Increasingly popular, transactions for the purchase and sale of real estate using cryptocurrencies in Portugal will now have a clear set of instructions and procedures.
One of the main measures to be adopted is the provision of detailed information about the origin of the resources used to acquire the digital assets.
The initiative is from the Order of Notaries (notary officers who carry out deeds), which decided, in the absence of specific national legislation, to create its own standardization.
According to the entity, the decision was taken after a significant increase in interest in real estate negotiations involving bitcoins and other digital currencies.
In recent months, Portugal has attracted the attention of the community of cryptocurrency enthusiasts thanks to reports in the international press that extolled its attractive tax conditions: the country does not levy taxes on capital gains from the appreciation of these assets.
“We must be extremely demanding with what is the fight against money laundering, which is a worldwide challenge, but, on the other hand, we must also make the rules simple and clear so that real investors can use their cryptocurrencies without problems” , says Jorge Batista da Silva, president of the Order of Notaries.
There are two main models of real estate negotiations involving crypto assets. In the first and simplest, the buyer uses the services of a broker, which converts the value of the digital asset into an official currency. At the end of the transaction, the seller receives the money in local currency in his bank account. This is how most business has been done in the country.
Doubts arise, however, when negotiations involve the exchange of crypto assets between the parties, with sellers receiving payment for transactions also in cryptocurrencies. The procedure becomes even more complex if the funds are only in investment portfolios, without custody of brokers. These operations are the main focus of the instruction set, which intends to give notary officers the tools to break down transactions in detail.
Despite the name, cryptocurrencies are not considered real currencies in Portugal. Therefore, transactions that use these digital resources as a payment method are classified as barter.
“It’s done in a more modern way, but it’s still an exchange. Therefore, a deed of exchange is made, in which the seller delivers the property in exchange for a certain number of cryptocurrencies from the buyer”, says Patrícia Viana, partner da Abreu Lawyer and specialist in real estate law.
Under the new rules, which were officially launched in April, notaries must receive in advance a series of documents from the parties interested in the business.
In addition to personal identification documents, complete records of cryptocurrencies (from the time of acquisition) and storage wallets involved in the transaction are required.
The information will be passed on, up to five days before the execution of the deed, to the country’s supervisory authorities – DCIAP (Central Department of Investigation and Criminal Action) and the Financial Information Unit.
After prior communication, if there are no objections, the notaries proceed to carry out the deed.
Businesses with values above EUR 200 thousand (approximately R$ 1 million) will have an additional stage of communication to the authorities after the completion of the operation.
Due to the high volatility in the value of cryptocurrencies, notaries will also need to report a conversion of the value of these assets into a recognized currency – such as the dollar or euro – at the time of signing the promissory purchase agreement, and also at the time of sale.
“If they want to take the risk [of establishing the value only in cryptoassets, regardless of the fluctuation in the price of the quotation], this has to be properly formalized”, says Jorge Batista da Silva.
In parallel with the launch of the guidelines, ON will launch a training and capacity building program for notary officers.
Since the beginning of the year, professionals in the sector began to receive a flood of requests for information about this type of real estate transaction. There is, however, no information on the number of deals that have already been closed in this way.
According to Silva, international press coverage of tax advantages in Portugal seems to have boosted the movement.
One of the most influential cases was the so-called Bitcoin Family: Dutch people who decided to sell everything they had and invest in cryptocurrency. After surfing the value of the asset and traveling to more than 40 countries, the family –a couple and their three daughters– decided to settle in Portugal precisely for tax reasons.
Lawyer specializing in the financial area, Diogo Pereira Duarte says that there has been a lot of demand for transactions with crypto assets, not just in the real estate sector.
“There are many foreigners coming to Portugal and wanting to carry out real estate operations, but also other projects, especially wanting to register with Banco de Portugal as a provider of services in virtual assets.”
According to the lawyer, there is still a strong community of Portuguese people involved with cryptocurrencies, also interested in transactions using these assets.
“The logic of the future of the internet is a reality in which people have several resources to make payments. whatever you want”, he explains.
In the assessment of real estate law specialist Patrícia Viana, there has also been a movement on the part of real estate companies, which have identified the potential of the business.
“I see real estate developers trying to prepare for this very near future in which customers will appear wanting to pay with crypto assets. of real estate”, he says.
In a sign of this willingness within the sector itself, the Portuguese real estate market is about to win, in May, its first cryptocurrency of its own.
Rhamos Properties, in partnership with Criptoloja (brokerage licensed by Banco de Portugal), created the digital currency RHP, which serves as a means of payment for properties promoted by the real estate company.
RHP is a stable value cryptocurrency, which is called a stablecoin. One of the main objectives, according to those responsible, is to help buyers reduce the costs of international transfers for the acquisition of properties.
“A Brazilian who wants to buy a property worth EUR 500 thousand in Portugal (about R$ 2.6 million) will normally spend at least R$ 50 thousand to transfer the money. another country”, says Lázaro Ramos, CEO of the company.
The entrepreneur highlights that, with the use of cryptocurrencies, the value of the transaction drops dramatically, simply by paying the broker’s acquisition fee.
Even with the entry into force of the new policies for carrying out transactions with crypto-assets, the president of the Order of Notaries considers that the ideal scenario is the creation of specific legislation, in addition to regulation by the authorities of the European Union.
“Even in European terms, it was important to define how we should carry out this type of transaction, which will attract people from all over the world. This turns out to be a phenomenon that is not just in Portugal.”