In France, it is theoretically possible to buy or sell real estate in bitcoin (BTC). In theory, because even if seller and buyer agree, it looks more like an obstacle course. Let’s take a look around the owner.
Buying/selling bitcoins is complicated because it is not legal tender
After having consulted various sites on the purchase of a property in France, we were a little on our hunger. Is it possible or not after all? We therefore consulted two notaries in order to have explanations: it turns out that buying in bitcoins remains complicated in France and above all you need euros. Yes Fiats: to pay taxes, transfer costs and flat tax ! So let’s go to check the different points that pose a problem.
Tracfin, escrow and transfer duties
has. First problem: the trusted third party and the immobilization allowance
As bitcoin is not a legal currency in France, there is no question of the notary keeping your cryptos in escrow (He cannot legally be the trusted third party called escrow. The trusted third party allows the funds to be blocked until the conditions of sale are met, to the satisfaction of both parties participating in the transaction).
The immobilization indemnity must therefore be paid in euros at the time of the promise of sale as well as the registration fees.
b. Second problem:
The notary engages his responsibility as to the origin of the funds. In the slightest doubt, he must contact Tracfin who must ensure that there has been no money laundering. The notary must check that the cryptos do not have a dubious origin: it is not won that he has the required skills (or even the time). This verification procedure can take a very long time or even be impossible (if you mined bitcoins in 2010 for example and you cannot prove it).
vs. Third problem: the sale price of the property
Between the preliminary contract and the signature, several months pass. Bitcoin, and other cryptos for that matter, can experience significant fluctuations during this time. What should be the final price of the good if the price of BTC falls or, on the contrary, soars? How to write the preliminary contract?
It is necessary to be able to make a fair estimate to avoid a tax adjustment: or if the estimate is correct in euros, but the bitcoin falls or soars, a renegotiation seems inevitable, if only to calculate the famous flat tax.
d. Fourth problem: the calculation of the Flat Tax
Since taxation is an evolving field, it could be specified that, for the momentthe flat tax is 30% on capital gains. If cryptos/cryptos exchanges are not generating taxes, they are when there is purchase of a property.
Example: you want to buy a house in Paris in the old for the sum of 200,000 euros (and then, the dream is important in life!). Your notary fees will be €15,613 including €11,813 in taxes. So a purchase of €215,613or during now, 9.21 btc. (1BTC = €23,402). This is called a deed-in-hand purchase.
- If you bought your BTC at 10,000 euros, the flat tax will be of 4020 €/BTC. To be good, sell 12 BTC. After the flat tax (48,240 euros) and the purchase of the house (215,613 euros), you will have 16,971 euros left to buy furniture.
- If you bought them for 1000 euros, the flat tax will be of 6720 €/BTC (it’s starting to hurt a bit, but still have 70% HP). With 14 BTC, you have the house, the taxes paid and almost 18,000 euros left for the furniture. Of course you will have to call on the friends for the move.
e. Donation in payment: barter your bitcoins for the house of your dreams
The donation in payment is the act by which the creditor accepts the delivery of something other than that provided for contractually and of equivalent value. A kind of barter in fact. This is the case when a promoter buys your land from you in exchange for an apartment. Some wealthy heirs also offer to cede works of art or property to the state to pay inheritance costs. One can imagine that for bitcoins it is the same thing, if of course the seller agrees.
As we can see, if you want to buy a property in BTC, you will have to call on a specialized tax lawyer to avoid a tax adjustment. They may advise you to sell your bitcoins before the transaction to avoid any subsequent disputes with the seller. But whether you sell them or not, you will not escape the flat tax.
Otherwise for 10 BTC, there is also the house facing the sea at Mexico : at the moment there is noexit tax on cryptos. Here too you will need to call on professionals in the sector to legalize your operation.
How’s it going abroad ?
In many countries, it seems simpler. In particular in the United States or more recently in Portugal. BitPay has made it possible to process many real estate transactions: in 2014, an agency signed the sale of a property at Lake Tahoe for 2,739 BTC ($64,098,078 million today and 1.6 million at the time), bitcoin was then worth just $600.
In the cryptosphere there are sometimes disasters, hacks, bankruptcies or loss of private keys. But there are also great stories, like that of Loi Nguyen who was able to buy her house at a very young age thanks to BTC. Or this norwegian student who had bought 5000 BTC for 18 euros and who was able to acquire an apartment.
There are now many real estate agencies around the world that can help you acquire real estate in cryptos. On the other hand, it seems really very complicated in France for the moment: neither the notaries, nor the tax services, nor the legislators, nor even the citizens themselves seem to really understand the interest of cryptocurrencies. It is essential in all cases to call on a legal professional to finalize your transaction.. Do not hesitate to point out any errors in calculation or interpretation in this article.
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