A provincial Russian mansion has been put up for sale with an estimated price of 3,000 bitcoins. However, the lack of legal classification for digital currencies complicates the treatment of bitcoin in the sale.
Mansion For Sale for Bitcoin in Russia
The Moscow-based real estate company, Kalinka Group, announced last week “the first case in Russia for selling an elite house for bitcoins.”
A country mansion with an area of 930 square meters has been put up for sale at the price of about 3,000 bitcoins, the group wrote. The house is located in the village of Nikolino on the Rublyovo-Uspenskoe highway west of Moscow.
At the time of valuation, that amount of bitcoins was worth only 482 million rubles or approximately $8 million, according to the group. However, today they are worth over $12 million. Nonetheless, the sale price remains at 3,000 bitcoins as of August 17. According to Ekaterina Rumyantseva, chairman of the board of directors at Kalinka Group:
For the first time, we were faced with the client’s desire to sell the house for cryptocurrency. Such transactions are still a novelty even for global real estate markets. We are pleased to be pioneers and open new frontiers in business.
Lack of Regulation Complicates Sale for Bitcoin
Rumyantseva explained that Russian legislation has not yet defined the rules for working with cryptocurrency, which complicates how bitcoin should be treated in a real estate sale. Citing the lack of regulation, the group wrote “we are carefully studying the possibility of such a deal. Prior to the appearance of the regulatory framework governing such a sale, the client is forced to pay for the agency’s services in national currency.”
In May, news.Bitcoin.com reported on the Russian central bank’s proposal to classify digital currency, including bitcoin, as digital goods. Meanwhile, lawmakers have been drafting a bill to provide a regulatory framework for digital currency.
However, the bill was reportedly delayed due to discussions on how cryptocurrencies should be defined. News.Bitcoin.com reported last week that Russian lawmakers are unlikely to classify bitcoin as a means of payment similar to Japan. It is more likely that digital currency will be classified as digital security or property, similar to the IRS and SEC in the U.S.
If bitcoin is classified as a tangible asset, transacting with it during the sale is possible under the barter agreement, the group detailed, noting that:
If the cryptocurrency is recognized in Russia as a kind of cash, then under the law on currency transactions, a transaction is impossible, since the sale of real estate must be made in national currency.
“The sale of a house in Nikolino, perhaps, will be the first precedent in the legal practice in the real estate market,” said Rumyantseva. “We carefully study the world experience of such transactions and understand that cryptocurrencies should be described at the legislative level in the shortest possible time, because this innovative type of payment is already able to affect the money turnover in business.” She added that, “if the house finds its buyer before the regulatory interpretation of bitcoin appears, we will be forced to recommend the client to sell in rubles equivalent.”
How do you think the Russian government should classify bitcoin? Let us know in the comments section below.
Images courtesy of Shutterstock and 3dnews
Need to calculate your bitcoin holdings? Check our tools section.
Purchase Bitcoin without visiting a cryptocurrency exchange. Buy BTC and BCH here.