Buying off-plan property as a foreigner is one of the highest-potential-return strategies in Florianópolis’s real estate market — and also the one that concentrates the most simultaneous variables for those paying in foreign currency. Currency risk, INCC adjustment, and the legal quality of the development require analysis before signing, not after. This guide details each point.
What it means to buy off-plan in Brazil
In Brazil, the sale of property before construction is complete is regulated by the Law 4.591/1964 — the Condominium Law (Lei de Incorporações Imobiliárias). It permits the developer to sell future units while work is still underway or has not yet begun, provided that the developer previously registers the Incorporation Deed (Memorial de Incorporação) at the Real Estate Registry Office (Cartório de Registro de Imóveis).
Without this registration, the sale is legally irregular and the buyer has none of the protections that the law provides.
Why the Incorporation Deed is the most important document
The Incorporation Deed must include, mandatorily:
- Title deed of the land
- Architectural project approved by the municipal government
- Technical specification with materials and finishes
- Negative certificates of the developer (taxes, labor, liens)
- 20-year history of the title chain of the land
- Negative certificate of real encumbrances on the land
Before signing any document or paying any amount, demand the registry number and the registration number of the incorporation deed at the real estate registry office. With that number, anyone can request the updated certificate directly from the office.
The dual risk for the foreign buyer off-plan
Risk 1 — INCC adjustment during construction
Monthly installments paid during construction are adjusted by the INCC (National Construction Cost Index — Índice Nacional de Custo de Construção), which reflects inflation in the construction industry. The INCC historically varies between 5% and 15% per year.
In a 36-month contract, an initial installment of R$ 3,000 can reach R$ 3,900–4,500 by the end of the build due to INCC, even though the contracted price remains the same.
Risk 2 — Exchange rate variation in remittances
The foreigner who pays in foreign currency faces an additional risk that the Brazilian buyer does not: the exchange rate can vary substantially over 2 to 3 years of construction.
Over the last 10 years, the BRL/USD rate has varied more than 30% in 2-year windows. The same contract can end up much more expensive or much cheaper in foreign currency depending on when remittances are sent.
Strategies to manage currency risk:
- Single remittance at project start: locks in the exchange rate. Advantage: total predictability. Risk: concentrating all currency exchange at a single unfavorable moment
- Staggered remittances over construction: splits the currency exchange across 4 to 6 transfers over the build, calculating a cost average. Reduces the risk of a single adverse rate, but generates more operations with IOF and bank spread
- Keep a reserve in BRL in Brazil: convert a larger portion at the start when the rate is favorable and keep the balance in a Brazilian account to pay installments without new conversion each month
Every remittance for property purchase in Brazil must be registered with the Central Bank through a currency exchange operator. Keeping all currency exchange contracts is essential — these documents prove the source of funds and facilitate remittance back to the foreign country when the property is sold.
The Segregated Patrimony: the most important protection you can demand
The Segregated Patrimony (Patrimônio de Afetação) was created by Law 10.931/2004 in direct response to the collapse of Encol S.A. in the late 1990s — when more than 42,000 buyers were left without property and without money because development resources had been diverted to cover other projects.
Segregated Patrimony determines that the land, constructions, and financial resources of the development form a separate and shielded patrimony in relation to the general patrimony of the developer. Money paid by buyers can only be used to build that specific development.
What happens if the developer defaults with Segregated Patrimony
Article 31-F of Law 4.591/64 is clear: the effects of the developer’s insolvency do not affect the segregated patrimonies that have been constituted. Buyers have the right to, in assembly, decide on:
- Continuing the work with another builder using the resources of the segregated patrimony
- Contracting the execution of the work directly
- Receiving back the amounts paid in proportion to each buyer’s contribution
How to verify if the development has Segregated Patrimony
- Updated certificate of the land’s registration at the Real Estate Registry Office: must show annotation of the “Segregation Statement” (Termo de Afetação)
- Purchase and sale contract: must expressly mention the regime of Segregated Patrimony
- Separate CNPJ: developments with segregation frequently have their own CNPJ (SPE — Special Purpose Entity)
An additional positive indicator is participation in the RET (Special Tax Regime — Regime Especial de Tributação): the developer with RET has formalized Segregated Patrimony with the Federal Revenue Authority and operates with accounts segregated by development, which implies greater control over the financial flow of the work.
What are your rights if the work delays?
The Law 13.786/2018 — known as the Rescission Law — set clear rules for delays in delivery.
180-day tolerance
Regardless of the contracted deadline, the developer has the right to a 180-day tolerance period beyond the scheduled delivery date, without any penalty. This deadline is legal and generally appears in the contract.
Example: contract scheduled for December 2027. The developer may deliver until June 2028 without incurring penalties.
Compensation for delay beyond tolerance: 1% per month
If the work delays beyond the 180-day tolerance period, the developer pays the buyer indemnification of 1% per month on the amount effectively paid until that moment, calculated pro rata, adjusted by the contractual index.
Example: buyer paid R$ 300,000. Delay of 6 months beyond tolerance. Indemnification = 1% × 6 × R$ 300,000 = R$ 18,000.
Right to rescind with full refund plus penalty
If the delay exceeds 180 days beyond the tolerance period (therefore, more than 360 days beyond the original date), the buyer may:
- Rescind the contract
- Receive back 100% of amounts paid, including brokerage if paid by the buyer
- Receive penalty equivalent to 1% per month on the amounts paid, calculated over the entire excess delay period
- The refund occurs within 60 days of the rescission request
What happens if you want to withdraw?
Law 13.786/2018 also regulated rescissions at the buyer’s initiative (rescission by the buyer).
Developer retention percentages
| Situation | Maximum Retention | Refund Deadline |
|---|---|---|
| Without Segregated Patrimony | up to 25% of amounts paid | Up to 180 days after rescission |
| With Segregated Patrimony | up to 50% of amounts paid | Up to 30 days after Certificate of Occupancy |
The logic of higher retention with Segregated Patrimony is that work resources are segregated — the developer cannot use the reserve to cover the rescission impact.
For the foreigner, the real cost of a withdrawal is higher than the nominal percentage suggests: the IOF and bank spread from the original remittance are not recoverable.
The due diligence checklist before signing
About the development
- Consult the land’s registration at the Real Estate Registry Office: verify if there is an incorporation record
- Confirm if “Segregated Patrimony” appears in the incorporation deed or in the contract
- Check the developer’s CNPJ on the Federal Revenue Authority portal: active status
- Research judicial actions against the developer in TJSC (portal e-SAJ)
- Verify if there is RET in the development
- Research the developer’s history of previous delivered projects (timeline, specifications, Reclame Aqui, PROCON-SC)
About the contract
The Summary Schedule (mandatory under Law 13.786/2018) must contain:
- Total price and payment structure
- Delivery deadline with express date
- 180-day tolerance period (required by law but should be explicit)
- Adjustment index for installments during construction (usually INCC — confirm in contract)
- Rescission terms and percentages
- Unit specification (square footage, floor location, parking spaces)
The contract will be written in Portuguese. There is no legal obligation for the developer to provide a translation. Contracting sworn translation and review by a real estate attorney is highly recommended.
About payment and currency exchange documentation
- Understand that all installments are in BRL: currency exchange is the sole risk of the buyer
- Define remittance strategy: single, staggered, or BRL reserve in Brazil
- Keep all currency exchange contracts registered with the Central Bank
- Verify currency exchange cost from the fintech or bank for recurring remittances
Proxy: indispensable for those living outside Brazil
If the buyer cannot appear in person in Brazil during construction — and in most cases cannot — a proxy is essential. The powers include:
- Monitor the progress of construction
- Sign contract amendments and additives
- Participate in assemblies during the pre-delivery phase
- Inspect and receive the keys
- Sign the final deed
- Take legal action in case of delay
Formalities of proxy for a foreigner:
- Abroad: execute the proxy before a notary in your local jurisdiction with Apostille of The Hague (Hague Convention of 1961), followed by sworn translation into Portuguese
- The powers must identify the property specifically — a proxy with general powers is not accepted for acts of property disposition, per STJ jurisprudence
A CPF (Individual Taxpayer Registry) is mandatory to sign the contract. For potential financing of the balance at delivery, most banks require proof of income in BRL — a foreigner with income only abroad faces practical obstacles. Planning for full settlement at delivery via international remittance is the safest path.
The new launches market in Florianópolis in 2025
Florianópolis recorded 1,942 units sold in Q1 2025, up 97% compared to the same period in 2024, and total sale value (VGV) of R$ 1.6 billion in the quarter (ACIF/SINDUSCON-FLN data). The average price per square meter stands at R$ 12,420, positioning the city as the 5th most expensive capital in Brazil.
Historical property appreciation for units purchased off-plan in Florianópolis was reported between 17% and 18% per year in BRL between 2019 and 2024 ⚠️ VERIFY this data from independent official source — currently available only from local real estate market sources.
For the foreign investor, final return depends on three simultaneous variables: nominal property appreciation in BRL, exchange rate variation over construction, and 15% IRRF withholding tax on capital gains when reselling. The non-resident does not have access to the R$ 440,000 exemption available to tax residents in Brazil.
Neighborhoods with highest concentration of new launches in Florianópolis in 2025: Campeche, Trindade, Ingleses, Centro, and Canasvieiras. For higher-ticket properties: Jurerê Internacional and Lagoa da Conceição.
FAQ
Can a foreigner buy off-plan property in Brazil?
Yes, without restriction. Brazilian law does not prohibit property purchase by foreigners, including off-plan. The fundamental requirement is a CPF, which can be obtained at the Brazilian Consulate in your country of residence. The purchase and sale contract is signed in Portuguese. For those living outside Brazil during construction, appointing a proxy with specific powers for the property is indispensable.
What is Segregated Patrimony and why does it matter for the foreigner?
Segregated Patrimony is a legal mechanism that separates development resources from the general patrimony of the developer. If the developer defaults, buyers of the affected development can decide in assembly to continue the work or receive back the amounts paid. It was created after the collapse of Encol S.A., which left more than 42,000 buyers without property. To verify: request the updated certificate of the land’s registration — must show annotation of the “Segregation Statement” (Termo de Afetação). Caution: the development with Segregated Patrimony has greater protection against insolvency, but the buyer’s rescission penalty is also higher (up to 50% of amounts paid, versus 25% without segregation).
How long can the developer delay delivery without penalty?
Law 13.786/2018 permits a tolerance period of 180 consecutive days beyond the date provided in the contract, without any penalty to the developer. From the 181st day of delay beyond that tolerance, the developer must pay the buyer 1% per month on the amount effectively paid until that moment. If the delay exceeds 360 days beyond the original contract date, the buyer may request rescission with full refund of everything paid plus additional penalty.
How does currency exchange affect those buying off-plan in Florianópolis?
The contract and all installments are denominated in reais. The foreigner converts their currency to BRL with each remittance over 2 to 3 years of construction. Over the last 10 years, the BRL/USD rate has varied more than 30% in 2-year windows. This means the total cost in foreign currency can be significantly different from what the initial exchange rate suggested. The most common strategy is to keep a reserve in BRL in Brazil — convert a larger portion when the rate is favorable and pay monthly installments without new conversion.
The Regente team serves foreign investors in Florianópolis — contact us.
