💡Usability
Digital Currencies: Innovating Real Estate Investment
Within the real estate sector, various legal transactions can be generated, such as:
Lease agreements, in the residential or commercial sector;
Purchase and sale agreements;
Tokenization of real estate assets;
Purchase of real estate debts;
Real estate guarantees;
Real estate loans,
among other types of contracts.
Using cryptocurrencies as a means of payment in Venezuela is possible because national regulations allow it. For example, Article 9 of the Constituent Decree on Cryptoassets and the Sovereign Petro Cryptocurrency, published in the Official Gazette of the Bolivarian Republic of Venezuela, Extraordinary Issue No. 6.370, dated April 9, 2018, states the following:
Article 9. The Venezuelan State will promote, protect, and guarantee the use of cryptocurrencies as a means of payment in public institutions, private companies, mixed or joint ventures, within and outside the national territory. (Emphasis added).
As we can see from the transcribed provision, the Venezuelan State is setting the precedent by enshrining in law the use of cryptoassets as a means of payment.
Furthermore, for merchants who are obligated to pay the Value Added Tax (VAT) for activities and legal transactions related to the sale of movable and immovable goods, provision of services, and other activities, the use of cryptocurrencies as a means of payment is also possible. This is stated in Article 5 of the Constituent Decree for Partial Amendment of the Decree with Rank, Value, and Force of Law that establishes the Value Added Tax, published in the Official Gazette of the Bolivarian Republic of Venezuela, Extraordinary Issue No. 6.507, dated January 29, 2020. This provision applies to taxpayers who are liable for the payment of this tax.
Article 5. Regular taxpayers of this tax include habitual importers of goods, industrialists, merchants, habitual service providers, and, in general, any natural or legal person who, as part of their business, purpose, or occupation, carries out activities, legal transactions, or operations that constitute taxable events in accordance with Article 3 of this Law. In any case, the business, purpose, or occupation referred to in the heading of this article encompasses the operations and activities effectively carried out by such individuals.
For the purposes of this Law, industrialists shall be understood as manufacturers, producers, assemblers, bottlers, and those who habitually carry out activities involving the transformation of goods.
First Paragraph: Financial leasing companies and universal banks, both governed by Decree No. 1,526 with the Force of Law for the Reform of the General Law of Banks and Other Financial Institutions, shall be regular taxpayers, in their capacity as service providers, for financial leasing or leasing operations, only on the portion of the consideration or installment that amortizes the price of the asset, excluding the interest contained therein.
Second Paragraph: General warehousing companies shall be regular taxpayers only for the provision of storage services, excluding the issuance of securities backed by the goods subject to the deposit.
In this same regulation, Article 62, numeral 3, addresses the use of cryptocurrencies as a means of payment for the acquisition of real estate. In this regard, the provision states the following:
Article 62. The tax rate established in the third paragraph of Article 27 of this Law shall be determined by the National Executive through a Decree and shall be applied when any of the following situations occur:
When the sale of movable goods or the provision of services occurring within the national territory is paid in a currency other than the legal tender in the country, cryptocurrency, or cryptoassets different from those issued and backed by the Bolivarian Republic of Venezuela.
If the sales agreement for a movable good requires, for its validity, the notarization by a notary public, the notary must request, prior to the authentication of the document, the document(s) that demonstrate the payment of the movable good in bolivars or in cryptocurrency or cryptoassets issued and backed by the Bolivarian Republic of Venezuela. Alternatively, the notary must demand proof of payment of the tax obligation referred to in this article.
When sales of real estate are carried out and agreed upon and paid in a currency other than the legal tender in the country, cryptocurrency, or cryptoassets different from those issued and backed by the Bolivarian Republic of Venezuela.
In this case, the registrars must request, prior to the registration of the sales agreement document, the document(s) that demonstrate the payment of the real estate in bolivars or in cryptocurrency or cryptoassets issued and backed by the Bolivarian Republic of Venezuela. Alternatively, they must demand proof of payment of the tax obligation referred to in this article. (Emphasis added).
Additionally, there is another set of regulations related to the use of cryptoassets by individuals and legal entities that need to be taken into account to ensure that transactions in the real estate sector are secure, transparent, and comply with all legal formalities established under Venezuelan law.
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