TOKENIZED REAL ESTATE TRADING

NFT stands for Non-fungible token. Basically, “Non-fungible” means that it’s unique and cannot be replaced with something else. One example would be a US Dollar which is indeed fungible, if you trade someone your dollar for theirs, it’s worth exactly the same amount. A one-of-a-kind trading card or artwork would be non-fungible. If you traded it with someone for a different card or artwork, you’d have something totally different and probably with a very different monetary or market value.

Like the trading card or artwork, real estate is also unique and non-fungible. Each property is a different thing that can be bought and sold. For this reason an NFT can be created that acts as a certificate of ownership for the property, much the same way that a stock certificate is legal proof that you own certain stock.

A Deed NFT is your official certificate of ownership of your property. It can be held in your crypto wallet and can be traded on a blockchain - thus providing an instant and easy way to trade real estate assets. It both tells buyers that you are "clear-to-close" and gives them an easy way to buy immediately.

Like all NFTs, a Deed NFT contains detailed data that describes the asset that the NFT represents, in this case an actual property. When you explore the metadata of a Deed NFT, you’ll see that it contains a number of documents that describe your ownership of the home, legally and in the real world. These documents may be a digital copy of the escrituras, the fideicomiso as well as other documents that show the legal size, location, and layout of the site as issued by a local municipality.

A Deed NFT is exactly the same as a paper deed in that is proves your ownership of a property. When you hold the property via a Deed NFT, you will not receive a physical copy of the deed. You can still request an original physical copy of the deed, but it will not be sent to you by default.

Your home has value primarily becuase it is a physical asset in the real world. This value is not impacted by the Deed NFT any more than having your ownership documents stored online in PDF form. That said, when buyers know how easy it is it buy your property using an NFT, perhaps they will be more inclined to make an offer.

"Buying a home using a Deed NFT is instant and simple. When you are ready to sell your property to a new buyer, you’ll simply exchange of your Deed NFT for the price you agree on with a buyer. Payment can be cryptocurrency, USD or MXN. It is up to you and the new buyer. Once the trade is done. your property is sold.

To ensure that it all runs smoothly, you can perform the exchange using Plano's escrow service. Using this tool, you deposit your Deed NFT and the buyer deposits their funds. Once both are received and correct, Plano performs the trade immediately and your property is sold.

If you prefer to use a different marketplace to exchange your asset, or would perhaps like to use a trusted intermediary to assist with the transaction in place of Plano, you can. This could include the broker who brokered the deal."

Selling a home with a Deed NFT is the reverse process of buying a property with a Deed NFT. See the previous question for information about how to do that safely.

Converting your Deed NFT back a traditional ownership arrangement is called "burning" your NFT. There are two situations where this might arise. The first is if you would like to sell the home to a buyer who does not want to own the property using an NFT. You can do that easily as this is simply a case of directing the LLC to sell the asset to the buyer.

The second case is arises simply because you want to do it. In this case the process is the same as the above. The LLC will be directed to transfer ownership of the asset directly to you. The only difference to an actual sale is that no money will be involved in the transaction.

No matter how you want to do it, you can burn your Deed NFT from within the Plano Settlement application.

When the NFT is sold, the ownership documents stored within the NFT are automatically updated to reflect the details of the new owner. This is done automatically via a smart contract that is triggered whenever the NFT is sold. In this way, no matter who owns the NFT, the documents that are contained within the NFT prove ownership of the property.

LLC stands for Limited Liability Company, and is registered in the United States of America. The term Single Member means that the company is owned by a single person which will be you. Plano will create an LLC in your name automatically as part of your property purchase.

It is easy to create a Deed NFT when you are ready to sell your house and before you find a buyer. When you are creating your property within the Plano Settlement app, you will see an option that allows you to "tokenize your home using an NFT". Click that option and Plano will guild you through the process and take care of all the details including the creation of the LLC and the assignment of 100% membership rights to you. It’s easy and seamless within the app.

Plano currently operates on the Ethereum blockchain.

Plano will handle all this for you. Plano will create the LLC on your behalf automatically as part of the Deed NFT creation. On an ongoing basis, management will cost you nothing and it also won’t take any time.

The reason this is so straightforward and easy is that, while the LLC will own the property, you will not be using the LLC to operate the asset. As such there will be no financial activities to report on the tax return of the LLC. In fact, because the LLC is a "single-member", all activities from the operation of the home are considered "pass-through" and will be reported on your personal tax return in the same way they would be if you owned the property directly.

When you tokenize your property in preparation for sale, the process is completed in a way that does not constitute a legal sale in Mexico. As such, at the time of tokenization, there is no capital gains tax due.

Converting your Deed NFT back a traditional ownership arrangement is called "burning" your NFT. There are two situations where this might arise. The first is if you would like to sell the home to a buyer who does not want to own the property using an NFT. You can do that easily as this is simply a case of directing the LLC to sell the asset to the buyer.

The second case is arises simply because you want to do it. In this case the process is the same as the above. The LLC will be directed to transfer ownership of the asset directly to you. The only difference to an actual sale is that no money will be involved in the transaction.

No matter how you want to do it, you can burn your Deed NFT from within the Plano Settlement application.

If you choose to self custody and lose keys to your wallet, you are still safe. Plano can re-mint a new Deed NFT in cases where owners lose access to their wallet. This action will invalidate the original Deed NFT. Additionally, you can custody your Deed NFT with a vault provider to keep it safe.

Buying a home using a Deed NFT is instant and simple. When you find the home you want, you’ll simply pay the price agreed and the seller will send you the Deed NFT. Payment can be cryptocurrency, USD or MXN. It is up to you and the new buyer. Once you receive the Deed NFT. your property is legally yours and the transaction is complete.

To ensure that it all runs smoothly, you can perform the exchange using Plano's escrow service. Using this tool, you deposit your Deed NFT and the buyer deposits their funds. Once both are received and correct, Plano performs the trade immediately and your property is sold.

If you prefer to use a different marketplace to exchange your asset, or would perhaps like to use a trusted intermediary to assist with the transaction in place of Plano, you can. This could include a broker who brokered the deal.

It is easy to create a Deed NFT as part of the purchase process. Within the Plano Closing settlement app, you will be asked how you wish to own the home. Elect ownership via a Deed NFT and one will be created for you as part of the sale. Plano will take care of all the details including the creation of the LLC and the assignment of 100% membership rights to you. It’s easy and seamless within the app.

Buying is free for buyers.

Using a Deed NFT to buy a property is different from buying a house the traditional way. The reason for this that the the sale of a property using a Deed NFT is in reality the sale of an LLC in the United States that owns the property being sold. As this does not constitue a sale in Mexico, you will not be responsible for the payment of an aquisition tax.

The second case is arises simply because you want to do it. In this case the process is the same as the above. The LLC will be directed to transfer ownership of the asset directly to you. The only difference to an actual sale is that no money will be involved in the transaction.

No matter how you want to do it, you can burn your Deed NFT from within the Plano Settlement application.

Closing settlement using a Deed NFT is instant and simple. When you are ready to sell your property to a new buyer, you’ll simply exchange of your Deed NFT for the price you agree on with a buyer. Payment can be cryptocurrency, USD or MXN. It is up to you and the new buyer. Once the trade is done. your property is sold.

To ensure that it all runs smoothly, you can perform the exchange using Plano's escrow service. Using this tool, you deposit your Deed NFT and the buyer deposits their funds. Once both are received and correct, Plano performs the trade immediately and your property is sold.

If you prefer to use a different marketplace to exchange your asset, or would perhaps like to use a trusted intermediary to assist with the transaction in place of Plano, you can. This could include the broker who brokered the deal.

When you have a deed NFT for your home, the sale and legal transfer of your home is instant. This is possible because the transfer of the Deed NFT triggers a legal change in ownership to the LLC that owns the property.

Costs to sell your Deed NFT are outlined on our Pricing Page.

While you can close the deal and transfer your Deed NFT immediately, you don't have to. As part of the deal, you and the buyer may agree to a delay to give you time to pack or for them to move in. It is no problem to specifiy a date in the future when the close will happen. Plano Settlement will lock everything in place until the agreed day, including a depost from the buyer, and trigger the close at the right time.

When you sell a property using a Deed NFT that you have created, your capital gains tax obligations will be identical to a sale where you are not using a Deed NFT. The rules and regulations of Mexico related to gains on the sale of real estate will be used to determine what you owe. Plano Settlement includes a calculator within the application where you can figure out exactly what you owe ahead of time. The taxes you owe and when you owe them will be governed as it you were selling your property without an NFT. See here.

If you are selling a property using a Deed NFT that was created prior to your purchase of the property, your capital gains tax obligations will be different. The reason for this that the the sale of a property using a Deed NFT is in reality the sale of an LLC in the United States that owns the property being sold. In this case, your capital gains tax obligations will be based on the sale of the LLC as well as your country of residence. This can be useful for people who don't live in Mexico and would rather deal with their taxes in the country where they live. Speak with your accountant or tax advisor in regards to your situation.