Brazil’s STF confirms the constitutionality of restrictions on the acquisition and lease of rural properties by foreign individuals

On April 23, 2026, Brazil’s Federal Supreme Court (“STF”) ruled on Claim of Non-Compliance with a Fundamental Precept (Arguição de Descumprimento de Preceito Fundamental – “ADPF”) No. 342 and Original Public-Interest Civil Action (Ação Cível Originária – “ACO”) No. 2,463, thereby confirming the constitutionality of restrictions on the acquisition and lease of rural properties by foreign individuals and Brazilian companies controlled by foreign capital, pursuant to Law No. 5,709/1971.

ADPF 342, filed by Sociedade Rural Brasileira, challenged whether Law No. 5,709/1971 was fully incorporated into the Brazilian Constitution of 1988. ACO 2,463, in turn, was brought by the Federal Government and the National Institute for Colonization and Agrarian Reform (Incra) and sought to ensure that these restrictions would also be enforced within the context of real estate registries.

Ultimately, the STF recognized the full force and constitutionality of Law No. 5,709/1971, affirming its incorporation into the Brazilian Constitution and validating the interpretation established in CGU/AGU Legal Opinion No. 01/2008-RVJ, dated September 3, 2008, published on August 23, 2010 (“AGU Opinion 2010”).

As a result, the STF consolidated the current restrictive legal framework applicable to the acquisition and lease of rural properties by foreign legal entities or their Brazilian equivalents (i.e., entities treated as foreign for bylaws purposes).

Key takeaways from the ruling:

• ADPF No. 342

The STF unanimously dismissed the claim, in line with the opinion delivered by Justice Marco Aurélio (Rapporteur). The judgment will be drafted by Justice Gilmar Mendes pursuant to Article 38, IV, “b”, of the STF’s Internal Rules. Justice André Mendonça, as the successor to the Rapporteur, did not take part in the trial, and Justice Cármen Lúcia justified her absence. The session was presided over by Justice Edson Fachin.

• ACO No. 2,463

The STF unanimously granted the claim to declare Opinion No. 461/12-E null and void due to illegality, in light of the constitutional incorporation of Article 1, paragraph 1, of Law No. 5,709/1971. The São Paulo State General Board of the Courts had issued the opinion. The decision reaffirms the authority of the Federal Government and Incra to authorize the acquisition of rural properties by foreign legal entities or their Brazilian equivalents.

Practical impacts
The rulings put an end to the legal uncertainty that had been surrounding the matter, as the STF definitively confirmed the constitutionality of the restrictive framework and preserved the role of the Federal Government and Incra in overseeing the acquisition and lease of rural properties by foreigners, keeping in force the model currently applied at both the administrative and registry levels.

We are awaiting publication of the full decision and any further developments, including to assess whether it may be appropriate to file motions for clarification, particularly to urge Incra to perform its duties within a reasonable timeframe – a point that Justice Cristiano Zanin emphasized and that may have practical implications on the implementation of the ruling.

Demarest’s Real Estate and Agribusiness teams remain available to address questions and assess deal-specific impacts on ongoing or planned transactions.