Cryptocurrency has pushed the boundaries of global exchanges. It has become a means of payment that is used not only to pay for goods and services, but also to buy real estate. In Dubai, one of the most progressive cities in the world, you can legally buy housing for Bitcoin, Ethereum and other assets. This is a huge step for the development of the industry.
Regulation of cryptocurrencies in Dubai
In March 2022, Mohammed bin Rashid Al Maktoum, Minister of Finance and Deputy Ruler of Dubai, approved the Virtual Assets Law (VAL) and established the Virtual Assets Regulatory Authority (VARA), legalizing the status of cryptocurrencies.
The VAL states that blockchain companies and exchanges, in order to be licensed in Dubai, must open a headquarters and adhere to strict anti-money laundering regulations. VARA will promote Dubai as a hub for digital assets, raise awareness of them and attract foreign direct investment. Cryptocurrency in the UAE is overseen by the Securities and Exchange Authority (SCA), the equivalent of the U.S. SEC.
There are many crypto exchanges based in Dubai: Binance, Bitoasis, Bybit, Crypto.com, as well as startups Metaverse RFOX and Ripple, which have a regional office in the city.
How to diversify crypto assets with real estate in Dubai
Crypto coin owners are looking for ways to invest with minimal risk. One such is buying a home with bitcoins. It’s also a great way to diversify your investment portfolio: historically, real estate has a low correlation with other asset classes.
Buying a home with cryptocurrency is essentially exchanging a volatile asset for a relatively stable one. The property can be sold at a higher price or rented out, allowing you to earn passive income on a regular basis.
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To enter the real estate market it is recommended to have at least $100 thousand. In addition, when investing should take into account such nuances as the area, type of housing, local infrastructure (transport and social) and others. For example, buying a one-room apartment of 79 m² in the city center, an investor can pay about 720 thousand dirhams ($196 thousand). At the same time, the object can be rented out and receive 6-12% monthly.
In Dubai there are no taxes on the purchase, gift or inheritance of real estate.
The advantages of buying real estate in Dubai for cryptocurrency
In 2023, it is quite easy to buy a home for digital currency in the UAE. This way of investing has a number of pros and cons, detailed in the table.
| Advantages | Disadvantages |
|---|---|
| Exchange for a more reliable asset | The volatile nature of bitcoin. Since its price can change from day to day, any offer will also experience fluctuations in value over the course of a home purchase. |
| The cost of housing is on the rise. Since Dubai is developing very fast, the price of apartments is increasing at the same rate. According to Dubai Land Department, the cost of housing per 1m² has increased by 33.4% in January 2022. | It is difficult to find sellers. Not all people are familiar with digital currency and are afraid to use it in transactions. |
| Fast and easy transfer. The company claims that digital currency transactions take place in 30 minutes. | |
| Transparent fees. One has to pay the fees of the exchange from which the funds will be sent. | |
| Growing economy and a popular destination for tourists | |
| Tax-free environment (no capital gains tax) | |
| High yields (6-12%) | |
| Investor visa and residence permit can be obtained | |
| Buyer fully manages his property and receives tax-free passive income |
How to buy real estate for cryptocurrency in Dubai
You can buy housing in two ways:
- From a private seller. First, you need to find a reliable counterparty who is willing to accept cryptocurrency as payment. It is crucial that the terms of exchange are agreed and fixed. Since transactions are irreversible, it can be difficult or even virtually impossible to get your money back.
- Through agencies. This is a safer method. There are many organizations that offer to get housing for crypto coins. For example, clients of The Assets Advisors Real States can use Bitcoin, Ethereum, and Tether in transactions. To make the purchase safe, the money is sent to an escrow account. There is also the option to take out an installment plan.
To buy a house for cryptocurrency, you will need the same documents as for a standard transaction. There are different types of objects: from townhouses to villas and penthouses. The purchase algorithm is as follows (using TAA Real States as an example):
- Go to the official website.
- Fill out an application form and provide contact information.
- A catalog with available properties will be sent to your email. It specifies the neighborhoods, characteristics and photos.
- After selecting the object, a video conference with the broker is held. You can learn more about the option you like.
- The representative of the company will offer to look at the apartment online or offline.
- When the buyer selects an object, the organization will start the paperwork and generate an invoice from the developer or seller.
- The cost in dirhams is converted based on the current market rate of cryptocurrencies. The apartment is purchased for the amount specified in the contract.
- The buyer transfers the money to an escrow account.
- The company sends the documents.
The specialist will explain the nuances that can confuse the buyer. For example, it is important to discuss the correct address, payment plans, the responsibility of the parties.
The preliminary agreement is drawn up in foreign languages. In this case, it is important to use the services of an agent. He will also prepare the documents and help to fill out the contract correctly.
After the purchase, the client is entitled to a golden visa for 10 years. The company will also help with this.
Frequently Asked Questions
❓ Is it dangerous to buy a property from a private seller?
There are many scammers out there. For example, the seller may not actually own the house he is selling. It is better to go to an agency.
❕ What other countries sell apartments for cryptocurrency?
Such an opportunity is available in Thailand, the USA, Turkey, Montenegro, and others.
✅ Can I trust TAA Real States?
It is a reliable agency that has been selling real estate for several years.
⭐ What tokens are available for transactions?
Usually the most popular ones are ETH, BTC, USDT.
🏢 What types of apartments are available?
Investors purchase ready-made properties and properties under construction (off-plan). According to ValuStart report, the first type accounts for 60% of transactions.
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Author: Saifedean Ammous, an expert in cryptocurrency economics.
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