“About 50% of Our Clients Choose to Pay with Cryptocurrency.” How to Buy Real Estate in Bali with Crypto in Practice

Bali has already developed a well-established system for purchasing real estate for cryptocurrency with clear inspection procedures, taxation, and legal registration. We learned from Elena Kuchmey, CEO of the local real estate agency Satellite Estate Group, details about how the process works buying property in Bali for cryptocurrency in practice, how it differs from a traditional purchase with fiat money, and how the security of the parties is ensured during such transactions.

About the Purchase Process, Payment Methods and Taxes

— How is the process of buying and selling real estate for cryptocurrency in Indonesia (Bali) technically organized? What stages does such a transaction consist of?

— The client or the client’s authorized representative, based on the documents received from the developer, transfers cryptocurrency to the developer’s account. Main stages:

• Selecting an object.

• Making a deposit to reserve it.

• Receiving a package of documents from the developer.

• Coordination and signing of contracts for the facility.

• Depositing the amount specified in the payment plan.

• Obtaining supporting documents.

— What does this whole path look like in practice?

— Let’s consider the ideal schemes from a security point of view, which are also the ones we recommend to minimize risks:

First option: the client independently transfers cryptocurrency to the developer from his wallet. All transfers are made on the basis of an invoice issued and signed by the construction company. We recommend receiving the wallet directly from the developer, for example, in a common group with the agency. This will reduce the risks of both copying and forwarding errors and interaction with unscrupulous brokers.

Second option: the client has cash/non-cash dollars/rubles. Then, the developer or agency determines the contractor for the transfer of cryptocurrency. Then, based on the invoice and in agreement with the client, the contractor transfers the required amount in cryptocurrency to the developer, and only after the client confirms receipt of the amount to his account, the client transfers the money to the contractor. Within an hour, the developer prepares and sends the client a payment receipt. 

— What cryptocurrencies are accepted for payment? How are issues of cryptocurrency volatility resolved when conducting a transaction?

— It all depends on the specific developer. However, the most common and convenient cryptocurrency is USDT TRC20. By agreement with the developer, it is possible to accept payment in any cryptocurrency — if the cryptocurrency is different from USDT TRC20, an invoice is issued with a short payment deadline of 20–30 minutes due to the high volatility of tokens.

— How does the conversion of cryptocurrency into fiat money take place to officially formalize the transaction?

— Upon receipt of cryptocurrency, the developer converts the funds and deposits them into the legal entity’s account. That is why the developer can document the receipt of funds. All transactions are subject to taxation, which reduces the client’s risk when paying with cryptocurrency.

— What additional documents are required when dealing with cryptocurrency compared to a regular real estate purchase?

— No additional documents are required. All stages of the transaction are identical for different payment methods.

— How are tax issues resolved in such transactions? What taxes should the buyer pay?

— Taxation does not depend on the payment method, since when paying with cryptocurrency, the client also receives all supporting documents. When purchasing real estate, the client has an obligation to pay VAT 5% and 11%, depending on the title of the purchased property. The tax can be paid immediately or upon handing over the keys/registering the transaction with a notary in the case of real estate under construction.

About Difficulties, Security, And Guarantees

— What are the main difficulties that transaction participants face when using cryptocurrency?

— I would highlight the security of the transaction as the main issue here since not all developers have a well-established process for obtaining cryptocurrency. It often happens that the client has to independently find a contractor to carry out the transaction.

— What security measures do you use to protect clients’ funds when conducting cryptocurrency transactions?

— We work only with trusted developers. The client transfers funds to the partner only after confirmation from the developer about the transfer of cryptocurrency to his wallet.

— How is the origin of the buyer’s cryptocurrency funds verified?

— All cryptocurrency transactions undergo mandatory KYC and AML checks — this eliminates the receipt of currency (related to legalization and other things) obtained illegally. 

— What guarantees does the seller receive when selling real estate for cryptocurrency?

— If we are talking about guarantees for real estate or property rights, then they are identical to the classic ones. The method and means of payment do not affect the guarantees. If we are talking about guarantees for the transfer and execution of documents, then here I recommend following the process of execution that I described at the very beginning.

— How long does it take on average to complete a transaction using cryptocurrency compared to traditional payment methods?

— When paying with cryptocurrency, the developer usually provides documents confirming the payment very quickly — sometimes within an hour. When paying with a SWIFT transfer, receiving funds can take up to one week. 

— What percentage of your clients prefer to pay in cryptocurrency? Is there a noticeable increase in interest in such transactions?

— About 50% of our clients prefer cryptocurrency. We are noticing a major increase in demand for real estate payments with cryptocurrency, as this type of payment is becoming increasingly secure and convenient.

— What are the prospects for the development of crypto real estate transactions in Indonesia (Bali)? What regulatory changes are expected?

— We expect only positive changes. Even now, these transactions are not illegal. Management companies are expanding opportunities by giving the client the right to choose the currency for paying income from renting out real estate. Thus, payment in cryptocurrency becomes available not only for making purchase and sale transactions, but also for receiving passive income.