The real estate market in Brazil has been strong for the last four years, but this year has been different. The economic meltdown that the country is experiencing is putting pressure on Brazil’s middle-class and the real estate market is suffering because of it. But the interesting fact about Brazilian reals estate is 1 percent of the population owns and controls more than half of the land in the country. Brazil is considered one of the most unequal places in the world when it comes to land distribution. Some Brazilians must still pay a tax to wealthy families in certain parts of Rio because families like the Orleans-Braganza family, which happens to be the name of the old Brazilian royal family, still get a royalty on certain parcels.
That real estate tax system is called enfiteuse, in Brazil, and many of the prominent real estate companies in Brazil don’t like it. Companies like Cabral Garcia Empreendimentos try to stay away from property that was once owned by the royal family or any other extremely wealthy Brazilian family that is due a tax based on the enfiteuse law. Cabral Garcia Empreendimentos manages an assortment of properties in Brazil, and they have been successful in not paying unnecessary taxes because of that antiquated real estate law.
Cabral Garcia Empreendimentos list of properties is impressive, and the company continues to add new residential and commercial properties to their stable of properties even though the commercial real estate market has been suffering this year. The Residential market is not much better because Brazilians are having a difficult time getting loans. Interest rates are out of control, and banks are only lending money if there is ample collateral. Cabral Garcia Empreendimentos doesn’t have that problem, so the company continues to expand in spite of the economic and political issues in the country.
Some scholars say the enfiteuse system started in Rome centuries ago and was introduced to Brazil during the colonization of the country in the 1500s. At that time, all land was considered the property of the royal family and that system has remained intact ever since then. Cabral Garcia Empreendimentos stays away from properties in districts like Copacabana and the city of Petropolis for that reason, but have still continued to develop in the West Zone. Petropolis was the summer home of the royal family and everyone that owns real estate there must still pay a tax to the descendants of the former Brazilian rulers.