Every week, Mansion Global poses a tax question to real estate tax attorneys. Here is this week’s question.
Q. I live in Toronto and I hear that nearby Richmond Hill is starting to accept bitcoins for property tax payments. Do you think Toronto will do so soon as well?
A. In July, Richmond Hill became Ontario’s second municipality to approve bitcoin as a payment option for property taxes, according to city officials. A digital currency platform, Coinberry, will process the payments for the city, which is part of the greater Toronto area.
While Richmond Hill is not quite ready to add a “Pay with Bitcoin” button to its online payment options, it should be accepting the currency through its property tax portal by the end of September, according to Coinberry.
In January 2018, Norm Kelly, then a city of Toronto councillor, suggested the city look into the technology. At the time, the City Council asked for more information on accepting bitcoin or cryptocurrency, and while it was considered, the proposal did not go forward, according to Ashley Hammill, a communications adviser for the city of Toronto.
“In order for it to be considered again in the future, another motion would need to be put forward by a council member,” she wrote in an email.
Innisfil was the first municipality in Ontario to accept cryptocurrency. About 45 minutes north of Toronto, Innisfil started accepting bitcoin in April, according to the town’s official website.
Coinberry processes the property tax payments, partly because municipalities are not allowed to hold or accept cryptocurrencies because of their volatility, according to Evan Kuhn, co-founder of the Toronto-based company.
When a resident makes a payment through Coinberry, the company immediately converts it to Canadian dollars and pays the town, Mr. Kuhn said.
“It’s sort of like paying with a credit card,” he explained.
It doesn’t cost homeowners to use the service, and it costs the municipalities far less in processing fees, Mr. Kuhn added.
“A credit card company charges a 3% fee,” he said. “Our fee is .5%, so that’s a lot more beneficial for the municipalities.”
As early adopters of the technology, Richmond Hill and Innisfil are “setting the rails” for the future, Mr. Kuhn said. More people are turning to cryptocurrency, and he expects the number to continue to grow. Companies, especially international tech firms, are already paying workers in cryptocurrencies, he added.
“It’s another step toward digital asset adoption,” Mr. Kuhn said.
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Q. I live in Toronto and I hear that nearby […]