Cryptocurrencies have entered the real estate market. Zome was the first European agency to broker the sale of a bitcoins home, the world’s most popular digital currency, ushering in a new cycle in the real estate business. João Batista da Silva, president of Ordem dos Notarios (ON), has informed Dinheiro Vivo that three more transactions are already planned for next week. And more are expected. Investor interest in acquiring real estate with digital assets began in 2019, the pandemic subsided, but has now gained momentum. Most of the interested parties are foreigners, although the first transaction – a T3 apartment in Bragan – was carried out by two Portuguese. Contributing to this demand is that Portugal is considered a cryptocurrency paradise for investors, as so far the profits of these virtual currencies have not been taxed.
ON was instrumental in launching this business model, which could lead to legal issues and be a money laundering tool. João Batista da Silva explained that the Order created some practical guidelines to ensure the law and the security of transactions. The legal model was based on a secular figure: exchange. In practice, the seller is exchanging his goods for another of the same value, in this case digital currencies, but it could be cash, jewelry, cars … The main concern was to ensure control of the origin of the money, to prevent money laundering.
what is different
In this chapter, cryptocurrency holders are required to submit a set of documents that verify the history of this capital and where it is stored. “It is necessary to justify the transaction of the first purchase of the cryptocurrency and the growth of the portfolio, how this asset has appeared, otherwise the business may become unfeasible,” he stressed. Otherwise, the business follows the usual molds of a real estate operation.
The sale of a house in Braga, which was on the lips of the Zome world, was worth almost three bitcoins (2.9875), the equivalent of 110 thousand euros at the date of the deed. The purpose of the real estate network was to bring the transaction into the Web 3.0 era. “It’s part of our growth strategy, but we had to do a business to see how it would work in the real world,” says Carlos Santos, the agency’s chief technology officer. With the legal framework developed by ON, the advice of a law firm and the finding of a seller and investor, both fans of cryptocurrency and the technological universe, the Zome team continued the operation.
According to the manager, the deed took five minutes – all the details and validations had already been verified at the time of signing the purchase and sale contract. It was time for the parties, each in front of their own computer, to verify the transfer of the digital assets they had purchased. In order to settle in euros, the tax obligations of the IMT and the Stamp Tax are exceeded. “For the first time, the law is present in an industrial revolution,” said Nuno Viera da Silva, a lawyer for ECIJA Antas da Cunha. The process is a complete innovation because, he said, “a public deed never requires the fulfillment of digital assets.”
Carlos Santos, a digital enthusiast, believes that the introduction of cryptocurrencies into the real economy is “irreversible”. According to him, about a year ago, 17% of the world’s population was affected by the digital currency ecosystem, and “I think that level will soon reach 20%.” And that’s why Zome is so “very interested in being at the forefront” in this new era. Today, “there are a lot of people who have taken cryptocurrencies as savings resources and, despite their volatility, it is more interesting than other types of investments, such as the stock market,” he argues.
According to the ON president, “it is normal for people who are enriched by digital assets to want to realize this liquidity in their physical assets, to want to diversify their investments.” And in this chapter, real estate is a safe asset.
Associated leaders in the real estate sector have not yet given up on digital assets and are not convinced of the potential of real estate to exchange for these currencies. Paulo Caiado, President of APEMIP, is definitive: “I don’t find it comparable to investing in cryptocurrencies, the latest digital figure that has seen a sharp rise or fall in value, and the real estate sector, a benchmark in value allocation. Economic resources and strong valuation.”
And Francisco Bacelar, President of ASMIP, recalled that “in the creation of the real estate business, there is a factor of stability and valuation for both own housing and the return on investment”. “Because of the high volatility of this type of asset, it seems dangerous for anyone who receives 100 this morning to be only 80, 50 or even 10 at the end of the day,” he says.
But they acknowledge that these digital assets could lead to more investment in the country. Paulo Caiado recalled that most holders are foreigners and, in this sense, “many may be interested in exchanging their cryptocurrency in euros to buy a house in the Algarve, Porto, Lisbon.” For Francisco Bacelar, this type of transaction is “a new way to attract investment that no country can avoid.”
Por Dinheiro Vivo, economic brand of Diário de Notícias.