Buying a home is a dream of many people, but it requires a lot of planning and organization to make it happen. A great ally is the money from the FGTS (Guarantee Fund for Time of Service). Every worker hired under the CLT (Consolidation of Labor Laws) regime is entitled to the FGTS, which is equivalent to 8% of the monthly salary and is deposited by the employer in an account linked to the fund. And the accumulated money can be redeemed in some specific situations such as unfair dismissal, termination of the contract for a fixed period, termination of the contract due to total closure of the company, termination of the contract due to bilateral fault or force majeure, retirement and, finally, to obtaining own housing. But, for this, it is necessary to comply with some rules.
Below, we explain how to release the funds from the fund and use it to fulfill your dream.
How do I know if I can use the FGTS to buy property?
To use your FGTS, you need to meet some requirements:
• Have at least three years of formal contract. This period does not need to be continuous, not even within the same company.
• Not having active financing in the Housing Finance System (SFH) in any part of the country.
• Not owning a residential property in the city where you intend to buy the new one.
• Work or live in the city where the property you want to buy is located.
• On the date you ask to use the FGTS balance, your financing installments must be up to date.
How do I know my FGTS balance?
Caixa Econômica Federal sends a quarterly statement with the FGTS balance to the address linked to your account. But it is also possible to check it on the internet, on the guarantee fund website, with the NIS number (PIS/PASEP) and a registered password. Or you can go to a Caixa branch and present an identity card and NIS number.
How to use FGTS to buy a property?
For the purchase of your own home, the FGTS can be used in three moments:
- To buy or build. The balance can be used to pay off part or the entire value of the property.
- To write off or settle debts. The balance can be used to pay off all or part of the debts, once the contract is from the Housing Finance System (SFH).
- Pay part of the value of the installments. The balance can be used to reduce the value of installments by up to 80% in 12 consecutive months, if the contract is with the SFH.
The FGTS cannot be used to buy commercial property, renovate or expand the property, purchase land without construction at the same time, purchase construction material or for residential properties for family members, dependents or other people.
What properties can I buy with FGTS?
Only properties financed by the Housing Finance System (SFH) can be purchased with the FGTS. They must also fall within a periodically reset value threshold. Currently, they must be valued at up to R$950 thousand for the states of MG, SP, RJ and DF and up to R$800 thousand for the other states. And they need to be located in the urban perimeter of the city and have the buyer’s home as their purpose.
In more technical and bureaucratic matters, the property must present full housing conditions, be registered in the competent property registry office, and cannot have been the product of FGTS use for less than three years.
It is not possible to use the fund to acquire commercial property, unbuilt land or to purchase residential property for third parties.
What documentation is required to withdraw my fund?
The necessary documents are those that prove that you meet all the requirements mentioned in the first item: identity document, account statement linked to the FGTS, work card to prove working time under the FGTS regime, Income Tax declaration Physical (DIRPF) – if married, it will be necessary to present the DIRPF of both spouses.
And if you are a self-employed worker, you will also need the declaration of the managing body of the labor or union.
How do I request the withdrawal of my FGTS?
To request your FGTS, check your FGTS account balance and see how much can be used in the purchase, settlement or amortization of your debt balance or even the installments of your contract. Then, separate the necessary documentation and deliver it to the Caixa Branch or to the Caixa Aqui Correspondent closest to you. Caixa will evaluate the documentation and, if approved, its Guarantee Fund balance is invested in its own home.
Can I use the FGTS to buy a property without the intermediation of Caixa Econômica Federal?
Yes. Any bank can participate in the purchase of a property. For this to happen, the buyer interested in using the FGTS communicates its intentions to the bank. The bank will determine to include some clauses in the contract for the purchase of the house or apartment and then withdraw the money from the fund and deposit it to the seller.
How long does the FGTS take to be released?
After the order has been placed, the FGTS money takes, on average, five days to be released. However, the other processes related to the purchase of the property, such as the approval of the financing, take longer, and the deal can take, in total, up to 90 days to complete.
How do I declare the withdrawal of FGTS in Income Tax?
Both your property and the FGTS withdrawal must be declared in the IR (see how to declare your financed property in the income tax). You must declare the purchase and the total value of the property under “Properties and Rights”, whereas the FGTS withdrawal amount has to be specified under “Exempt and Non-Taxable Income”.
Let’s summarize this step by step?
If you have at least three years of formal employment and intend to buy your first home, you can use your FGTS for that.
The chosen property must be evaluated within the defined limit (up to R$950 thousand for the states of MG, SP, RJ and DF and up to R$800 thousand for the other states).
From there, you check your balance and see how much can be used in this trade. Then, you must go to a cashier with all the necessary documentation and request the withdrawal. Caixa Federal will analyze your application and your profile and, if your case is approved, you can start investing in your own home.