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Author Topic: Let's talk real estate with bitcoins and taxes  (Read 120 times)
newbit85
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October 22, 2017, 01:51:57 PM
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I've already offered a house in Milan, Italy for sale, I've notice there's now another two recent threads from europeans selling properties in btc as well.

My thread, apartment in Milan.
https://bitcointalk.org/index.php?topic=2184041.msg21910559#msg21910559

Spanish villa
https://bitcointalk.org/index.php?topic=2277482.0

house in portugal
https://bitcointalk.org/index.php?topic=2291820.0

I find this very intriguing because I believe this is the current best use case for btc.

I also believe we all (sellers and potential buyers) need to be EXTREMELY transparent about this both between ourselves (prices, regulation, taxes, etc.) and with regulators and the taxman, regulators are pretty adverse to this I'm experiencing this myself having had a couple of conversations with tax consultants and off the record conversation with Italian IRS agents because there is a huge risk for both tax evasion and money laundering, what I was told is that we're gonna be under heavy scrutiny by the taxman if we go through with this.

Personally I believe there's more room for legit business than there is for illegal business and regulators are currently a bit scared of this because it's new territory but they understand that, it's their mindset (and their job) to expect the worse and combat money laundering and tax evasion.

The legit  business opportunity here is far greater, people who invested in btc would be able to snatch a property for a very low investments considering how quickly the value of btc raised, for the seller this is a chance to get into btc or if they don't want to hold them after the sale they still got access to an untapped market.

In this regard I believe the move of the Italian Agenzia delle entrate (our IRS) in April 2017 to allow bitcoins to be used as the currency in a contract is a step towards more transparency.

link to relevant regulation (In italian, I can translate the whole documents if somebody is really interested)
http://www.agenziaentrate.gov.it/wps/file/nsilib/nsi/documentazione/normativa+e+prassi/risoluzioni/archivio+risoluzioni/risoluzioni+2016/settembre+2016+risoluzioni/risoluzione+n.+72+del+02+settembre+2016/RISOLUZIONE+N.+72+DEL+02+SETTEMBRE+2016E.pdf

Before that regulation it was already possible to make a sale with bitcoins, it had to be done as a private agreement whereby the parties exchanged bitcoins privately, then the seller would exchange it for fiat and the fiat currency and amount would be the actual currency mentioned in the official deed for example.
That means the btc wallet addresses, amount and date of transaction could be potentially hidden from public records easily accessible by the taxman, allowing btc to be mentioned directly on contracts that have to be registered with the authorities means the authorities get those info and could for example start to analyze the blockchain to look for the origin of that money with a legal framework for them to act, that is my opinion based on my experience, no one from the Italian IRS actually confirmed that to me.

I don't know about the regulator attitude in other european countries, I've invited the two users selling their properties to take part in this thread.

==========================

Another  aspect of this is tax elusion vs tax evasion, this is a very important concept in business culture (IT giants, I'm looking at you right now), the latter is illegal, but tax elusion is perfectly fine (might be immoral but its still legal)

How does bitcoins get taxated in the USA? what about Russia? any Chinese here?

when it comes to taxes what I gathered so far from investigating the current Italian situation it's pretty nice, let's say an American was to buy a property in Italy.

the USA IRS has agreement with the Italian taxman to exchange information, an American buying property here would have to make a declaration to the Italian taxman informing them of his or her US tax details (I guess this is your SSN and other details) and their properties and investments in Italy, this information would then be sent over to the American IRS.

When it comes to the taxes due from the US citizen to the Italian state for the property those are pretty low actually, there's a few component to it (IMU, TASI, IUC) and there's a complicated calculation to be done depending on the actual use and address of the property, if there's a tenant in it, if the tenant is the owner and so far, even considering the worst possible outcome of those calculation the total taxes due would me much lower than the taxes one pays on a financial return (currently in italy thats about 26%, I'm assuming it's similar in the US).

I believe that an American buying a property in Italy with btc would legally elude (not evade) the financial return taxes on their btc to usd exchanges swapping those for property taxes paid to the italian govt.

I hope some foreigners can help me out here to understand our reciprocal positions and interest, what I'd love to happen is the bitcoin community to start breaking in the real world economy, real estate (not million dollars properties but proper houses that common people can afford) I believe is the best use case so far, especially international real estate sales.

I'm more than willing to do my part here, as a home owner and a businessman who worked with international trade I am in a position to do it,I've got the know-how and the contacts needeed, I would also be very happy to be able to be amongst the first to do such a transaction because it's hard, it's new territory and it would better the world (I believe successful bitcoin in 10years time would be a huge improvement to the world finance, and it can happen only if we find use cases and start using them for real world economy)
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