Can You Buy French Real Estate with Cryptocurrency?
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We aim to stay current and keep you informed about new and innovative trends in the fast-moving French property market. It’s about having “a finger on the pulse” and staying ahead of the competition. That’s what we do; we get copied a lot, even by AI, you could say we influence influencers, c’est la vie. It’s a nice to be recognised as one of the market leaders in the industry. Today, we publish this Crypto related article, based on recent conversations with our international clients.
As the popularity of cryptocurrencies increases, more buyers, particularly Americans and investors, are considering using digital assets to purchase property in beautiful France, especially for luxury homes and prime real estate, including chateaux and historic properties. Although “crypto” is changing the way people invest and transfer value, French real estate law remains firmly rooted in traditional principles, particularly the requirement that transactions be settled in Euros.
In this article, our legal experts explore and analyse the challenges and legal solutions for buyers who wish to use cryptocurrency when buying property in France. From mandatory Euro payments to innovative legal mechanisms like “payment in lieu” and exchange contracts, we clarify what is feasible, what is not, and how to navigate this complex and evolving legal landscape.
Purchasing Property with Cryptocurrency in France
Buying property in France with cryptocurrency presents several legal complexities, as French law does not currently recognise digital currencies as an official means of payment. While interest in crypto-funded real estate transactions is growing, in particular, in newly built properties, the legal framework in France remains conservative, requiring careful structuring to ensure compliance with existing regulations.
Cryptocurrency vs Legal Tender
The French Civil Code stipulates that payments in France must be made in Euros. Cryptocurrencies are not legal tender in France. According to Article 1343‑3 of the French Civil Code, updated by Ordinance No. 2016‑131 and later amended by Law No. 2018‑287, here’s our translated version in English language:
« In France, the payment of a monetary obligation is made in euros. However, payment can be made in another currency if the obligation is thus denominated and arises from an international operation or a foreign judgment. The parties may agree that payment will be made in a foreign currency if it occurs between professionals, provided that the use of a foreign currency is commonly accepted for the operation in question. »
You can consult the full text on Légifrance, the official French government portal for legal matters and texts. The relevant section is under Article 1343‑3, Code civil.
Consequently, a buyer cannot pay a notaire or complete a property transaction in cryptocurrencies. Property transactions must be made using Euros, even if the sale price is negotiated in Bitcoin, for example.
Given this legal difficulty, the most practical solution would be for the buyer to sell his cryptocurrencies via an exchange or a broker. The buyer may then transfer the funds (in Euros) required for the purchase to the notaire before signing the final deeds, called “acte authentique”.
There are alternative routes to contractually effect a property transaction using cryptocurrencies.
Payment in Lieu
“Payment in lieu” means that a buyer and a seller agree to settle an obligation in Euros by other means, for example, by the delivery of cryptocurrencies.
The use of a payment in lieu of payment by the delivery of cryptocurrencies would require, first, that the deed of sale of the property provides for payment of the price in Euros; then, secondly, that a payment in lieu deed be drawn up, which would provide for the delivery of cryptocurrencies in lieu of the price in Euros.
Exchange
Another possibility would be to exchange the property for cryptocurrencies. Instead of a deed of sale, this transaction would require a deed of exchange.
Origin of the Funds
Notaires dealing with cryptocurrency transactions will require proof of the origin of the funds. Cryptocurrencies are often treated as a high-risk asset class due to concerns about money laundering, anonymity and unregulated transfers.
This means that any large sums converted from cryptocurrencies to Euros will trigger close scrutiny. To this end, buyers will be required to provide the following details:
- How and when the cryptocurrency assets were acquired (investment, mining, income, etc).
- Purchase records, wallet addresses.
- Proof of legal ownership.
- Name and registration of the cryptocurrency exchange used (e.g. Coinbase, Binance, etc).
- Transaction statements.
- Bank account details showing the funds arriving from the exchange.
- Some notaires may require evidence of tax compliance.
Tax Considerations
The tax implications of each transaction should be considered. Additional complexities may arise when cryptocurrency assets are used to purchase a property.
For example, in property transactions denominated in Euros, buyers are liable to stamp duty and other publicity taxes. In transactions involving cryptocurrencies, buyers should also consider their exposure to capital gains tax on the disposal of their cryptocurrency.
Expert Legal Advice
Our legal expert, François Mouniélou, and his team specialise in taxation, wealth tax, and succession. Do not hesitate to contact him for more information or to book a consultation.
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