Buying a house for a handful of bitcoins

Cryptocurrencies enter the housing market Santi Burgos

For almost 3.5 bitcoins, an apartment is sold in L'Hospitalet de Llobregat (Barcelona) of 57 meters built, whose value in euros is 105,000 (at mid-afternoon on Friday one bitcoin was equivalent to 30,332 euros).

For 31 bitcoins, a villa is sold in Playa Paraíso, in Tenerife South, which costs 950,000 euros.

Its owners accept payment in digital currencies: most in bitcoin, the most popular, and some in ether.

Ads like these can be found on real estate portals and in a few agencies, although at the moment it is a fairly marginal market.

It is because they are high-risk operations due to the tremendous volatility of cryptocurrencies.

In fact, there is some real estate agency like Tomás Casas that this week has decided to stop admitting them as a means of payment after bitcoin collapsed on Sunday by almost 50% from its peak of the year.

More information

• Villa for sale for 40 bitcoins or two million euros

"We know that very few real estate ads and agencies are accepting cryptocurrencies," says Luis Fernando Cantón, Brand Director at Kasaz, a real estate portal in which only 0.03% of properties for sale accept bitcoins. Of course, "a couple of years ago, they were zero," he recalls. In the Fotocasa portal there are 32 homes that accept payment with bitcoins. "In a year the supply has doubled," they say. In Idealista there are 53 ads. Gino Campa, real estate consultant for the Re / Max Golden Mile agency, sells three homes in Tenerife that allow payment with digital currency and whose prices in euros range from 990,000 to 1.4 million euros. "The day will come when everything will be digital and cash will disappear completely," he considers.

For now, there appears to be more demand than supply. "We noticed a great interest from Latin Americans who are very interested in this type of transaction, but have not yet found the investment real estate product they are looking for," says Rebeca Pérez, founder and CEO of

proptech

Inviertis. Sell ​​five properties in L'Hospitalet, Huesca and Castellón. None exceed 200,000 euros.

Whoever tries to sell is a private investor who has, or should have, tolerance for risk, who "knows how cryptocurrencies work and who is a prescriber of the socioeconomic change that this entails," says Pérez. "You have one or two properties and you want to ditch your real estate assets to manage your cryptocurrency investments," he adds. Offering the house in bitcoin or another digital currency allows you to expand your sales possibilities. And make noise: "The property will not go unnoticed in the market, even out of curiosity," says Cantón.

Whoever considers buying seeks to do the reverse path: to make their investment in cryptocurrencies tangible.

"There are people who bought two bitcoins for 2,000 euros a few years ago and today they can buy a home," says Pérez.

"They are investors who are looking to turn their bitcoins into a safer and less fluctuating investment," adds Cantón.

And, for this, the brick can become the almost perfect market.

More information

• The first apartment in Spain that only accepts payment with bitcoins goes on sale in Tarragona

In Spain there have been very few operations.

Three years ago an investor, who bought bitcoins with the money from an inheritance, bought a flat in Tarragona for 40 bitcoins, which was equivalent to 550,000 euros.

Last February, Inviertis put a house for sale with payment in bitcoins in the Ciutat Vella district, in Barcelona.

It was finally sold in euros.

Keep in mind that there is no obligation to accept a cryptocurrency as a form of payment, since it is not legal tender.

They are also not backed by a central bank and are not covered by protection mechanisms, such as the Deposit Guarantee Fund or the Investor Guarantee Fund.

Volatility

Managing cryptocurrencies is not child's play. Last February, the Bank of Spain and the CNMV warned in a joint statement about the risk they pose due to their extreme volatility, complexity and lack of transparency. "These are complex instruments, which may not be suitable for small savers, and whose price involves a high speculative component that can even lead to the total loss of the investment."

When buying or selling a home, the greatest risk lies in the extreme volatility of bitcoin and the lack of a common regulatory framework. Each real estate agency that works in this market has its own way of proceeding. The Inviertis platform, which has not yet closed any operation, considers it important that “the closing price is agreed in the earnest money, which can even serve as a private purchase and sale contract. At that time the currency is transitioned until the day it is made public at the notary, ”says Rebeca Pérez. "If the bitcoin fluctuates later, it will not be taken into account when writing." If this is not done, the logical thing is that, from the day of the agreement until the closing of the contract, the cryptocurrency has depreciated or appreciated. Although buyer and seller can set their own conditions.

The payment of the house is made with digital currency, but the operation must be registered in euros. “In the deed, the notary states that the sum has been received in cryptocurrencies and its value in euros. You can accept the payment in any way, but the value has to be declared in euros, as it is the base that is set for taxes or notary fees ”, he adds.

It is recommended that seller and buyer have a digital wallet to transfer virtual currencies through an

exchange

(

exchange

platform). Of course, the buyer must account for the origin of these crypto assets, since they are under the scrutiny of the Treasury. "We strongly emphasize that they can carry out the transaction, but that they act under their responsibility in terms of money laundering," says Gino Campa. Although Eduardo Valpuesta, professor of Commercial Law at the University of Navarra, believes that "no one is considering laundering by buying a home with bitcoins because there is nothing more controlled."

Now, the notary Enrique Monotliú informs that this operation is, in reality, an exchange and not a sale, since it is done with a currency that is not legal tender. "In swaps the contracting parties also give a value in euros to the objects that are exchanged for tax purposes, and for that reason it is still a swap". For this reason, he says, “I observe a high tax risk that the operation is taxed twice instead of once. And the same would happen if instead of bitcoins we used quoted shares, wheat grains or gold bars as a means of payment. Legally the operation is impeccable, but fiscally it is more expensive than a normal sale with euros ”. The notary notes that these operations are still rare, although "they are increasingly attracting more interest."

Instead, to be considered a sale, the buyer would have to convert their cryptocurrencies to euros - it is not subject to VAT - and pay the seller.

The process would be like that of a lifetime.

The digital currency has reached

real estate

crowdfunding

.

The investment firm RentalT has closed six purchases of apartments - some to rent with returns above 10% and others to reform and sell with capital gains of 15%, they say - with ether and BNB in ​​Valencia, Gandía and Seville.

Investors can bet from 100 euros.

"They pay us in cryptocurrencies and we pay the owner in whatever he decides, in euros or in digital currency," says Eric Sánchez, co-founder.