After making its debut in retail stores and restaurants, bitcoin has now made its way into the real estate sector. Today's international society is made up of people who prefer to pay in many different currencies, but not everyone accepts dollars, euros, or yen. Cryptocurrency has become the most up-to-date way of buying products and services in the market. Ben Shaoul, president of Magnum Real Estate Group, comments the following regarding the recent acceptance of Bitcoin in real estate:
“Our buyer has evolved, they've moved from mom and pops to young people who want to pay with various forms of payment. Cryptocurrency is something that has been asked of us — 'Can you take cryptocurrency? Can we pay that way?' — and of course when somebody wants to pay you with a different form of payment, you're going to try to work with them and give them what they want, especially in a very busy real estate market.”
Instead of converting bitcoins into dollars straightaway, Shaoul intends to hold them as a capital. Considering the high rate at which bitcoin is appreciating, he sees this as an opportunity to make even more money.
However, not every dealer shares this level of confidence with the new currency. The first-ever single-family home sale involving bitcoin took place in Texas. The seller wanted to be paid in dollars so the payment was done via BitPay, a payment processing system that converted bitcoins into dollars. The trade went smoothly but could have been volatile if not for the recent stability in bitcoin market.
Although international dealers have been eager to buy into bitcoin for real estate, U.S. market seems somewhat reluctant. Most of the nervousness is due to lack of awareness as to how bitcoin is taxed. A tax attorney states that if you hold a cryptocurrency as a capital and it appreciates since the time you acquired it, all of that built-in gain would be taxed when used to buy an asset. This is similar to selling to a stock in order to gather enough cash to buy a building.
One of the first deals in the US involved a $1.6 million sale of land in 2014. According to the broker, his firm has not received any other inquiries about using bitcoin for payment. Emily Gaffney, a CNBC producer, explained that real estate industry has always been backward in technology. Payments in bitcoins are quite actually quite common. Hopefully, as more individuals come more knowledgeable about cryptocurrencies, paying with them will become the norm.