The use of cryptocurrencies as a means of payment is nothing new in Portugal. However, the buying of real estate using cryptocurrencies has only recently gained prominence.
The fact that there is no specific legislation on capital gains resulting from investments in cryptocurrencies means that Portugal remains on a list of countries that do not, as a rule, tax this income, resulting in many foreign investors taking an interest in the country.
Thus, many investors have sought to understand how the purchase of real estate using cryptocurrencies is processed in Portugal, triggering the recent pronouncement of the Portuguese Notaries Association (ON) on this issue in order to raise awareness of the importance of this issue, and for legislative intervention.
Given the absence of laws and regulations preventing the purchase of real estate using cryptocurrencies, the ON has prepared an internal regulation that will provide notaries with guidelines to be followed in the event of such transactions.
According to recent information, this internal regulation will now provide that real estate transfers made using cryptocurrencies must observe the following prior communication procedures:
– the notary must be informed of the parties’ identification details, as well as the price and type of cryptocurrency;
– copies must be provided of the cryptocurrency records (from their acquisition to the completion of the exchange) and of the respective storage wallets.
This information must be provided at least five days before the scheduled date for the exchange deed, since notaries must forward the details to the responsible authorities.
In situations where deals exceed the amount of €200,000, notaries will also have to compare the value of the cryptocurrencies at the date of the promissory contract and their value at the date of the deed.
Notwithstanding the regulation on cryptocurrencies by the ON, we believe that the ideal would be to establish a specific legal framework for these transactions and thus promote greater legal certainty for the parties involved, as well as greater control over money laundering.
Rogério Ferreira Fernandes
Duarte Ornelas Monteiro