As I write this column, the Bitcoin exchange rate has just broken the US$100,000 psychological barrier, fuelled by increased buying volume and positive market sentiment. Converted Crypto fan Donald Trump has put crypto-friendly officials into leadership roles, reassuring the community and driving prices higher across Bitcoin and altcoins.

Since it was first created back in 2009, the value of bitcoin has fluctuated, often wildly at times, as awareness and interest in the digital currency shifts. But these past years have seen a more steady exchange rate and increased confidence in a digital financial future where banks have limited or no control. But there is more. When bitcoin started, it wasn’t easy for the average retail investor to get involved. That’s no longer the case. As more individuals become comfortable with digital assets, the user base for bitcoin and other cryptocurrencies continues to expand, driving up demand and prices.

No tax on your profits

Living in Portugal makes trading in crypto currencies even more attractive! Portugal has a very favourable tax regime concerning crypto currencies. The country does not tax capital gains from cryptocurrency sales, making it an appealing place for those holding digital assets to invest in real estate. There is no income tax or VAT on the trade or possession of bitcoins (or other virtual currencies) by individuals. Companies or professional traders do pay tax on their crypto business but even those rates are quite competitive.

Investing crypto profits in real estate is a smart way to get the best of two worlds. On the one hand, you take advantage of your recent crypto profits, and on the other, you secure those returns in the booming Algarvian real estate assets.

In Portugal, deals have been made and houses have been sold and paid for in bitcoins since 2019. The honour of the first house goes to the northern city of Braga. The buyer paid the entire purchase price in bitcoins. In addition, these bitcoins were not automatically converted to euros or another currency as was customary until then. The luxury apartment was purchased for the virtual price of three bitcoins.

Cheap and fast international deals

In 2022 the Ordem dos Notários published an official instruction on drawing up deeds for the purchase and sale of houses in cryptocurrencies. The main advantage of this guideline is that they officially approve of direct payments with cryptos and that the seller can then continue to hold these crypto coins and is not obliged to change them into euros or other currencies.

A major advantage of cryptocurrencies when buying property is the low costs – even for cross-border transactions. Thanks to the blockchain, buyers can avoid high transfer and foreign exchange fees and purchase property in other parts of the world at comparatively low rates.

In addition, cryptocurrency transactions can be faster than traditional bank transfers, particularly for international buyers. Cross-border transfers involving traditional currencies can be delayed by banking processes, while crypto transactions may be completed within minutes. Of course, you have to find sellers who are willing to accept your digital currency and you have to take the necessary steps (escrow) to assure that the money will indeed be guaranteed to find the right parties. But once these hurdles have been taken, the Portuguese real estate climate is ready to accept your crypto money.