7 questions about buying real estate in Germany for cryptocurrency
The Germans went to the legalization of cryptocurrency, since this is a global trend. Digital money is legalized in England, Switzerland, Estonia and the emirate of Dubai (UAE), as well as in the US states of New York, California and Florida. For bitcoin and other altcoins in Germany, you can buy not only virtual services like access to a game portal or a subscription to an online movie theater, but also something more serious. For example, real estate.
1. Do I have to pay taxes on purchases for a crypt in Germany?
Yes. Cryptocurrency is equated to common (i.e., fiat) currencies in terms of taxation. When buying a product or service, you must pay value added tax. At the same time, in Germany, Bitcoin and other digital money do not have to pay a tax on capital outflows (unlike the United States, for example, where a crypt is considered property).
2. And what, I can really buy a real house for the “unreal” money?
Yes you can. It’s hard for us to imagine, since digital money is not something that can, roughly speaking, be “touched”. Meanwhile, the money that is on our cards and accounts, we often no longer cash out, and buy goods and services, simply putting the card to the reader. In this sense, Bitcoin or other well-known Altcoins do not differ in any way.
We can give another example from human history: initially there was only barter in society. Over time, an alternative was required, since it is simply inconvenient to carry with you everything that you have on the farm. So gold appeared. Later, people realized that gold and silver money was also uncomfortable to carry around with them all the time. Humanity has switched to various paper currencies, bonds and other funds. Now philosophically, a similar shift is gradually taking place: we are replacing paper money with electronic bills and now with an international digital currency.
3. How does a real estate transaction occur when paying with a cryptocurrency?
In essence, just like a regular deal. Digital money is transferred to the seller’s account through the smart contract system, which is valid in the EU. The transaction is registered with the notary, the record of the change of ownership is made in the unified register of real estate in Germany. Which, by the way, is completely closed: the data from it can be obtained only by a notary and only upon reasonable request. In this sense, Germany is considered one of the most reliable alternate aerodromes in the world.
4. How common is the practice of buying property for a crypt in Germany?
While the Germans are just gaining experience. Since the summer of 2018, we have recorded more than ten transactions.
Mostly crypto exhibit homes for sale convinced crypto enthusiasts. They take the course of Bitcoin for the current day, and if, for example, an apartment costs € 800 thousand, it means that 112 Bitcoins will be registered today (the rate of Bitcoin against the euro at the time of writing was 7096).
From the point of view of an ordinary German citizen, nominating the price of a house in a crypt also seems rather exotic. But the situation is changing very quickly – I think that in the next few years, Bitcoin and other altcoins will occupy a significant market share.
5. The Bitcoin rate is constantly jumping, and the owner of the property may refuse to sell it for digital money. How to be?
Indeed, the practice of calculating cryptocurrency for real estate has so far accumulated a small one. The volatility of digital money also plays an important role. To transfer the euro specifically to cryptocurrency, for it to buy a house in Germany, of course, is not worth it. But if savings are already stored in the crypt, you can quite seriously consider this option.
Recall that the first crypto-enthusiasts bought 700-800 bitcoins for a dollar. Today, their long-standing minimal investment may well “materialize” in a serious acquisition. If the owner of the object does not want to sell the property for bitcoins, most likely, it will be necessary to select another object. Either exchange digital money for fiat.
6. I have 150 bitcoins. What can you buy for this money?
Today, one bitcoin costs 7096 euros (please note that the rate changes every day). So, you have a million euros. With such a budget, you can buy an apartment for three bedrooms, for example, in Munich or a commercial space in a small German town. Real estate renting in Germany brings an average of 3-6% per year, depending on the type of object and its location.
7. How can a crypt be more interesting for Russians who want to buy something in Germany? Why she, and not the euro?
The volume of cryptocurrency and tokens in the hands of Russian companies and citizens is estimated at about 7.5 billion to 14.0 billion dollars. More accurate estimates do not yet exist, as digital money is not recognized in Russia.