While some real estate transactions begin to settle in bitcoins, questions arise about the use of cryptocurrency. How to manage instability, get a loan or declare any capital gains? Explanations.
The blaze of bitcoin , virtual currency whose price has soared in recent months, has reached the US real estate market, especially in Florida , allowing foreign investors to dodge exchange control in their country and economic sanctions. At the end of 2017, bitcoin was used to pay for some 75 properties on US soil – notably in southern Florida and California – according to real estate firm Redfin.
“Bitcoin accepted”: this precision is multiplied in the description of announcements of sale of housing in Miami and its surroundings. A seller has even gone further by accepting only this crypto-motto for his proposed apartment at $ 500,000. A few weeks ago, a developer was proposing to sell a hundred apartments in Dubai, payable in bitcoin .
Loans denied to investors in bitcoins
But if bitcoin begins to be known to the general public, since starlet Nabilla itself boasts the merits , this mode of payment does not have less than sacred disadvantages. And in the first place, its extreme volatility. The cryptocurrency began the year 2017 around $ 1,000 and was close to $ 20,000 at the end of the year, after an erratic outbreak near the holidays. She was quoting Friday around $ 15,000. Its use in real estate transactions is still in its infancy and industry players are skeptical because of this instability.
“I would be amazed if, in a year, we find that there are hundreds of real estate transactions in bitcoin,” said Jay Parker, Florida’s boss of real estate broker Douglas Elliman. In addition, according to the British tabloid The Sun , British investors using bitcoin would be denied outright the right to a supplementary loan on the grounds that the risk of money laundering is too strong.
CSG and income taxes
And in France, the tax administration was quick to point out that the use of bitcoin remained subject to taxation. Bercy, who warns against any attempt at fraud, emphasizes that capital gains made on bitcoin must be declared and taxed. The gains made thanks to the 1,469 cryptocurrencies currently recorded are not considered as movable income, conversely for example capital gains on shares. They are not subject to the famous ” flat tax ” of 30%, in force since January 1st.
These gains, on the other hand, are subject to the Generalized Social Contribution ( CSG ), currently 17.2%. They are also subject to income tax (IR), which can be as high as 45%, in the case of wealthier taxpayers. Two cases, concerning IR, are planned. If the activity is occasional, the holder of bitcoins is subject to the tax regime of non-commercial profits (BNC). If it is usual, it is subject to the regime of industrial and commercial profits (BIC). “In both cases, the bill can be salty”, with “a tax rate of about 60%,” said Éric Delannoy, president of the firm Tenzing, which recalls that the rules are applied “default rules “Which makes it possible to” subject earnings to a very high tax rate “.
Abroad, however, bitcoin transactions can be a distraction for foreigners unable to invest in the United States in a traditional way, said Charles Evans, a Bitcoin economist at Barry University in Florida. The evolution of the real estate sector “seems to be driven by international investors who bypass the inefficient banking and monetary controls at home and by fans of virtual currencies in the United States,” he says.
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