Can you buy real estate with crypto?

The UAE continues to impress with the rapid adoption of advanced technologies. It is currently one of the leading countries in the use of cryptocurrency and its integration into its economy. Since 2022, almost anything in the United Arab Emirates can be purchased with Bitcoin, from morning coffee at a hotel to a private jet. Moreover, the first real estate transactions in the world were paid with cryptocurrency in Dubai. According to Business Insider, one investor bought 50 apartments in a complex using Bitcoin in 2018.

Thanks to the existing investment program, foreigners have significant opportunities. Many understand the benefits of purchasing real estate in the Emirates: from obtaining residency in a prosperous country to engaging in one of the most profitable ventures here — the tourism business. However, there are still risks and restrictions associated with cryptocurrency transactions. If you’re wondering whether you can you buy a house with cryptocurrency or how to invest in cryptocurrency Dubai, these and other topics will be discussed further in the article.

Advantages and risks to buy property with cryptocurrency

The main advantage of conducting real estate transactions with cryptocurrency in the UAE is the oversight provided by the UAE government, despite the fact that electronic currency is not yet officially recognized. However, buying property in Dubai with cryptocurrency is considered legal, as transactions are carried out through cryptocurrency exchange companies.

Advantages

Risks

Anonymity of transactions. Financial inclusion – provides access to services for individuals without bank accounts in the UAE. Faster transactions compared to the banking system: funds from foreign banks take several days to reach the seller’s accounts, while digital currency is transferred within minutes. Cryptocurrency is not subject to taxes (as of 2024). No international payment fees. Cryptocurrency can be used as a down payment for a mortgage.

Not all sellers are willing to accept cryptocurrency. Not all Emirates allow the purchase of real estate with cryptocurrency. Cryptocurrency wallets need to be well-protected as they can be targeted by fraudsters. Legislation could change anytime, potentially introducing taxes or fees on cryptocurrency payments. If keys or passwords are lost, it is almost impossible to regain access to wallets.

Many clients are attracted to the prospect of settling in a country with a high quality of life, which is a significant advantage of purchasing real estate in Dubai. After acquiring property, owners have the opportunity to obtain the Golden Visa, which is important for international business activities.

However, there are also disadvantages to buying an apartment in Dubai (UAE), including:

• language barrier;
• cultural differences;
• obtaining a mortgage can be complex;
• property maintenance costs which include payments for the upkeep of surrounding areas, cleaning of common areas, and maintenance of infrastructure (parks, pools, parking spaces, etc.).

Another important aspect to consider is that realtors and developers primarily handle real estate transactions involving cryptocurrency in close collaboration with cryptocurrency exchange companies registered in the UAE. When paying with cryptocurrency, the buyer must verify the source of funds.

History and regulation of cryptocurrencies in the UAE

Blockchain technology was first created and described by Satoshi Nakamoto in 2008. To this day, it remains unclear whether this pseudonym represents an individual or a group. However, the idea of a decentralized currency based on distributed ledger technology that functions without a central authority was met with excitement by the community of enthusiasts. Since then, cryptocurrency has oscillated between global recognition and widespread skepticism.

The first cryptocurrency purchase took place in 2010 when two pizzas were bought for 10,000 Bitcoin, which amounted to $30 each. Around the same time, cryptocurrencies like Bitcoin began to attract the attention of the UAE. Blockchain technology started to be promising for various sectors of the economy.

The development of cryptocurrency in the UAE has progressed as follows:

• Regulation and legal framework. In 2018, the UAE began actively developing a legal framework to regulate cryptocurrencies and blockchain technology. This included the creation of regulations and licenses for cryptocurrency companies.
• Launch of cryptocurrency projects. In recent years, several major cryptocurrency projects have been launched in the UAE. For example, in 2020, Dubai introduced its own cryptocurrency, emCash, which is used to pay for government services and more. Payments can be made through the emPay app.
• Innovation and partnerships. The UAE actively collaborates with international tech companies and organizations to advance blockchain technology. As a result, leading global cryptocurrency exchanges like Binance, Bybit, and Rain have established their headquarters in Dubai. All these exchanges are licensed and comply with the Financial Services Regulatory Authority (FSRA) requirements.

It is important to note that cryptocurrency is still not officially registered in the UAE. Therefore, banks do not accept it directly. All payment operations and purchases are only possible through cryptocurrency exchange companies.

Is cryptocurrency safe?

Since September 2022, the FSRA has introduced principles outlined in its cryptocurrency guide to protect investors. These include rules for companies conducting cryptocurrency transactions, high standards for wallet owner authorization and identification, combating financial criminals, and facilitating international prosecution of fraudsters. It is worth noting that there is no danger when purchasing cryptocurrency on licensed platforms or specialized exchanges. However, there is always a risk of falling victim to fraudsters.

Common scams include:

• Fake cryptocurrencies. The story of Onecoin, essentially a Ponzi scheme, is well-known. It was the greatest fraud in history, where the currency was presented as Bitcoin technology. However, the scam could have been uncovered if investors had noticed that access to transactions was only possible through a company-controlled website. This, at a minimum, violates the principle of no central control in cryptocurrency.
• Fraudulent ICOs or “Crowdsales”. These are investment platforms offering to buy new cryptocurrency (tokens) for existing ones, promising a percentage of future profits when the tokens increase in value. In reality, the liquidity of the new cryptocurrency may be questionable. And it may never appear on exchanges.
• Fraudulent exchanges and fake wallets. Unfortunately, these situations are difficult to avoid but possible. The first red flag for an investor should be offers that seem too good to be true or a platform with a short registration period.
• Malicious software. The theft of confidential information and data to hack wallets is not, unfortunately, uncommon. Therefore, it is at least important to protect personal devices with reliable antivirus software. At most, use hardware protection methods such as remote cryptocurrency wallets.

Which cryptocurrencies are used for crypto real estate purchases?

The most common cryptocurrencies used for real estate transactions in the UAE include:

• Bitcoin (BTC).
• Altcoin (ALT).
• Token (TKN).
• Stablecoin (SBC).

However, cryptocurrency exchanges in the UAE primarily deal with stablecoins such as Tether (USDT) and USD Coin (USDC). These stablecoins are pegged to the US dollar, meaning their value is fixed rather than volatile. This provides greater security for transactions.

What type of property can you buy with cryptocurrency?

There is a wide variety of real estate options available for purchase with digital currency in the UAE:

• Apartments. You can buy apartments in prestigious areas like Downtown Dubai, Palm Jumeirah, and Dubai Marina. For instance, complexes like BlueWaters, One JBR, and Address JBR offer such properties.
• Villas. In areas such as Arabian Ranches and Emirates Hills, you can also purchase properties with cryptocurrency. These locations are known for their luxury homes and high-end infrastructure.
• Commercial properties. Some developers offer offices and retail spaces for purchase with cryptocurrency. They can be a profitable investment for businesses.
• Luxury residences. In Dubai, luxury properties are also available for purchase with cryptocurrency in developments like Bulgari Residences and Madinat Jumeirah Living. These properties offer high levels of comfort and exclusive amenities.

Please note that not every Emirate allows foreigners to buy property, especially when it comes to mortgages.

In which Emirates can you buy real estate with crypto?

Cryptocurrency is most actively integrated into the economies of Dubai, Abu Dhabi, and Sharjah. As a result, finding developers offering suitable options in these areas is quite easy. However, non-residents can only buy property, offices, or even land in specially designated areas known as Freehold Zones. Here are some examples of such areas:

• In Dubai — Dubai Marina, Palm Jumeirah, Downtown Dubai, and Jumeirah Lakes Towers. In these areas, you can purchase both residential and commercial properties.
• In Abu Dhabi, Freehold Zones include Saadiyat Island and Al Reem Island, where foreigners can buy real estate with cryptocurrency.
• In Sharjah, such zones include Al Mamsha and Maryam Island.

Given the convenience of transactions and other advantages of using digital currency, many developers are now eager to agree to such deals. Though, they were considered quite risky just five years ago.

Which developers sell a property for cryptocurrency?

Each year, more developers agree to accept digital currency for their properties. Some of the most prominent large developers who were among the first to accept cryptocurrency as payment include:

• DAMAC Properties — a leading developer that has delivered 24,000 homes and 40,000 apartments to the market. DAMAC accepts Bitcoin for real estate transactions. The company strives to support the digital economy by offering innovative solutions to its clients.
• Emaar Properties — the company known for the Dubai Mall and the world’s tallest skyscraper, Burj Khalifa. Initially, the company stated that it would not accept cryptocurrency. However, the founders later changed their stance and began accepting Bitcoin for property sales. Emaar also launched its own blockchain-based loyalty token, EMR, which can be used for various transactions within the company.
• Dubai Properties — Part of the Dubai Holding Group investment group, with a presence in 13 countries. The company is famous for projects such as skyscrapers on the Al Jaddaf waterfront and townhouses in Villanova. Dubai Properties accepts Bitcoin as payment.
• Select Group — Another major developer that accepts cryptocurrency for its projects. The company is known for its high-quality residential and commercial properties.
• Nakheel и Binghatti Developers — Among the first development companies in Dubai. Both Nakheel and Binghatti Developers began accepting cryptocurrency payments for real estate in 2022, offering convenient services for international investors.

How to buy real estate with cryptocurrency

It’s important to note that cryptocurrency is not recognized as a legal tender in the UAE. However, since the country is actively developing its own blockchain platform, there are plenty of licensed crypto exchanges available. As a result, converting the required amount into dirhams or dollars for the transaction is quite straightforward.

It’s interesting that the future owner is not required to be physically present at the transaction. Agents can select an apartment based on the client’s current preferences, such as location, housing area, and price. Our Company, Dynasty Business Adviser, can assist in these and other issues. Our experts can help conduct the purchase remotely or through a power of attorney, carefully verifying the legitimacy of all documents and the correctness of the contract. For instance, in the Emirates, there are different forms of property ownership: freehold (full ownership), leasehold (buying an apartment for a specific period), and joint ownership.

What documents are required to finalize the deal and buy real estate with crypto in Dubai or other Emirates?

The list of documents required to buy property in the UAE with cryptocurrency is almost identical to those needed for a regular transaction. The only difference is that you must verify the origin of the funds in the digital wallets, primarily the legality of the sources. For example, you may need to provide receipts for the purchase of digital currency and a bank statement of income.

Documents required for transactions with non-residents of the UAE:

• an identity document (passport);
• contact information;
• a power of attorney (if the transaction is conducted by another person);
• a visa (if personally present);
• a preliminary agreement;
• NOC certificate confirming no objections from the developer.

Since documentation in the UAE is handled in English or Arabic, it is essential to prepare it properly and draft the contract correctly. It’s best to trust professionals with these issues to ensure that no nuances catch you off guard later.

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Mortgage availability

As in many other countries, mortgages are available in the UAE for both residents and non-residents. However, non-residents face stricter requirements:

• you can only purchase apartments, flats, or land in freehold zones;
• the loan term ranges from 5 to 25 years;
• ideally, the borrower should be able to make a 50% down payment on the property to minimize the risk of rejection;
• if the down payment is less than 20%, a rejection from the lender is likely;
• monthly income should be at least $4,000;
• the minimum age for the applicant is 21 years (preferably 25 years);
• at the time the loan is repaid, the owner should be no older than 65 years (practically, no older than 55 years);
• the borrower’s life must be insured (0.3% of the mortgage amount);
• the interest rate will be higher for non-residents (ranging from 6.5% to 9.5%).

To make a decision, banks may request tax returns and credit history for the past two years, as well as an income statement for the last year.

Is it better to buy real estate with Bitcoin or cash?

As more developers become open to new payment terms, purchasing property in Dubai with cryptocurrency is becoming increasingly easier. If your income allows for the use of digital currency, why not take advantage of it? especially considering the numerous benefits this method offers.

However, if you’re not accustomed to using cryptocurrency and plan to purchase it specifically for a transaction, professional assistance is essential — there’s a high risk of falling victim to scams. Even if you’re well-versed in digital currency, without knowledge of local laws, there’s a chance you might end up with a deal that’s not in your favor.

You can turn to our experts to minimize risks when purchasing property with cryptocurrency.

What we can offer you:

• We will help you open a bank account — which you will need for property maintenance.
• We can assist you in obtaining the Golden Visa — buying property makes you eligible for it.
• We will support you in selecting a reliable crypto exchange and assist you throughout the transaction.

Our company employs highly qualified specialists in finance and international law. We have been operating in the UAE market for over 8 years. During this time, we have gained extensive experience in handling transactions of varying complexity and have thoroughly studied the local cultural nuances. Understanding the market’s prospects, we take great care of our reputation. Naturally, we provide top-notch service, helping our clients conclude deals safely and on favorable terms.

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