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A Workaround For Agencies That Only Accept Cash
With more and more transactions involving cryptocurrency, the question is whether crypto can be used to purchase and settle real estate deals. The short answer is “not directly”—but there is a workaround.
The Deal
Crypto comes to NYC real estate: $29M property offered exclusively in Bitcoin.
New York County (Manhattan)
FEE POLICY: $84,931
TITLE FEES: $1,000+
RECORDING FEES: $500+
NYS TRANSFER TAX: $188,500
NYC TRANSFER TAX: $761,250
Cornerstone Insight
If real estate only involved an exchange between the buyer and seller, both parties could agree on any legal form of payment, including cryptocurrency. The stumbling block is that cryptocurrency isn’t accepted by state or county agencies, meaning transfer taxes and other government fees must be paid in cash.
The current workaround is that buyer and seller agree that crypto is acceptable payment for the property in question, with closing costs paid in cash. The lender, if there is one, would also have to agree so that releases and payoff documents can be generated. In essence, this is a hybrid crypto/cash transaction between the buyer and seller.
If you have any questions about cryptocurrency and real estate or other title challenges, or if you would like to discuss an upcoming or potential transaction, please contact us.
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