Direct Bitcoin Home Sale Achievement Unlocked
The bitcoin circular economy continues to grow and squeeze fiat out of the deal, driving down demand for fiat and increasing demand for bitcoin. In a milestone this month, a Portuguese homeowner is the first person to accept bitcoin directly as payment for selling a piece of property.
There have been bitcoin home sales in the past, but in previous deals, the bitcoin was exchanged for fiat at the point of sale and settling the deal.
The sale is no random occurrence or dumb luck but went through as Portugal has changed its rules last month setting the directives as to how owners and real estate agents could sell properties for cryptocurrency directly.
The first property for bitcoin sale was an apartment in Braga, Portugal which was sold for 3 BTC on the 5th of May 2022.
Portugal trying to become more bitcoin-friendly
Portugal has always been known for its friendly tax regulations for bitcoiners but with competition heating up, they need to remain attractive to investors. El Salvador and CAR offer legal tender, while Panama is offering no capital gains tax.
However, the chance to own European property for bitcoin is indeed a unique offering. There are not only individual bitcoin holders but companies also with it on their balance sheet and could draw down their bitcoin position to acquire commercial real estate.
Real Estate is grossly overvalued
While this is a great milestone to add to the growing bitcoin circular economy, I still think it's a tad premature at current prices. Real Estate is still grossly overvalued compared to bitcoin in my opinion and I think a better option would be to use bitcoin as backing for a mortgage and leveraging depreciating fiat to pay for the property.
As you draw down your fiat obligations through your payments and your bitcoin appreciates your interest rates decrease and it becomes cheaper to pay back the loan.
If you want to see how gross real estate values are compared to bitcoin check out coinhomes where property is listed in bitcoin terms.
Real estate for bitcoin coming soon
As countries that are not G7 nations see their currencies implode you would be silly to demand that currency for real estate, sure some people who don't understand purchasing power will still accept fiat but a seller who knows the value of property in fiat terms would learn to insist on bitcoin.
There will come a time when sellers refuse to take Lebanese pounds, Turkish lira, or South African rands for property and would insist to be paid in a fiat currency of relative stability like the US dollar or bitcoin.
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Real estate is both overvalued and over taxed.
In the United States, local communities collect property tax. If your tax rate is 2%; then the government takes the full value of your property every 50 years. If it is 3%; the government takes the full value of your property every 33 years.
Where I live some people buy property in gold as a protest to fiat currency. The game of buying things with gold or other bartered items has been going on for generations.
!beer
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I never thought of property tax that way, mind blowing, I have to look at our local property tax here and see what the "rent" to own cost is
I came up with that formula when arguing against a raise in the property tax. The argument for the tax was that 2% was a really low number. We should raise it to 3%.
BTW, the tax explains why businesses are often reluctant to improve their property. So, lets say you did something that improved the value of your property by $100,000. The government would start taking $2,000 from you every year. You end up paying more than the cost of the improvement in just 50%.
Businesses have to pay taxes on the labor and material to make the improvement. The state will want capital gains and property tax on the improvement.
From an accounting point of view, it is better just to let the property deteriorate. Once it becomes an eye-soar the state will pay for the clean up.
It is absurd.
Dear @chekohler , I agree with you!
A growing number of non-Western countries are now experiencing collapse of manufacturing because of Chinese products.
A similar situation exists in the East Asian world where I live.
The East Asian industrialized countries of China, Japan, South Korea and Taiwan import energy resources, including oil, and food, wood, and minerals with dollars earned primarily by exporting cheap labor-based manufacturing products to the United States.
However, as manufacturing collapses due to Chinese products, the situation is increasing, making it impossible to earn dollars.
As the manufacturing industry collapses, the lower classes become unemployed and depend on unemployment benefits from the state.
The state is touting a solution to the unemployment problem by growing a service industry instead of manufacturing, but the situation is getting worse.
The lack of dollars creates more serious economic problems because the industrialized countries of East Asia mainly use US dollars to purchase oil in the Middle East.
If Bitcoin has the same position and value as the US dollar, will it solve the economic crisis facing the East Asian world?
You do know you ask the same questions over and over, I've answered this before so I wont answer again
Dear my comrade @chekohler, I hope you understand first that I have English conversational skills comparable to that of an American elementary school student.😄
I saw your article that Bitcoin was used in real estate transactions in Portugal, and I was curious to see if such a case could be applied to East Asia in the future, so I asked you.😅
I apologize if my question offended you.
The use of BTC in real estate is an iceberg, with its visible and subterranean part. The use we read in the news is not even a tenth. I recently heard a news in my city about buying and selling real estate, close to one million euros. And it was on the news, because the alleged buyers were scammers.
I saw a few high end real estate deals done with bitcoin, but in most cases the bitcoin was liquidated, I also see home ownership transfers done via the Liquid network, but I can't vouch for that, eventually fiat won't make sense for people to buy homes and bitcoin will be the only way they can afford a home