The speed of the transaction is one of the advantages of selling with cryptos but one can also mention the security of the transaction and the savings on the expenses of intermediaries (banks, advisors, notaries).
It is however more controversial than it seems, and in France this phenomenon is not very popular for the following reasons:
1. The volatility of crypto-currencies: investing in crypto-currencies requires significant resources as the market is relatively volatile: in 2011 bitcoin (one of the virtual currencies) started at $1 and its value approached $67,000 in November 2021 before dropping to $19,360 in early 2022.
2. Some banks are refusing credit to investors who bought their property in bitcoin because the risk of money laundering is high.
3. The value of the property: how to fix it? This is always related to the volatility of the crypto-currency as it will have to be determined whether the price in crypto will be at the rate of the day of the purchase agreement or the day of signing. For this, the contract must take into account this volatility of the crypto, while it is precisely these "intermediaries" (notaries, banks, advisors) that we wanted/thought to avoid that will have to help which is not realistic.
2. Some banks are refusing credit to investors who bought their property in bitcoin because the risk of money laundering is high.
3. The value of the property: how to fix it? This is always related to the volatility of the crypto-currency as it will have to be determined whether the price in crypto will be at the rate of the day of the purchase agreement or the day of signing. For this, the contract must take into account this volatility of the crypto, while it is precisely these "intermediaries" (notaries, banks, advisors) that we wanted/thought to avoid that will have to help which is not realistic.
These risks are linked to the lack of a legal framework. In 2019, the Pact law provided a first legal framework for crypto-currencies and gave them a legal status of digital assets. A digital asset is not a currency in the legal sense, but an accepted medium of exchange for certain transactions. Crypto-currencies are also subject to certain taxes.
In France, the tax authorities have reminded us that capital gains from bitcoin must be declared and taxed. Gains generated via this crypto-currency are not counted as income from movable assets, unlike, for example, capital gains on shares. However, these gains are subject to CSG (17.2%) and income tax (the rate of which can be as high as 45%). There are two scenarios for this income tax:
1. if your activity is "occasional", the holder of bitcoins is subject to the non-commercial profits tax regime (BNC).
2. if it is "usual", it is subject to the industrial and commercial profits regime (BIC).
Today, several companies in the real estate sector are embracing crypto-currencies, in particular to attract a new and wealthy clientele. This type of customer - often international - is looking for simplicity in the transaction by avoiding the bureaucracy of existing cumbersome, costly and lengthy procedures.2. if it is "usual", it is subject to the industrial and commercial profits regime (BIC).
For more information, please contact consulting@rosemont.mc