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I hope you are all well and having an excellent week, welcome to CryptoGod-1’s blog on all things crypto. I recently saw an article, albeit in Portuguese, which stated that throughout 2022 a total of 13 separate homes were bought in Portugal through the use of cryptocurrencies. As this is quite the ground-breaking level of adoption many would dream for crypto, I decided to delve further into the story and share the discoveries here.
Buy Your Home In Portugal With Crypto
It emerged that in 2022 a total of 13 deeds transferred between ownership in Portugal with cryptocurrencies used to complete the transactions. Along with those transfers, a further seven sales of real estate were refused, all of which also intended to pay for the asset via cryptocurrencies.
The information was shared from the newspaper 'Expresso' by Order of Notaries, and the publication also was quick to point out that a lot of those deals were completed in the South of the country. The South of Portugal, areas such as Albufeira and Faro, are famed for attraction tourists from Europe, in particular from the United Kingdom. A lot of the homes were sold in Lisbon and Algarve, while there were also transaction in Brage. All of the homes are reported to have been sold for either Ethereum or Bitcoin.
The further seven deeds which were refused as part of a transaction were not due to the buyer wanting to purchase in crypto. Instead, they were because either the customer did not comply with the requirements surrounding money laundering, or because they did not have enough technological knowledge to consummate the transaction. In other words, even though they had the value available in crypto, it was declined because of their lack of technical knowledge, or their lack of compliance with the tax rules around them.
Since April of 2022 notaries have been allowed to accept crypto in this manner and while its is still a growing market, there is still a lack of clear and defined legislation. The very first sale of a home for cryptocurrency happened in May 2022, and the Order of Notaries (ON) has worked on a regulation that will give notaries clear instructions on how to create property deeds for the purchase and sale of houses in crypto. The president of the ON, Jorge Batista da Silva, noted how more needs to be done to create a clearer legislative framework and to entice the global market. Once people understand the clear objectives of buying and selling property through the use of crypto, it is likely to become a much more common practice in the country.
Portugal and Crypto
The nation of Portugal has often been associated as one of the most friendly in terms of crypto within the European Union. It is not considered a tax heaven, but most certainly one of the best places to conduct business in crypto. Many companies have moved to Portugal in the last couple of years to enjoy business opportunities in the country. The laws have been clearly laid out, especially in late 2022, which states:
There is no Value Added Tax (VAT) on Crypto Transactions.
Any crypto held for less than a one-year period will be subject to a 28% income tax.
Gains from crypto held for longer than this period of time (365 days) would be exempt from any tax.
Commissions charged by intermediaries are subject to a 4% tax.
No income tax must be paid by individuals who receive payments in cryptocurrency.
Companies that are registered in Portugal and deal in cryptocurrency are taxed on capital gains - between 28-35%.
Crypto trading is tax-free, provided that it is not a the primary source of income. If it is, then a tax return will need to be filed.
Basically the legal status of cryptocurrency in Portugal is that cryptocurrency should be treated in exactly the same way as any other currency in Portugal, meaning it is considered a form of legal tender even if it does not quite have that tag applied to it just yet.
Buying a Home in Portugal
If you are suddenly thinking about jumping ship and making haste towards Portugal to secure yourself a home, just make sure to clarify a couple of things first. Portugal is part of the European Union and a visa will be required if you are not from a member nation. On top of this there are set rules and standards which must be complied with. Included within these are the proof of where the funds/cryptocurrency originated from. Notaries must receive in advance a series of documents from the parties that are interested in the transaction, and this information will be sent forward to the DCIAP (Central Department of Investigation and Criminal Action) and the Financial Information Unit.
Once no objections are brought forth as part of the process, then the notaries can then proceed to carry out the property deed. In essence, if you are looking to purchase a piece of property in Portugal with cryptocurrency, you will need to be able to follow the money’s journey. This is so there is full transparency as with digital currencies there is always the potential for tax crimes and money laundering, for which the ON will be rigidly on the lookout.
Interesting times and great to see a country set out specific rules for a practice such as this. While of course there will always be more rules and regulations to tweak and fine tune, it is exciting to see steps in the right direction.
Have a great day.
CryptoGod-1.
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