Can you buy real estate in Georgia directly using cryptocurrency? Until recently, the options for doing so were severely limited. Most developers didn’t want to touch crypto, and finding a private seller who would accept crypto was a needle in a haystack situation.
What was needed was a solution to keep buyers happy – where they could send crypto without having to personally convert it to fiat currency first – and sellers happy, where they received fiat currency without ever having to accept crypto.
This problem is something that ExpatHub’s real estate team has developed a solution for. So, if you are looking to get your money out of crypto and into something more stable, like bricks and mortar, Georgia is currently the perfect place to consider. Get in touch to start the process, or read below for more details.
Considerations With Crypto
When it comes to using cryptocurrency in Georgia, there are a few caveats to be aware of:
Currently, in Georgia, there are no laws and regulations surrounding the use of cryptocurrency as a means of payment. It is simply considered a form of legal barter exchange, and there are no transaction taxes associated with it.
Currently, capital gains tax on crypto is 0%, so if you become a tax resident of Georgia by staying here 183 days in any rolling 12-month period, or using the High Net Worth Individual program, then – barring any other tax considerations based on any other countries where you may have tax liability – both your trading activities and cashing them out would be tax-free in most cases.
On one hand, direct crypto payments for various services in Georgia are very limited or even non-existent (subject to change as cryptocurrencies gain more popularity in Georgia). On the other hand, that issue is very easy to rectify, as there are a few exchange services specializing in crypto-to-fiat conversion, even for non-residents. These services are typically used to exchange your crypto into fiat and have it deposited to your local or even international fiat bank account.
One possible alternative is using the crypto ATMs that are spread around Tbilisi. At last count, the number of Crypto ATMs was 39. However, these can only be used to exchange small amounts of crypto, and they also incur very high fees, so it is not recommended to use these, especially for large transactions.
Regulations are Coming
Although the crypto Real Estate market in Georgia is relatively undeveloped, utilization is growing both among locals and the expat community. Georgia is an increasingly popular destination for crypto digital nomads, proving the attractiveness and stability of Georgia as a crypto destination.
This is the time to get in on it while the regulations are lax, as increasing regulation of the market is expected within the next twelve months. In an interview in April 2022, the governor of the National Bank of Georgia stated that “[we are] planning to regulate the crypto market in Georgia”. He went on to state that the “Draft of Legislative changes at this stage includes registration/licensing, compliance testing, and anti-money laundering control requirements for crypto market players”.
If you want to get in before the situation changes, we are talking months, not years. So, it’s advised to start immediately.
Purchasing Real Estate With Crypto
The process of buying real estate using crypto in Georgia is almost the same as buying it conventionally using fiat currency. The only extra step is the conversion of your crypto into fiat currency using a brokerage company as a medium of exchange.
The problem that may be obvious here is that what most people have been doing is to exchange their crypto to themselves, into their own bank account, then pay in fiat for the property from their bank account. For many crypto traders, this is the step they want to avoid. Not only do you pay more fees (as there are two steps to the transfer, rather than one) but the importance of discretion that crypto provides is lost.
As a rule, developers and sellers are not keen to accept payment directly in cryptocurrency, although some do exist. Narrowing your property search to only those sellers that accept cryptocurrency is not advised, as this would over-restrict your choice of properties. As crypto gains more popularity in the coming months/years, it is entirely possible that property developers will start accepting direct crypto payments without the need for exchanging them via a broker, but for now, while the legal regulations are most favorable, an alternative solution is needed.
The solution is threefold:
- Have a relationship with a broker who will be able to pay out the fiat directly to the developer/seller’s bank account, so the fiat money never lands in your own account. The broker must also be experienced with clearing that money with the bank through any KYC process.
- Have a relationship with developers/sellers so that you are able to foster trust and assure them that this process is entirely legal (which our legal team has established), and that they have no reason to fear what is simply an unconventional process.
- Have legal support to ensure that the real estate sale (transfer of title) completes in a timely manner as your money is released to the seller’s account, following any bank clearing process.
ExpatHub has spent many months developing this process and building the required relationships to help fast-track our clients, from finding a property to completing the sale. We also have a legal team who can perform all required due diligence and other legal processes for the sale. This all forms a part of our VIP service for those who would like to buy using our crypto real estate agency.
The best part for our customers is that all of our real estate service fees for this are paid by the seller and the broker, so we only charge you directly if you choose to use any extended services like our legal (point 3 above, for example), buy-side, or property inspections, provided by our partner Checkit.ge.
To get started with your real estate purchase, please submit the form below, and one of our team members will get back to you with the next steps.
The process from start to finish with our service is normally about 4 to 12 weeks, depending on how proactive you are in communicating with our team and being available to make decisions about your purchase.
We can also offer complete purchase with a Power of Attorney so that the whole process can be handled remotely by our legal team (fees apply).
Be advised that using any brokerage company to convert your crypto incurs a fee per transaction (1-4%). The exchange can be done in two ways: as a wire transfer to a bank account or as a direct cash withdrawal, in which case the fee would be smaller.
Once you have owned the property for more than 2 years, you can sell it without paying capital gains tax in Georgia. However, if you sell in under 2 years, then a 5% capital gains tax will be owed in Georgia on any gains above what you originally paid for the property.