.  Foreign investors are making big moves, fast.  Fifty-eight percent of sales by foreign investors are all cash, which is 11% higher than transactions by non-foreign buyers.  Approximately 5% of foreign buyers purchase property sight unseen.

Recently, Brazilians have been moving to and investing in South Florida.  In 2017, there was a 165% increase in Brazilians leaving the country permanently under what is called a “definitive exit.”  The majority of those leaving are headed to Florida.  This is evident in the recent uptick in Brazilian investment in real estate.  For the first time, Brazilians are the top foreign buyers of South Florida real estate. 

Florida sees more foreign real estate investment than any other state in the country, with South Florida accounting for more than 9% of the total number of United States international home sales.  In 2018, there was more than a 20% increase in foreign investment in South Florida.  Foreign buyers spent nearly $9 billion on residential properties in the South Florida tri-county area, which made up 54% of the total foreign investments in Florida real estate.  That is an increase of 22.5% over 2017.  Brazil represented 12% of the total sales in 2018.  Colombia and Venezuela followed close behind with 11% each, with Argentina and Canada accounting for 8% each.  Mexico, France and Italy tied with 4% each, while the UK, China, Peru, and Ecuador each made up 3% of total foreign real estate investments.

The increase in Brazilian investment can be attributed to a number of factors, though is due largely to political and economic changes.  In 2015, gross overspending by the government sent Brazil into a recession.  Last year, Brazil elected Jair Bolsonaro on promises of government reform that would raise the country out of recession.  The changing political and social climate was enough to stimulate Brazilians to invest quickly and heavily in Florida real estate. 

As Brazilian investment increases, opportunities will abound, but so will the potential pitfalls.  Navigating the vast South Florida real estate market, along with its many dark corners, can be challenging.  It is important to consult with real estate and tax professionals in order to properly structure real estate investments to meet one’s unique goals.  Barbosa Legal has a team of attorneys and advisors that can assist in all phases of investment and estate planning.   

TaxMaria Moller