Cryptocurrency adoption in South Africa has grown significantly in recent years, and as it becomes a bigger part of our payments ecosystem, the list of where crypto payments are accepted will grow.
Now, affordable residential and student housing specialist, Quorum Holdings, says it is the first in South Africa to accept rental deposits in cryptocurrency, and to allow tenants to "potentially benefit from an increase in value".
While rental deposits are standard practice in South Africa, landlords are expected to ensure the deposit is held in an interest baring account for the duration of the lease agreement. Since deposits can be held for several years, depending on the lease - the risks associated with the price volatility of crypto are still there, but so are "all gains for the tenant", says Saul Mayers, Group Legal of Quorum Holdings.
READ: Knowing your rights and obligations as a tenant can save you money
The South African Revenue Service's (SARS) focus has recently been focusing on crypto profits, subject to Capital Gains Tax, rather than normal tax.
According to Mayers, The crypto rental deposit will be held on South Africa’s largest cryptocurrency exchange, Luno. Tenants will simply transfer the agreed deposit to Quorum Holdings’ Luno business account. Tenants may use bitcoin or ethereum to secure their leases, knowing that their crypto will also be held on a safe, trusted platform.
"This innovative option for rental deposits represents a use case for crypto and a new way of doing business. We are excited to be trialling rental deposits in crypto for our latest development in Johannesburg, Forest Views. Depending on how it works, we will expand to other properties in both Joburg and Cape Town.
With a growing portfolio expected to reach around 3 000 residential units in Johannesburg over the medium term and another 5 000 beds in student accommodation through a subsidiary Urban Circle, the business owns and manages a portfolio of properties.
Marius Reitz, general manager of Luno for Africa says, “Bitcoin was developed as a medium of exchange. As cryptocurrencies become more mainstream, we expect to see increased adoption. Quorum Holdings offering tenants the option to pay their rental deposits in crypto will benefit the tenant.”
“Our typical tenants are young professionals, who are familiar with crypto and may want to use theirs as a deposit instead of the standard deposit practice,” Mayers says.
"Quorum’s latest residential building Forest Views in Bramley (near Melrose Arch) on major transport routes offers brand new rental apartments which have one or two bedrooms, a bathroom and lounge.
"The first two months are rent free and the complex has uncapped wifi, an outdoor gym, kids play area, laundromat, prepaid electricity and exceptional security. The tenant deposit, which is one month rent, may be paid in Rand or cryptocurrency."
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