In the run-up to the World Cup and Olympics, Brazil is encouraging foreign investors with tax breaks to help grow the country’s real estate market.
The government has now binned a 6% financial charge on purchase of real estate investment trust (REIT) shares for foreign investors.
The move is a bid to widen the choice of property development funding alternatives for Brazilian builders which are mainly dependent on the state bank BNDES.
Property development investment doubled last year to £5.5 billion in Brazil and new funding streams will help make it more attractive as an emerging economy.
A spokesman for Brazil’s finance ministry said: “Our aim is to help stimulate investors putting their money in to property in the long term.”
He added that the tax break should not have any effect on the nation’s economy.
The decision makes REIT more attractive for foreign investors since, on average, the yields are between 7% and 8%, compared with the 4% or less yield for a 10 year local government index-linked bond.
REITs are increasingly popular as investments, and Brazil sold around £4.5 billion of them last year.
The money is being to help boost the country’s