Topic: Buying a house with bitcoin - page 4. (Read 6319 times)

https://www.bitpremier.com/5-real-estate

Could you please tell me of there is a Real Estate platform/site/portal/forum or whatever place i can go look for a house that the owner is selling in BTC??

it's a good idea
I think I can't avoid tax even I use bitcoin, but I don't know if in UK

good idea to buy a house using bitcoin currency

Thanks catfish et al for taking the time to provide some great info im going over the posts/info, i might have to hire yous for consultancy once we at $5k BTC .


Like i said though im still waiting for this UK housing market crash (i do see a 30% drop sometime soonish maybe yes but could be 10 years who knows?).  So far ive paid about what... £50k - 60k? in rent over last years. 

Investing elsewhere requires some skill, could go with gold/silver but what else i have no clue, sticking some money in property might not provide any return but at least im not paying 600 PCM anymore which would be a great saving?

I am not sure about UK tax law, but I am pretty sure that US tax law says that when you exchange one property for another property you will need to treat it as if you first sold your first property for cash and then used that cash for the 2nd property.

An example of this is as follows:
You have 100 shares of company ABC that you bought for $1 each (total cost basis of $100). The shares of ABC are now worth $50 each (total value $5,000, total appreciation, $4,900).

You exchange these 100 shares of ABC for 20 shares of company XYZ. Company XYZ are worth $250 each and the total
value of these 20 share is $5,000.

My understanding is that you would need to pay taxes on the 4900, which is the difference between the value of the shares you bought verses the cost basis of the share you purchased.


I don't see how this would be the case. BTC is easily converted into fiat. If a buyer or seller is desperate (or otherwise urgently wants/needs to complete the transaction then the other will have an advantage.


There are many services that assist merchants/sellers/businesses in accepting bitcoin (coinbase, bitpay, MtGox(before they failed).

There have been a couple of replies here re: tax treatment of UK property purchases (i.e. doesn't matter how the transaction was performed, registry for ownership requirements etc.) that sound like they know what they are talking about. If you're keen on living on the bleeding edge and setting new precedent, then my advice (IANAL) would be to check out existing legal precedent for house purchases made with other commodity assets rather than with exchangeable currency.

In other words, check out precedent for house purchases made using gold. This, here in the UK, should be easy enough as it surely isn't a rare situation. There's a lot more resistance in the UK for Bitcoin to be seen as a currency rather than a commodity / asset (for some reason - try opening a bank account for a Bitcoin business, for example), and if a formal argument had to be made (i.e. you argued with HMRC and took a Bitcoin-related tax case to the Tax Commissioners for arbitration) then I'd expect Bitcoin to be 'deemed' to be a commodity asset rather than a currency, in line with the American IRS opinion of Bitcoin.

However, the most important aspect in the UK for the capital gains treatment of property is whether the house is your primary residential dwelling or not. I haven't noticed in your posts whether you've mentioned this or not. If you're planning on buying your primary residential dwelling (you said you're currently renting, so perhaps your first home?) with Bitcoin, then you shouldn't need to pay CGT on any house price gain when realised on sale. No matter how you buy the house, if it's your primary home then you don't pay CGT - certainly not in my experience.

This, of course, assumes that the UK residential housing market will net you a gain in the near future, which is a very dodgy assumption anywhere outside of central London (which is a global market and disconnected from the rest of the UK housing market).

If you're buying commercial property or a buy-to-let residential investment property, then that's taxed like any other investment in the 'property' asset class.


If you're talking about the CGT deemed on the value difference between the Bitcoins when you first acquired them versus the final purchase price of the house (as per Land Registry registration, which you'll have to do when taking ownership, as pointed out above)... well this is the tricky bit. You'd have to declare the Bitcoins on your self assessment tax return as an asset, and you'd have to be able to value the Bitcoins as at original price of acquisition. If you mined them, then they're not free since you'd have paid for the mining hardware and the opportunity cost of doing so. If you acquired BTC early on in the game, valuation against GBP would be vague as hell because unlike most commodity markets, there is no price fix for BTC. And unlike now, with reliable exchange markets, there was no easy valuation / GBP exchange (well, Britcoin / Intersango worked for a while a few years back, but whether their 'market price' history would work in a tax court is open to debate).

Equally, I'm not sure whether Bitcoin has any guidance for asset valuation / tax treatment from HMRC (I'm not a tax lawyer, just a freelance consultant who has had to do my own company tax returns for over a decade). If there's no exclusion then I'd expect a similar treatment to gold, for the reasons stated above.

However, you'd have to declare this on the tax return, as in most other Bitcoin related trading, there's no easy way for HMRC to track Bitcoin capital gains by UK tax residents. Currently, I expect most of us in the UK don't declare Bitcoin (or any other altcoin) gains...

But being the first person in the UK to buy a *residential home* with Bitcoin would be a big story for the media here. If you didn't keep it completely secret, then I'd expect the story to be all over the national press (for non-UK residents, talking about the housing market here is a national pastime). And you can bet your life that the taxman would pick up on this. Given that you need to involve other parties (solicitors, Land Registry, the counterparty selling the house) when buying a house, keeping the transaction secret could prove rather difficult.

TL;DR - Unless someone's already bought a house with BTC in the UK, you're going to be news, and the taxman will know about the transaction purely that way. So the probability is high that you'll end up a test case for Bitcoin CGT treatment by doing this.

But I applaud your sentiment re: diversification - if your entire net worth is currently Bitcoin holdings, then you're taking a big risk and - with the volatility of Bitcoin - loads of emotional stress watching the value gyrate. UK residential property though? Have you considered buying some gold coins with the Bitcoin? Easy enough to do - plenty of reliable people selling bullion for BTC (I started off selling my mined BTC for silver and gold bullion in 2011...) - and if you wish, discreet enough to not declare to the taxman. Gold is currently cheap...

You will most likely have to pay taxes no matter which way you purchase the property. I would think your best bet would be to find someone who is selling a property and looking for bitcoin for it. It would be a challenge to have a realtor accept bitcoin especially if they have never heard of it.

Its the deal or no deal problem, when your bitcoin starts becoming 90% of your total net worth its time to diversify no?

If the UK housing market crashes and you have a mortgage is that better vs cash purchase?  (you'd have negative equity but i guess you can dump the mortgage is that the advantage?)

Also with cash buys you get on average 7% cheaper purchase to begin i have read.

And f*** UK, just buy this one https://www.bitpremier.com/items/view/495 . Isn't it awesome ? LOL

Yeah its happening right now , take a look at https://www.bitpremier.com/ .

Not sure about uk but u will need to pay tax, that is for sure. And wont be to hard to find somebody to accept bitcoin as payment, when u offer it they will accept. Nobody would turn down a sell opportunity .

I think I would end up blowing it on a car... or maybe bacon. Lots of bacon.

Depends on how many BTC I can earn between now and then. But seriously, if the value of a few bitcoins goes up high enough in say, five years to buy a house... would you be able to hold off spending them long enough to buy that house?

No offense but you'd have to be a total idiot to buy real estate with bitcoin.  We are still in the era of fiat mining.  Not even the richest 0.001 percent pay hard cash for real estate unless of course they are in a huge hurry and willing to take a loss.  Get some money counterfeited by the bank for you, er, I mean get a loan! 

If you aren't on a hurry I would recomment waiting a couple of years before buying a home with your btcs,
if in 2014 you would buy a decent/big house, probably in 2016 you will have a castle...

Talk to (several) tax advisors first before making any assumptions.


Maybe this will help? http://www.bitlegal.net/

I'm looking forward to when bitcoin is used regularly for the purchase of real estate (especially in the USA).
Having an escrow company who specializes in R.E. transactions would be a good start. A long standing escrow company who integrates bitcoin into its existing services would be an even better start.
Maybe a company like Old Republic (nothing to do with the Star Wars game ;-). It's been awhile but ORTC (Old Republic Title Company) used to have another company (Orexco) associated with it who facilitated 1031 exchanges acting as an intermediary so it would be nice to see them also stepping into potentially facilitating "like exchanges" for crypto currencies.  


Good luck house hunting and wishing you even more good luck in finding an advisor competent enough to guide you.

not sure about UK, but in the netherlands you'd still have to pay tax on gambling profits

buying/selling houses in BTC would seem nice at first, but cars and houses have many documentation to prove ownership and all, so avoiding taxes will be pretty much impossible. They will ask questions.

BTC won through gambling is tax free in the UK. From what I have been told the revenue look at it like this. Bob paid £500 for 100BTC. He gambled and surprisingly increased his holdings to 110BTC. Bob sells 100BTC for £50000, and the 10BTC winnings for £5000. Bob owes capital gains tax on £50000-£500 initial stake. The £5000 is tax free.

The revenue only cares when the sum of money is over capital gains limit for the year, so you can put away £10k or £11k capital gains tax free each year as can a spouse.

I have got a luxury seafront flat for sale in Cyprus and 1 in Montenegro in Btc if you are interested