Yes, it is legally possible to acquire a property in Portugal using cryptocurrencies, although the process requires rigorous compliance and careful fiscal consideration, especially after the changes introduced by the State Budget for 2023.
The acquisition can be done in two main ways, each with distinct implications:
- The Traditional Route: Prior Conversion to Euros:
This is the simplest, most common, and widely accepted route in the market.
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How It Works: The buyer sells their crypto assets on an exchange (broker), transfers the resulting Euros to their bank account in Portugal, and uses these fiat funds to make the property payment through usual means (bank check or certified immediate transfer) at the deed.
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Advantage: Any seller accepts the transaction, as they receive fiat currency (Euros), and the deed is executed in a standard manner.
Fiscal Attention (Capital Gains 2023)
Even in conversion to Euros, the transaction is subject to new fiscal legislation: the sale or conversion of crypto assets held for less than 365 days is subject to a 28% Capital Gains Tax (CGT) under IRS. If held for more than 365 days, the capital gain is exempt for individuals.
- The Direct Route: Asset Exchange (Crypto for Property):
This route allows the direct transfer of crypto assets (Bitcoin, Ethereum, etc.) from the buyer’s wallet to the seller’s at the time of the legal transaction.
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Legal Term: The legal deed will not be “Purchase and Sale” (which requires fiat currency), but rather a Deed of Exchange (exchange of a digital asset for a real estate property).
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Challenge: Requires finding a seller willing to accept cryptocurrencies and a Notary familiar with the process of registering this exchange.
Compliance Rules (Anti-Money Laundering): For the exchange transaction to be accepted and auditable, the Notary must comply with strict rules imposed by the Notaries’ Order:
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Mandatory Notification: The Notary must be informed of the intention to use crypto assets at least 5 days in advance.
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Traceability (Proof of Funds): The buyer must prove the legitimate origin of the cryptocurrencies. This implies demonstrating the transaction history, from the initial purchase (fiat to crypto conversion). Coins with unclear trace (mixers, etc.) will be refused.
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Identification: The digital wallet addresses of the buyer and seller are mandatorily registered in the deed, making the transaction auditable.
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Communication to Authorities: If the transaction value exceeds €200,000, the operation is mandatorily communicated to competent authorities (DCIAP and Financial Intelligence Unit).
Fiscal Obligations in Euros:
Even if property payment is made directly in cryptocurrencies, taxes due to the Portuguese State must be settled in Euros.
| Tax | Calculation Base and Payment |
|---|---|
| IMT and Stamp Tax | Must be paid in Euros (mandatory fiat liquidity) before or at the time of the deed. The tax amount is calculated on the declared transaction value (converted to Euros at the date) or on the Tax Patrimonial Value (VPT), whichever is higher. |
| Capital Gains (IRS) on Crypto Assets | The exchange of cryptocurrencies for the house is considered an “onerous alienation” (sale). If held for less than 365 days: Subject to 28% tax on profit (capital gain). If held for more than 365 days: Exempt from IRS (under current regime for individuals). |
Important Limitations:
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No Mortgage Credit: It is not possible to obtain conventional mortgage credit for operations paid directly in cryptocurrencies. This operation is limited to own capital.
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Volatility: The Purchase and Sale Promise Contract (CPCV) must provide clear clauses on the conversion rate to be applied and who assumes the risk of an abrupt fluctuation in the crypto asset value between signing the CPCV and the final deed.
Regulation and Procedures:
Although there is no specific legislation regulating the use of cryptocurrencies for property purchases, the Notaries’ Order in Portugal has issued guidelines to facilitate these transactions. These guidelines include the need to verify fund origin and ensure that all parties involved are properly identified and informed about procedures.
Transaction Examples:
Several real estate transactions have already been carried out in Portugal using cryptocurrencies, with Bitcoin and Ethereum being the most used. A notable example was the purchase of an apartment in Braga for three Bitcoins, marking one of the first transactions of this type in the country. Having configured an exchange contract between bitcoin and the property.
In summary, while it is possible to buy properties with cryptocurrencies in Portugal, it is essential to follow legal procedures and consider conversion to fiat currency to simplify the process and avoid legal complications.