Can You Buy Real Estate With Bitcoin in Australia?
Bitcoin has seen a tremendous growth in popularity in recent years and the adoption of cryptocurrency has also seen an increase. The growth in cryptocurrency adoption means that you can now buy many things using Bitcoin and this often leads to a commonly asked question that I’m sure we have all wondered about at some point. Can you actually buy real estate with Bitcoin?
The answer is Yes, you can buy real estate with Bitcoin. For example, we saw a home in Sydney’s western suburbs be one of the first properties in Australia to be home listed for sale with bitcoin. The property is expected to sell for more than $800,000, or 45 Bitcoin at the current price.
We have also seen in this news in early 2019 that Real estate vendors across the world are starting to accept bitcoin as payment. For example, earlier this year, UK home developers in Colchester had sold their property for Bitcoin and they were the first people in the UK to sell their property for Bitcoin.
The main method to purchase real estate with Bitcoin is by simply finding a seller whom wants to accept Bitcoin and then and finding a buyer to agree on exchanging Bitcoin equivalent AUD value for the property.
Buying with Bitcoin
“A blockchain, originally block chain, is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a merkle tree root hash).”
Source: Wikipedia (https://en.wikipedia.org/wiki/Blockchain)
Essentially, this is a shared ledger that is kept in many locations which means that there is no central point that could cause failure. In addition to this, transactions will remain anonymous but traceable, meaning that it has the capability to be more secure and less vulnerable to fraud compared to a standard transaction. However, you will have to convert your digital currency into your local currency as it is not integrated within the economy.
Although purchasing purchasing a property with Bitcoin or any other cryptocurrency has no standard process at the moment, you could begin by negotiating and agreeing on a price with potential sellers. After agreeing on a price, you will then need to find a cryptocurrency solicitor if you want to transfer funds in a non-conventional way. And it might be a good idea to speak to your accountant to make sure there are no tax considerations by using BTC to buy the property. You could then transfer the BTC to a designated wallet at the current exchange price agreed upon in the sale contract. Your best bet is to speak to a sales agency that can handle cryptocurrencies as payment for house sales, they will be able to guide you through the process in more detail.
Potential Risks of Buying Property with Bitcoin
If you convert your Bitcoins to your local currency (AUD) for the transaction then there are a few things that you should be aware of. Bitcoin is volatile because it’s a relatively new market which means that the value changes frequently. Therefore, you will have to make the decision if the price on the day is suitable for you as tomorrow's price could change up or down making your property more or less expensive in comparison to the BTC value. There are more risks other than price fluctuations these might include: sending the BTC to the wrong address, tax considerations, stamp duty (which can only be paid in Australian Dollars), and the mortgage loans from the bank to name but a few.
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