With Portugal ranked as 7th safest country worldwide, buying property in Portugal with crypto could be a great chance to get a secure home or make an investment.
The world we live in is surrounded by technological advancements of the modern era, one of which is crypto. It’s been a while since we have been hearing that crypto will be the future.
The revenue in the cryptocurrency market worldwide is estimated to reach US$45.3bn in 2025. Cryptocurrency has also found its position in the real estate sector. Portugal is one of the hotspots for crypto investors owing to its friendly regulations.
The country does not impose taxes on crypto transactions, making it an incredible option for buyers. Multiple sellers and real estate companies are accepting digital currencies to make the process even smoother. This guide will cover all ins and outs of buying property in Portugal with crypto.
How Crypto Works in the Property Sector?
The foreign population residing in Portugal increased by 33.6% in 2023, totaling 1,044,606 citizens with a Residence Permit. So, if you are one of them and planning on buying property in Portugal with Crypto, this might be your chance.
There is no restricted way to purchase property with crypto. While planning on buying property in Portugal with Crypto, you can pick from the two distinguished tactics. The method you select entirely depends on the seller and your financial preferences.
First Model: Buyer's Broker Converts Crypto Into Traditional Currency
This method involves an intermediary when buying property in Portugal with cryptocurrency. The buyer transfers cryptocurrency to a broker or exchange platform, where the funds are converted into euros.
After the conversion, the transaction will follow a conventional banking process. The buyer transfers the payment to the seller in euros for a convenient purchase. This strategy is frequently utilized because it follows Portugal’s banking regulations.
Second Model: Direct Exchange of Cryptocurrency for Real Estate
The second model relies on the direct exchange of crypto when buying property in Portugal with Crypto. In this case, no conversion to euros is required, as the buyer and seller will agree on the price in digital currency.
Use a digital contract to guarantee a safe transaction. The transfer will occur through blockchain technology, eliminating the reliance on banks. This method demands legal guidance to confirm the adherence to Portuguese property laws. Not all sellers accept crypto directly, so your options are restricted.
Benefits of Using Cryptocurrency for Real Estate Transactions
One of the most important aspects when buying property in Portugal with Crypto is to understand whether it has any benefits.
One major reason people buy property in Portugal with Crypto is the healthcare system. According to Numbeo’s 2024 Healthcare Index by Country, Portugal’s healthcare system ranks 21st globally.
SNS, or Serviço Nacional de Saúde, is Portugal’s public healthcare system. Established in 1979, it provides universal healthcare to all residents, mostly funded through taxes.
Let’s have a look at some of them.
Efficient Outcomes
Conventional real estate transactions comprise a massive amount of paperwork and long processing times. Crypto transactions can be completed much faster when buying property in Portugal with Crypto.
Blockchain technology permits quick payments to the sellers, which are safe and secure as well. Funds can be transferred within minutes, so you are free from any possible delays.
Lower Transaction Costs
Conventional property transactions have multiple extra charges, such as bank fees and currency exchange fees. Ultimately, these will add to the overall cost.
If you utilize crypto, you can eliminate numerous types of costs. Direct transactions between buyer and seller eradicate the need for intermediaries, which is why buying property in Portugal with Crypto is more reasonable.
Better Security
Buying property in Portugal with Crypto is a smart move when it comes to security. Blockchain guarantees that all transactions are recorded and cannot be altered.
This eliminates the risk of fraud. Smart contracts add another protection, guaranteeing that all conditions are fulfilled before the transaction is completed.
Tax Benefits in Portugal
Portugal has a favorable tax environment for crypto investors. AT (Autoridade Tributária e Aduaneira) is Portugal’s Tax and Customs Authority, responsible for managing and overseeing the country’s tax system. The government does not bombard you with capital gains tax on crypto transactions.
This implies that purchasing property with cryptocurrency will free you of additional tax burdens. However, tax regulations are variable, so you must be updated about them.
Global Accessibility
Cryptocurrency permits investors from across the globe to buy property without the hassle of currency conversions.
It removes hurdles such as banking limitations and high international transfer fees. Investors can buy property in Portugal with crypto without setting up a local bank account.
Regulations for Crypto Real Estate Purchases
When planning on buying property in Portugal with Crypto, you must not only stick to its positive side. Cryptocurrency also comes with a plethora of legal complexities that you must be aware of.
Different countries have different regulations about digital assets. In Portugal, the government has taken a progressive stance. Cryptocurrency is not declared as a legal tender, yet it is entirely possible to make transactions through it.
The primary requirement is adherence to the anti-money laundering (AML) and know-your-customer (KYC) policies. Buyers must provide identification and proof of funds to confirm that the transaction is permissible.
AML Laws
The European Union has implemented AML directives that also apply to Portugal. To prevent illegal activities, people buying property in Portugal with Crypto must follow these rules. Buyers must work with licensed dealers that report transactions above a specific threshold. Financial institutions and real estate agencies will demand documentation to inspect the source of funds.
A real estate registry has been set up that records all kinds of real estate transactions made through cryptocurrencies. Property contracts must be signed in the presence of a notary.
If you make a transaction through any digital currency, some additional inspections are required. Some legal professionals specialize in crypto real estate purchases to verify the obedience of local policies.
Tax Hurdles of Crypto Property Purchases
Portugal is one of the countries that favor cryptocurrency purchases through their tax purchases as well. You are free from capital gains tax on crypto profits. Yet, businesses and frequent traders may be taxed under special circumstances.
If you buy property in Portugal with Crypto, the transaction will be treated as a sale of digital assets. Buyers should consult a tax professional to learn the legal obligations. Property transfer taxes will be applicable.
The Imposto Municipal sobre Transmissões Onerosas de Imóveis (IMT) tax is calculated according to your property value. Stamp duty is also applicable. Take note that these taxes must be paid in euros, even if the purchase was made in cryptocurrency.
How to Find Crypto-Friendly Real Estate Agents & Sellers
The primary obstacle in this process is that not all real estate agents are aware of cryptocurrency transactions. Buyers must find professionals with experience buying property in Portugal with Cryptocurrency.
Multiple agencies in Portugal specialize in crypto real estate and facilitate smooth transactions – but finding them depends on your efforts. They assist with legal documentation and tax issues to make the purchase convenient for you. These agents have collaborated with crypto-friendly legal experts and financial institutions.
Sellers Open to Cryptocurrency Payments
Even though the acceptance of cryptocurrency has grown immensely in recent years, not all sellers accept digital payments.
Buyers must negotiate with property owners. Some sellers will ask for a direct crypto payment, while others may prefer its conversion to euros before finalizing the cost. You can also find some properties specifically listed for crypto buyers in Portugal.
Online platforms and blockchain-based marketplaces list such properties to prioritize your convenience.
How to Secure a Crypto Property Transaction
You cannot neglect the issue of security in the process of buying property in Portugal with Crypto. Buyers can utilize escrow services to protect funds during the process.
Smart contracts are incredibly helpful and facilitate your contract checks. They automate transactions and guarantee that both parties fulfill their duties before funds are released.
Step-by-Step Process of Buying Property in Portugal with Crypto
Have you planned on buying property in Portugal with Crypto? This process must be fulfilled with extreme caution. Be aware of all local policies and laws before you make the payment to secure your investment.
The process is different from conventional real estate transactions, so you should understand it in depth to avoid possible losses.
Step 1: Find a Suitable Property
As stated earlier, not all sellers accept cryptocurrency. However, you can always find some real estate agencies that specialize in crypto transactions.
You can work alongside these agencies to make this process convenient for you. Buyers should verify the property’s legal status before proceeding with the purchase. Always verify the ownership records to prevent disputes in the future.
Step 2: Select a Payment Method
After you have found your dream property, you should move on to select the payment method. Mostly, it is recommended by the seller according to what suits him, but you can always negotiate.
There are two frequently utilized options: converting cryptocurrency into the local currency or making a direct crypto payment. Both methods will have variable legal and financial considerations.
Some countries have a strict requirement to convert cryptocurrency into traditional currency before completing a transaction. In Portugal, crypto-to-fiat transactions are more common.
Numerous banks will facilitate this process if they support digital assets. Direct crypto payments are possible, but in this situation, both parties must agree on the exchange method.
Step 3: Negotiate the Terms
Once a payment method is decided when buying property in Portugal with Crypto, both parties must agree on the sale terms. A smart contract can be used for secure agreements.
Smart contracts ensure that conditions are met before transferring funds. These digital contracts operate on blockchain technology, increasing transparency and reducing fraud risks.
However, traditional legal agreements are still necessary. A real estate lawyer should review all documents before finalizing the transaction.
Step 4: Utilize an Escrow Service
Do you know what an Escrow service is? It is a way to protect the buyer and the seller. This third-party service holds funds until all conditions are fulfilled. Some crypto-friendly platforms grant blockchain-based escrow services for the security of both groups.
Once both parties fulfill their duties, the funds are released. Escrow will eradicate all possible risks and confirm your stress-free transactions.
Step 5: Finalize the Payment
Since all the paperwork for buying property in Portugal with Crypto is done, the buyer will move on to the payment. If you have opted for a crypto-to-fiat conversion, the funds will be transferred through a bank or payment processor.
On the other hand, if it is a direct crypto transaction, the buyer sends the finalized amount to the seller’s wallet. The exchange rate at the time of transfer will be vital to determine the final price.
Step 6: Register the Property
Remember to finalize the process through property registration. In Portugal, buyers must register the property with local authorities. This process will demand some documents, such as the contract of sale and a tax identification number. If cryptocurrency was converted into the local currency, you must have proof of the transaction for verification.
Once the registration is complete, you are legally declared the owner of the property. These steps guarantee a safe and hassle-free real estate purchase with cryptocurrency.
Tax Implications of Buying Property in Portugal with Crypto
Whenever you decide on buying property in Portugal with Crypto, you must be aware of the associated taxes with cryptocurrency. Portugal is popular for its crypto-friendly policies.
Despite this, multiple taxation rules apply to real estate transactions. Buyers must be aware of the different taxes to avoid any hurdles in the future.
Crypto Gains and Income Tax
Portugal does not impose personal income tax on cryptocurrency gains. This is why it is a well-liked destination for crypto investors. Still, you must know that tax laws can change over time.
Buyers should check out the latest laws on any new regulations that can influence their investment. Businesses that accept cryptocurrency can have tax duties, so you must distinguish between personal and commercial transactions.
Property Taxes on Real Estate Purchases
Whether you purchase a property with fiat or cryptocurrency, standard real estate taxes must be paid. The Municipal Property Transfer Tax (IMT) is a prominent cost that is decided by the property’s value and type.
Buyers must also pay stamp duty, which is calculated as a percentage of the property’s price. These taxes must be paid before the property is registered under the buyer’s name.
Capital Gains Tax Considerations
If cryptocurrency is converted into the local currency, capital gains are applicable. Portugal currently does not tax people on crypto gains, but this exemption is not applicable to all situations.
Investors who trade cryptocurrency regularly or operate as businesses can be subject to variable rules. You must consult a tax expert to understand if capital gains tax applies to your property purchase.
In a Nutshell!
It’s definitely possible to buy property in Portugal with crypto! This is one of the growing trends of the recent decade.
With its crypto-friendly policies, Portugal has become a prominent country where crypto investors can take hold. You may assume that it would be complicated, but if you follow the above tips, you will never go wrong.
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Frequently Asked Questions About A Guide on Buying Property in Portugal with Crypto
Can I buy property in Portugal using cryptocurrency?
Yes, you can buy property in Portugal using cryptocurrency. The Order of Notaries (ON) has introduced regulations that allow direct real estate transactions with virtual currencies without needing conversion into euros.
What are the investor obligations when purchasing property in Portugal using cryptocurrency?
When buying property in Portugal with cryptocurrency, investors must ensure transparency by tracing the funds’ origin, providing wallet details, and verifying wallet transfers to comply with anti-money laundering regulations.
How is the Order of Notaries preparing notary officers for handling cryptocurrency-based real estate transactions?
The Order of Notaries (ON) has launched a training program to equip notary officers with essential knowledge about blockchain technology, cryptocurrencies, and their legal and regulatory aspects in real estate transactions.
Is Portugal tax-free for crypto?
Yes, as of August 2023, Portugal is tax-free for crypto transactions. Gains from buying and selling cryptocurrency are tax-free for individual investors if the tokens are held for over 365 days and are not their main source of income.
Is Portugal 0% tax?
Portugal offers a Non-Habitual Residency (NHR) status, which allows residents to pay a flat 20% tax rate on income earned within Portugal, but global income remains exempt from taxes for 10 years.
What is the 10-year tax rule in Portugal?
Under the Non-Habitual Residency (NHR) regime, new residents in Portugal enjoy tax exemptions on foreign income for 10 years, while income earned within Portugal is taxed at a flat 20% rate.
How much is house tax in Portugal?
In Portugal, property tax (IMI) ranges from 0.3% to 0.5% of the property value, depending on the municipality. Rates for agricultural land are higher, around 0.8%.
