Real estate is entering a new age, where buildings are being bought with Bitcoin as well as fiat currency.
Go Homes, a property development company based in Essex, UK sold two luxury homes using Bitcoin at the end of 2017.
The company have said that they will roll out Bitcoin payments on any of their 250 homes due to be completed this year.
Due diligence was required to confirm the source of the currency, and both vendor and buyer were involved in meetings with legal representatives in the run up to the sale.
Despite working out the best way of processing crypto payments, Ed Casson, group sales director for Go Homes has said Bitcoin will be commonplace in the buying and selling of homes in the next five years.
“We are investing money next year into smart contracts on blockchain technology to speed the home buying and selling process up,”confirms Casson.
So why is buying property with Bitcoin a good idea?
Speaking to the LA Times, Neerah Agrawal, director of communications at cryptocurrency-focused think tank Coin Center, explains that Bitcoin has huge benefits in property buying in terms of speed and ease.
“Within the context of real estate, it makes sense to use cryptocurrency in those types of transactions. Cryptocurrency is a way to send large amounts of money pretty easily with relatively low fees and little interference from middlemen.”
And what of the fluctuating price of crypto? In December, Bitcoin reached over £14,000. In February, it had fallen to just over £5,000.
Andrew Canter is a chief executive of real estate brokerage and investment firm Canter Cos, based in San Diego. He is selling his house and accepting Bitcoin offers. But Canter is realistic on the state of the market.
“It’s a personal preference when it comes down to it,” Canter said. “I don’t think we can speak to a financial benefit here or there. Obviously, the chance [bitcoin’s value] goes up is just as much as it goes down right now.”
If payment is done via Bitcoin, Canter plans on managing the potential risk by using an investment bank to write a futures contract, which will freeze the value of the Bitcoin at the point of sale for a number of months.
And don’t expend any swerves when it comes to tax matters. Bitcoin holds no advantages for anyone looking to get one over on the taxman, according to Vincenzo Villamena, an expert in digital currency talking to the LA Times.
“If the seller then resells the bitcoin, he or she may have to pay capital gains taxes so it cuts into money earned on the sale. Anyone involved in the transaction looking for secrecy would have trouble because home sales are rigorously documented.”