Can you buy a house with Bitcoin?
Bitcoin is the first decentralised crypto-currency that exists solely in electronic form. One of the advantages of transacting with Bitcoin is being able to do it directly from person to person via the internet without going through institutional houses or banks. This means that fees are much lower, you can use them in every country and there are no pre-requisites or arbitrary limits in trading.
Whilst there are limited regulations on crypto-currency in general at this point, there are some important things to consider in using crypto-currency in South Africa. According to the South African Reserve Bank (SARB), “legal tender” is considered to be the exchange of notes and coins that are officially issued by a bank. According to this definition, crypto-currencies fall outside the realm of this. However, the SARB has no objection to it being used as a means of exchange.According to the South African Revenue Services (SARS), taxation laws still apply to trading with Bitcoin, including capital gains tax. Thus, considerations will still be taken into account like the intent of purchase or sale, the duration for which an asset is held and how it is financed. Furthermore, all the existing laws relating to this will still apply.
So, what does this mean for people wishing to purchase or sell a property using Bitcoin?
As long as both parties agree, the trading of the property will be legally binding even when using Bitcoin as a means of exchange.
The Bitcoin will have an equivalent Rand value for compliance, with the transfer duties payable on any sale of property.
All related purchase and sale legislation and regulations will apply.
Thus, Bitcoin can be used as a means of exchange in property transactions but the parties will need to take into consideration all the applicable legislation and related regulations.