Paying with Cryptocurrency for Real Estate in Hungary: What You Need to Know

Why Use Cryptocurrency for Real Estate?

Speed & Efficiency: Cryptocurrency transactions can be completed in minutes, even across borders. This contrasts with traditional bank transfers that might take days.

Reduced Costs: Cryptocurrency transaction fees are generally lower, especially for larger amounts, which can be a significant saving for buyers.

Privacy: While transactions are recorded on the blockchain, they don't always reveal the parties' identities.

Investor Flexibility: Many investors hold significant cryptocurrency assets. Using these directly streamlines the purchase process.

Legal Considerations

While Hungarian law doesn't explicitly prohibit using cryptocurrency for real estate, it's crucial to note that cryptocurrency is not considered legal tender. Therefore, a clear agreement between the buyer and seller on the type and monetary value of the cryptocurrency used is vital.

Taxes & Cryptocurrency

The Hungarian tax system primarily operates in forints. Even when paying with Bitcoin, the transaction's forint equivalent is used for tax purposes. This impacts transfer duty, personal income tax, and other relevant levies.

Escrow & Cryptocurrency

Escrow, a secure legal process where a third party holds assets until conditions are met, can accommodate cryptocurrency transactions. However, it's important to use an attorney with a secure cryptocurrency platform. Contingency plans, such as verifying wallet addresses and seeking seller confirmation, are crucial.

What if the Deal Falls Through?

Real estate deals can sometimes fail. In such cases, it's recommended to preemptively decide whether the refund will be in traditional currency or the original cryptocurrency. Using escrow can provide additional security in ensuring the return of funds.
 

Conclusion

Cryptocurrency presents an exciting new possibility for real estate transactions in Hungary - even for investors considering the Hungarian Golden Visa opportunities. Understanding the legal landscape, tax implications, and escrow considerations is paramount. 

Want to consult with a legal professional for personalized advice? Contact us!