Cryptocurrency purchases of property gained traction in 2021, despite inconvenient taxation rules and the inability of sellers to accept crypto directly.
A 2022 Sotheby’s report found cryptocurrency millionaires and hybrid workers snapped up luxury homes in 2021. Thirty-five percent of the U.S. workforce was working away from the office at the start of 2022. Nicholas Bloom of Stanford University believes the balance will shift by the end of the year. He predicts that as much as 80% of working will be hybrid. Hybrid workers are moving to luxury properties located on the outskirts of suburbs in areas like Nashville and Austin.
A mansion in Pacific Palisades in Los Angeles was sold for $80M to a person who made their wealth through crypto. Not too long ago, a Miami penthouse was purchased for $22.5M. Furthermore, a seller in Bucharest is offering a buyer of their penthouse the option to pay in crypto, says a Romania-based Sotheby’s agent.
“The confluence of finance and tech money, plus the generational transfer of wealth, have kept the market strong, especially for condos priced from $2M to $3M,” said Carrie Goldman, a real-estate specialist at Sotheby’s International.
According to Cathy Taub, who works for a New York-based entity of Sotheby’s, sellers accepting crypto consider cryptocurrencies as digital gold, as the threat of rising inflation devalues their fiat money.
Crypto improves marketability of property
Many homeowners are accepting cryptocurrencies as payment, according to Sotheby’s. “We represent a lot of clients in these transactions as lawyers and escrow agents,” according to Max Dilendorf, who is a partner at Dilendorf Law Firm. It appears that including cryptocurrencies as an acceptable payment attracts more buyers, according to Dilendorf, and can be used as a marketing tool. Dilendorf is a specialist in architecting cryptocurrency property deals. He opines that should bitcoin hit $80K or $100K, many long-term holders could see it as the right time to liquidate their investments and purchase tangible assets. Standard Chartered research forecasts that bitcoin could reach $100K by early 2022.
Seller required to complete KYC/AML
There are capital-gains taxes to consider when making these purchases, as U.S. tax rules regards them as an exchange of property, similar to barter. So taxation is not straightforward and could make the deal unattractive. The seller becomes a small bank when they accept a crypto offer. Accordingly, the seller must complete a Know-Your-Customer and anti-money laundering verification. Most sellers do not have the ability to accept bitcoin, so bitcoin has to be converted to cash to speed up the process.
What do you think about this subject? Write to us and tell us!
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
