coins updatescrypto coinsCrypto Newscryptocurrency

Buy property in Spain with cryptocurrency

Buy property in Spain with cryptocurrency

It’s amazing how the world is changing, including the world of currency. Even 10 years ago, few people knew what a cryptocurrency was, and even more so sought to become its owner. 2020, which the whole world will remember in connection with the onset of the pandemic, was the year of the cryptocurrency boom. The cryptocurrency market is growing and flourishing, attracting the attention of the general public and financial markets. Investments in cryptocurrencies have turned from “niche” into quite affordable for everyone.

Body Tag: 980x250 billboard responsive | with lazy-loading | repeatable

Bitcoin (a type of digital cryptocurrency) has peaked in 2021 despite the global health crisis and the resulting economic uncertainty. In this regard, many have thought about expanding investments in bitcoins and even buying real estate for cryptocurrency. Financial analysts believe that cryptocurrencies such as bitcoin will play an important role in the real estate market in the near future due to the possibilities they provide for making payments, as well as their additional security and certification.

Is it possible to buy property in Spain with cryptocurrency?
“I have cryptocurrency. Can I buy a property in Spain using it?” – we get such questions more and more often. Therefore, today we decided to tell you how things are. Yes, in Spain you can buy real estate for cryptocurrency, although not all real estate market participants are open to such transactions. The reason for their wariness is the unstable exchange rate of the cryptocurrency and the still weak legal framework governing transactions using this currency.

Body Tag: Rectangle top (above the fold) responsive | without lazy-loading | single use

After the increasing popularity of crypto-currency all over the world and in Spain, no changes have yet been made to the Spanish legislation, which could become a basic support for market participants during transactions with crypto-currency. However, the Government of Spain in 2020 has repeatedly spoken about the need to phase out cash payments in order to combat tax evasion and fraud. Experts emphasize that this can accelerate the transition to the digitization of transactions.

In Spain, real estate portals such as Fotocasa and Idealista currently list homes and apartments for sale that accept bitcoin or other cryptocurrencies as a payment method.

Steps to Buy Property in Spain with Cryptocurrency
As we mentioned earlier, the main disadvantage of cryptocurrency is the volatility of its exchange rate. Therefore, in order to complete the sale and purchase, it is important that both parties not only agree to use cryptocurrency as a payment method, but also establish a fiat currency to assess the value of the property and a specific day of the sale and purchase act to specify the exchange rate between bitcoin and the euro.

After the basic conditions for the sale of housing are established, the formalization of the sale and purchase follows by drawing up a notary deed, setting the price in euros agreed upon during the sale and purchase, and using bitcoins as a payment method. Unlike a classic sale and purchase, the difference is that instead of transferring money, the transaction will be carried out by transferring bitcoins.

Currently, various Spanish real estate companies are developing the so-called “tokenization” of real estate in order to facilitate its acquisition with cryptocurrencies. Instead of registering ownership on paper, it becomes possible to carry out transactions digitally using tokens.

How is real estate paid for with cryptocurrencies taxed?
At the tax level, we must first of all pay attention to two taxes: the Value Added Tax (Impuesto sobre el valor anadido or IVA) and the Property Transfer and Documentation Tax (Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados or ITPAJD). In both cases, the payment process (using EUR or cryptocurrencies) does not affect the tax base or applicable tax, since both taxes are calculated based on the assessed value of the property, whether it is a new home or a second home. And the value of real estate, as we mentioned earlier, is in any case determined in the so-called fiat currency.

Another tax aspect to consider is how cryptocurrencies, as a payment method during the acquisition of real estate, affect the assets of both parties. Under current tax laws, owned cryptocurrencies will continue to be taxed annually according to their value as profit or loss, which must be included in an income tax return.

Money Laundering Prevention: Cryptocurrencies and Real Estate Sales
The Spanish law Ley 10/2010 on the prevention of money laundering and terrorist financing also affects the process of buying and selling a home. In the near future, as the new European Directive AML6 and the Bill on Measures to Prevent and Combat Tax Fraud are promoted, special attention will also be paid to operations for the acquisition, transfer, exchange of cryptocurrencies and payments using them. In addition, in the Spanish market, all processes of buying and selling housing are accompanied by a procedure for verifying and justifying the origin of funds that will be used to purchase real estate. Thus, according to the above law, the buyer needs to guarantee the origin and legitimacy of the cryptocurrency used for the purchase.

If you are considering the possibility of purchasing real estate in Spain for cryptocurrency, the experts of the Center for Business and Life Services in Spain “Spain in Russian” are ready to provide informational assistance, help you with the individual selection of objects for purchase for cryptocurrencies, the preparation of the necessary documentation and the conclusion of a sale and purchase transaction .

Related Articles

Back to top button