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Buying a House With Cryptocurrency — The Complete Guide
Buying a house with cryptocurrency involves three structures: liquidating to cash (triggers capital gains tax), crypto-secured mortgage (pledges BTC/ETH as collateral, triggers $0 in CGT), and FHFA-compliant conventional mortgage with crypto reserves (June 2025 directive). The capital gains exposure on a $1M crypto gain approaches $238,000 in combined federal taxes if liquidated. The OLH Digital Asset Tax Strategy Framework™ models all three paths before any purchase decision is made.
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Buying a House With Cryptocurrency — The Complete Guide
$0
Capital gains triggered by pledging crypto as mortgage collateral — vs selling, which triggers 20%+3.8%
$500K
IRC §121 primary residence capital gains exclusion for married filers — applies to the home sale, not the crypto
20%
Federal long-term capital gains rate at the top bracket — the baseline tax cost of liquidating appreciated crypto
3.8%
Net Investment Income Tax added to capital gains for high-income filers — combined federal rate: 23.8%
Buying a house with cryptocurrency involves three structures: liquidating to cash (triggers capital gains tax), crypto-secured mortgage (pledges BTC/ETH as collateral, triggers $0 in CGT), and FHFA-compliant conventional mortgage with crypto reserves (June 2025 directive). The capital gains exposure...
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OLH Digital Asset Tax Strategy Framework™
The Own Luxury Homes® pre-purchase analysis that models the capital gains tax cost of liquidating cryptocurrency vs the cost of a crypto-secured mortgage structure — before any purchase decision is made. For buyers with gains above $250,000, the difference between the two approaches typically exceeds $50,000–$200,000 in federal tax alone.
OLH Market Intelligence Analysis, May 2026.
The Three Ways to Buy Real Estate With Crypto
Three structures exist for crypto-funded real estate purchases, each with different tax, cost, and risk profiles. (1) Liquidate and buy cash: sell the crypto, wire fiat to escrow, pay capital gains tax on the sale. Simple, but the most expensive path for holders with significant unrealised gains. (2) Crypto-secured mortgage: pledge BTC or ETH as collateral for a mortgage loan. The crypto is not sold — it is held by the lender's custodian (BitGo, Coinbase Custody) as collateral for the loan. No taxable event at pledging. The lender issues a U.S. dollar mortgage; the seller receives dollars. At loan payoff, the crypto is returned. Milo.io is the primary U.S. lender offering this structure. (3) FHFA conventional with crypto reserves: the June 2025 FHFA directive allows Fannie Mae and Freddie Mac to count documented crypto holdings as mortgage reserves (with a 50–60% volatility haircut) without requiring liquidation. This allows crypto holders to strengthen a conventional mortgage application without selling.
The Capital Gains Calculation
The tax cost of liquidating crypto to buy real estate: long-term capital gains rate (assets held 1+ year) at the highest federal bracket = 20%. Net Investment Income Tax (NIIT) = 3.8%. Combined federal rate = 23.8%. State taxes vary. On a $1,000,000 gain: federal tax = $238,000. On a $500,000 gain: federal tax = $119,000. On a $2,000,000 gain: federal tax = $476,000. These are taxes paid before a single dollar reaches the real estate purchase. The crypto-secured mortgage structure produces $0 in capital gains because the crypto is pledged, not sold. The gain remains unrealised. If Bitcoin subsequently appreciates after the pledge, the holder keeps that appreciation.
Which Structure Is Right for Which Buyer
Liquidation is the right structure when: the buyer has relatively small unrealised gains (below $100,000), the purchase is not luxury tier (where crypto-backed products may have loan amount limits), or the buyer wants maximum simplicity and no ongoing crypto collateral obligation. Crypto-secured mortgage is right when: unrealised gains are large ($300,000+), the buyer intends to hold the crypto long-term, and the buyer is comfortable with overcollateralisation requirements and the risk of a margin call if crypto prices decline significantly. FHFA conventional with crypto reserves is right when: the buyer qualifies conventionally on income and credit, wants to preserve the crypto position, and the crypto is held on a U.S.-regulated exchange. The OLH Digital Asset Tax Strategy Framework™ models all three for the buyer's specific gain, price tier, and risk tolerance.
The Lender Landscape for Crypto Real Estate
The primary lenders offering crypto-real-estate products as of 2026: Milo.io — U.S. crypto-secured mortgage lender; pledges BTC/ETH as collateral; up to 100% financing; 1:1 collateral-to-loan ratio required; interest-only structure available. RealOpen — converts crypto to fiat at closing, enabling the buyer to purchase without the seller accepting crypto directly. Better Home & Finance + Coinbase — the first Fannie-backed crypto mortgage product, launched March 2026; uses FHFA reserve credit framework. Ledn, Figure Technologies — additional crypto-backed lending platforms. OLH is not a lender and does not recommend specific lenders — the verified specialist introduction coordinates with whichever lender the buyer has already selected or is evaluating.
“The question I hear most from crypto holders is whether they have to sell the Bitcoin to buy the house. The answer is no — and the people who don’t know that are paying $200,000 or $300,000 in capital gains taxes they didn’t need to trigger. Crypto-secured mortgage structures let you pledge the Bitcoin as collateral, keep the position intact, and buy the property. The tax event doesn’t exist until you actually sell the crypto, which you haven’t done. Our job is to make sure the specialist we introduce understands this structure well enough to coordinate with the lender who offers it — because a specialist who doesn’t understand it will push the buyer toward liquidation by default.”
— Ryan Brown, Principal Broker & CEO
Own Luxury Homes® · FL BK3626873 | NAR 624500541 | USPTO 7968024
407-900-7030 · ryan@ownluxuryhomes.com
Related Crypto Real Estate Guides
- Buying a House With Cryptocurrency
- Crypto-Backed Mortgage
- Capital Gains Tax — Crypto Real Estate
- Crypto Source of Funds Documentation
- OLH Crypto Buyer Specialist Verification
FAQ
Do I have to sell my Bitcoin to buy a house?
No. Crypto-secured mortgage structures (Milo model) allow you to pledge Bitcoin or Ethereum as collateral for a mortgage loan without selling the crypto. The lender holds the crypto in institutional custody during the loan term and releases it when the loan is repaid. No sale = no capital gains event.
What is the capital gains tax on using crypto to buy real estate?
If you sell crypto to fund a real estate purchase, you owe capital gains tax on any gain above your cost basis. Long-term gains (assets held 1+ year) are taxed at 0%, 15%, or 20% federally (plus 3.8% NIIT for high-income filers), plus state taxes. Pledging crypto as collateral for a mortgage is not a taxable sale — the tax event is deferred until the crypto is actually sold.
Can I use Ethereum instead of Bitcoin to buy real estate?
Yes. Milo accepts both Bitcoin and Ethereum as collateral. Better+Coinbase's FHFA product accepts BTC and USDC. The specific accepted cryptocurrencies and their collateral ratios vary by lender. Other cryptocurrencies (Solana, Cardano, etc.) are generally not accepted as collateral by institutional real estate lenders as of 2026.
What happens to my crypto if I use it as mortgage collateral?
Your crypto is held in institutional custody (BitGo or Coinbase Custody, depending on the lender) for the duration of the loan. You retain ownership but cannot sell or transfer it while it is pledged. If the value of your crypto declines significantly below the required collateral ratio (typically 1:1 for Milo), you may receive a margin call requiring you to add more collateral or reduce the loan balance. When the mortgage is paid off, the crypto is returned to you.
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"The introduction Own Luxury Homes® makes is to a specialist with documented closing history in your specific market — not the county, not the metro, the submarket you're actually selling or buying in. That's the standard we verify before your name goes anywhere."
— Ryan Brown, Principal Broker & CEO, Own Luxury Homes® (FL License BK3626873)