Bitcoin impacts multiple fields worldwide; even Elon Musk confirmed that you can now buy a Tesla with Bitcoin. It simplifies the purchase process by avoiding the bank transfer procedures (especially in international deals), connecting buyer and seller in real-time, and speeding up the process, even if you’re buying from another world.
Now that cryptocurrencies are becoming more common (with ongoing value growth), the ability to buy real estate with bitcoin has now become a possibility.
- 1 What Is Bitcoin?
- 2 In Which Countries Can You Use Bitcoin?
- 3 Bitcoin Advantages When Buying Property
- 4 Finally, How Hard Is It To Buy Real Estate With Bitcoin?
- 5 What To Expect?
What Is Bitcoin?
Bitcoin (₿, BTC) is a digital, global currency with no cards, cash, or bank transfers. The mathematical field of cryptography is the basis for its security.
Each Bitcoin is a file that can be stored in your ‘digital wallet’ app or your laptop. People can transfer it to your digital wallet (with the current price, even parts of a Bitcoin are pretty valuable), and you can send it to others. Each transaction is recorded in a shared public ledger that supports the network, called the blockchain.
In general, you don’t need any technical skills to use Bitcoin. To start using it, you must set up a wallet on your mobile phone or computer. An ID will be assigned to you, which is used as an account to send or receive money. When you send or receive the currency, your Bitcoin wallet keeps a private key that verifies that you own the wallet (similar to digital signatures, they both use crypto technology).
In Which Countries Can You Use Bitcoin?
On Oct. 22, 2015, the European Court of Justice (ECJ) ruled that buying and selling digital currencies is considered a supply of services and that this is exempt from value-added tax (VAT) in all European Union (EU) member states. Additionally, some individual EU countries are further developing their Bitcoin stances.
We can name a few countries that allow using Bitcoin and regulate it, like the United States, Canada, Australia, France, and Finland, and the list is growing!
Swiss crypto laws are pretty positive as well but still regulated. According to the Switzerland regulator, FINMA, you’re allowed to transfer the assets to other wallets whose owners are identified and verified. Exchanges must carry out enhanced due diligence concerning anti-money laundering and combatting the financing of terrorism.
Portugal is also considered a user-friendly Bitcoin country. The government is confirming that Bitcoin is like any other currency you can use for transactions. Portugal is already recognized as a technology-driven country and IT hub for people from all over the world. Using Bitcoin in Portugal is tax-free for individuals; however, it’s subject to capital gain tax for companies selling it (between 28% and 35%). Learn more at bitprime-gold.co.
Bitcoin Advantages When Buying Property
Bitcoin just entered real estate markets, and not every real estate agent is ready. It may be time to start to think about it and learn about the benefit of using it in your real estate transactions. We’ll show you the way. So, what are the advantages?
1. Creates A New Transaction Platform To Transfer Money
The blockchain enables transactions with online marketplaces or trading platforms by acting as a process that permits asset trading. Sweden’s land registry authority has been testing ways to record property transactions using this technology, which could save over €100 million each year by eliminating paperwork and resulting in speedy transactions. There is no need for additional fees or intermediaries involved in fiat currency real estate deals, so BTC transactions are quite streamlined by comparison. BTC can accommodate purchases of properties at any price.
2. Prevents Fraud
Bitcoin’s private, fully certifiable digital identification allows you to transfer and receive money from deal participants safely. This shows reliable proof of funds, even more so than a bank letter. You can use this digital ID for your property transaction, future mortgage payments, escrow, or other financial scenarios.
3. Encourages Investment
Bitcoin is an investment itself; many people have already benefited from it. Rather than saving cash or bank funds for property purchases, investors can buy and sell parts of their real estate tokens instead. In this way, real estate looks more like a stock market.
4. Improves Transparency
Buyers and sellers store their information securely, but cryptocurrency is instantly verifiable without additional services and processes. Transaction details are visible to all parties. This saves you money without making you hire attorneys, lawyers, etc., for the same services as traditional transactions. Of course, you might need professional services for the deed and papers, but fewer professional service hours will be spent.
As long as due diligence is performed, there is no reason that real estate bitcoin payment cannot offer a smooth, rapid and convenient option to buyers and sellers. If you consider purchasing real estate with bitcoin, you will be among the early adopters of cryptocurrency.
Finally, How Hard Is It To Buy Real Estate With Bitcoin?
In the United States, the IRS has classified bitcoin as a form of real property. So, uniquely, real estate bitcoin transactions accommodate a separate layer of capital investment (in addition to the fundamental, physical properties that are being bought and sold.)
Because BTC’s value in fiat currency does fluctuate (we could observe it early this year), real estate transactions in BTC rely upon mutual agreements between buyer and seller on fiat currency sales prices. There is a particular risk for a buyer when the Bitcoin rate is falling as it might take some time between signing the agreement and the date you transfer the funds, but it can work in the other direction.
Regarding down payments, sellers would like to see that the contract is secured, and most buyers are converting their cryptocurrency and putting down payments in dollars. Sellers have mortgages (and other banking) conducted with fiat currency.”
What To Expect?
Bitcoin has, so far, been the most popular cryptocurrency. The trend is expected to continue to grow as the price of bitcoin increases and the ability to either purchase directly with bitcoin or exchange the currency becomes standard practice. Many investors see the platform as an opportunity to turn their bitcoin investment into a tangible asset in real property.