How Portugal Became a Crypto Haven

Recently, a new kind of client has been seeking out homes in Portugal, and real estate developers are noticing. Typically young and male, sometimes with partners and/or children, this client comes to the country with deep pockets. These new fortunes they have secured came via an interesting method: crypto.

Why Portugal?

Traders, business leaders, and investors within the crypto industry have now been moving to Portugal en masse since word got out that it is the place to be. One luxury real estate company based in Portugal claims they have recently sold 10 or more homes to families involved in cryptocurrency. Apparently, most of these people come from the US. Some of them are even in the public eye and known internationally.

The reason for this migration is Portugal is one of the only well-known crypto havens in Europe, apart from Malta. This is primarily due to the country’s lax tax laws. Portugal has 0% tax on cryptocurrencies if they are being sold in a personal capacity. Because the country treats cryptocurrency as a form of payment, capital gains from crypto transactions are not subject to personal income taxes like property and stocks are. However, laws are different when cryptocurrency is used in a more professional capacity. Businesses will face some taxes if they are registered in Portugal and deal in crypto.

It is expected that the fiscal loophole will be closed by 2023 in order to align the crypto market with securities like stocks. Perhaps this is why property experts are claiming that 2022 will be the year Portugal is inundated with even more expatriates looking to make the most of their crypto lifestyle.

The crypto influencer

With the rise of social media influencers, cryptocurrency has become much more than a lifestyle. Many have made careers out of promoting tokens like bitcoin. It is this kind of influencer that is contributing to the recent influx of expats in a significant way.

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One family helping to pave the way for others is the self-professed “Bitcoin Family”. In 2017, the family of five sold most of their belongings and dedicated the money to Bitcoin. More recently, they decided to relocate to Portugal. The family’s patriarch, Didi Taihuttu, says that he hopes to create a “crypto village” in the Algarve by running the community through the use of a decentralised autonomous organisation—a member-owned community without centralised leadership.

Wout Deley, an expat from Belgium, has lived in Portugal for some years now. He claims that by immigrating, he was able to double his crypto profits because cryptocurrency carries massive tax burdens in his home country. He believes that this “crypto migration” is a net positive for Portugal.

The property market

In the last decade, the number of new residents in Portugal that hail from foreign countries increased by 40%. Of course, the tax perks are not the only reason so many are flocking to Portugal’s sandy beaches. Portugal is known for being a safe country that offers a great living standard. It was even ranked as one of the best countries for expatriates to live.

(It is worth noting here that it may soon become more common for homes to be bought in cryptocurrency. Portugal’s Order of Notaries is currently preparing regulation to give notaries instructions for making deeds for property sales.)

The current market has proven that there is money to be made in crypto. However, it is still extraordinarily risky and viewed by many as gambling with money. It is imperative to remember that the value of a coin will not continue to rise indefinitely simply because it has been rising over recent years. Acknowledging the potential for a bubble to burst is important when making financial decisions.

What can be taken away from this growing trend is the fact that the property market in Portugal is sure to boom as more crypto influencers flock to the country. This will also cause an increase in those seeking out Golden Visas.

Evidently, property investments are continuing to prove to be lucrative. If last year was any indication of where the market is heading, then 2022 is sure to bring in more rewards.

If you have any questions about how Private Client Consultancy can help with your property investments, contact us today.