Innovating in real estate.
In recent years, cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) have revolutionized numerous industries, and the real estate market has been no exception. This is an emerging trend worldwide, and in Uruguay it has raised questions about the procedures, rules and legal implications of using crypto assets to buy and sell property.
A world of uncertainty? Since their creation, cryptocurrencies have been a source of unease given their volatility, the resistance to widespread adoption stemming from a lack of understanding, and doubts about their real utility. At MECOL ESTUDIO, our mission is to turn uncertainty into certainty, guiding our clients through a safe and efficient process for carrying out real estate transactions with crypto assets.
Guide to buying property with crypto assets: 1. Finding the property: locate a property for sale whose seller accepts crypto assets as a form of payment.
2. Negotiating the price: once the market value of the property has been determined in FIAT currency, the parties must agree on the type of crypto asset to be transferred. To remove the uncertainty of volatility, they may agree to transfer a stablecoin such as USDT instead.
3. Defining the wallets: to eliminate any doubt at the time of signing the Reservation Agreement (Boleto de Reserva), the addresses of whoever holds each party's wallets, along with the type of asset to be used, should be clearly established.
4. Verifying funds: at the time of signing, the buyer sends a satoshi (the smallest unit of BTC, if that asset is used) to confirm that the recipient does in fact control that wallet and that the funds are credited to the correct person. The buyer must comply with anti-money-laundering regulations just as in any other real estate purchase. Once the transfer has been made, the notary verifies it on the blockchain through forensics and authorizes the deed.
5. The contract: sale or exchange? Virtual assets are not legal tender, and the recent Law No. 20,345 classifies them as decentralized-ledger securities, considered intangible movable property. As a result, operating with them requires drafting an exchange agreement prepared by a public notary, setting out the terms of the exchange in detail.
6. Tax aspects: Uruguay has taken a favorable stance on the taxation of transactions involving digital assets. Until 2022, IRPF (personal income tax) and IRAE (corporate income tax) were calculated on the cadastral value, which made transactions more expensive. Now, a decree from the MEF (Ministry of Economy and Finance) has changed the paradigm, basing taxation on market (fair) value instead, making the transaction easier and more attractive.
Want to know more? At MECOL ESTUDIO we support every stage of the transaction so you can invest with full legal security.