Buying with cryptocurrencies is an issue that has been gaining more relevance, both internationally and nationally, in recent years. While Bitcoin and other most widely used cryptocurrencies remain off the map for many, they are being used more and more and the time will soon come when their utility becomes commonplace and is seen as another traditional payment.
In Costa Rica there is already a record of real estate sales / purchases through cryptocurrencies and it would not be surprising if over time it begins to give more and more. Therefore, it is important that you know the basics of this purchase method and in this way decide which is the best suited to your situation.
How does it work in real estate?
Cryptocurrencies are a decentralized internet-based payment system. In the market there are more than 1,500 digital currencies, each with its price, which depends on supply, demand and speculation. Although they were born as a form of payment, they have also become a way of investing. And one of these new options is to do it in real estate through tokens or certificates backed by real estate assets.
For this type of purchase / sale, blockchain technology is used, this is a database that coexists in several locations and is shared by the community, in which each user has an anonymous address and can track the transaction history. To simplify, we can think of it as the ledger where each of the transactions get recorded.
The most important thing in order to complete a real estate sale agreement through cryptocurrencies, is that both parties, the buyer and the seller, must agree to carry out the transaction with this method.
Risks of buying / selling with cryptocurrencies
Before buying a property using crypto, you should always make sure that the platform issues Real Estate Participation Certificates, which guarantees that the land is yours. So it becomes vital to find out if the platform to be used legally ties the property to the crypto, because in case that is not well stipulated, the property would not be yours.
Also, both parties, the buyer and the seller, take some risk when using these currencies as a payment method, as they can be considered more unstable than common currencies. However, this has not stopped many buyers and sellers around the world, and there are already many sellers who only accept crypto as the sole method of payment for their property. So it is not surprising if this becomes more and more trend in Costa Rica.
Tips for buying real estate with crypto
- Make sure the platform you invest in issues Real Estate Participation Certificates that guarantee that the property is yours.
- Seek advice from an accountant and a real estate advisor trained in the subject, to explain what your tax obligations would be when carrying out this type of transaction.
- No central bank endorses cryptocurrencies.
- No investment is foolproof however trending it may be, so you should always make sure to analyze whether this option is right for your situation.
- Like any other investment, the subject should be investigated further, before entering and moving your money through cryptocurrencies.