Real Estate transactions with cryptocurrencies in Uruguay

September 15, 2021

“The trading of real estate through the use of cryptocurrencies as a means of payment is a growing trend in the world, making gradually its presence felt in Uruguay. In fact, there are already real estate agencies accepting this form of payment to negotiate the properties offered in specialized websites”, said El Observador

Through Consultation No. 6,149 of August 2021, the General Tax Directorate (DGI) ruled on the first real estate transaction with cryptocurrencies in Uruguay.

According to the mentioned case, a Notary Public, as a withholding and collection agent, consulted on the generation and calculation of national taxes based on a projected business involving the exchange of real estate and cryptocurrencies. It was imperative to discern the legal nature of the cryptocurrencies, which would determine the projected transaction (purchase and sale or exchange).

In this regard, to determine the nature of the business, the DGI considered that we were dealing with the exchange and not a purchase and sale because cryptocurrencies cannot be understood as a price, not being considered money or electronic money. 

On the other hand, regarding the tax treatment, he pointed out that concerning the IRPF (Impuesto a la Renta de las Personas Físicas – Individual Income Tax)the updated tax cost of the property must be compared with the current market value of the cryptocurrencies, to determine the existence of income and the need to pay the tax“. Regarding the ITP (Impuesto a las Transmisiones Patrimoniales – Property Transfer Tax), “the exchange is a taxable event due to the sale of a property. The taxable amount will be the real value of the real estate fixed by the National Directorate of Cadastre, updated according to the variation of the Consumer Price Index.”

There is nothing new to say that cryptocurrencies are advancing very fast around the world such as bitcoin, Ethereum, Tehter, Litecoin Dash, among others, are the most well-known.

According to the progress, it is expected that nations will also update their legislation, not to find legal loopholes.

Source: El Observador 15/09/21