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Using cryptocurrency to buy a home in Canada: 2025

August 20, 2025 Calgary mortgage

We have been getting lots of customers asking this question with the recent rise of crypto values.

Below are ALL the details I have collected: from tax implications to AML compliance, what buyers need to know before turning digital gold into a home.

 

I have bitcoins for my down payment on my home!

Many Canadians now have significant Bitcoin, Ethereum or other crypto and want to use that for the down payment in a home purchase.

However, turning crypto into a viable down payment, or leveraging it as collateral, isn’t nearly as simple as it sounds.

Mortgage Mark Herman, Best Calgary Alberta mortgage broker for crypto mortgage brokers and first time home buyers

 

First, what is a crypto mortgage?

Crypto mortgages typically fall into one of two categories:

  1. Crypto-funded mortgage – the way that actually works: You sell your crypto, convert it to Canadian dollars, and use those funds as your down payment. This way also comes with some with tax consequences on the sale – but hey, your crypto may be up 15000%, and the capital gains tax is only on the amount you cash in, and it is 50% of the profit. SEE THE MATH ON THIS at the bottom.

 

  1. Crypto-backed mortgage – what everyone is asking for: You pledge your crypto as collateral without selling it. This probably helps avoid triggering capital gains tax, but requires a lender capable of assessing and managing that risk. We have not found this route to work due to enormous anti-money-laundering laws that realtors, banks, and brokers have to follow.

 

 Version 1: Using your crypto as a mortgage down payment

This is the way that works, and the easiest way to use your crypto is to cash it in/ convert to cash, and move the funds into a Canadian bank account to “seed” or “season” for 90 days.

  • This is not really needed with most other assets and we have tried so many ways to get the lenders to accept the funds held in a crypto trading platform (like Binance, NDAX or similar, but they always sound the alarm right here, send the file to “the risk desk” and then it is a battle the entire rest of the way.

Why do I need to cash it in and leave it in the bank for 90 days? It’s AML!

The “kink in the system” is that we have to show a 90 day history for the source of all down payment funds for AML – anti money laundering law compliance. Normally banks are fine with funds sitting in Wealth simple or any trading account but NOT for crypto.  After getting “all the NO’s” we found this is the way to go.

 

What about – buying with cash and refinancing/ getting a mortgage on it later?

  • When you do this in the 1st year, the banks still need to re-verify the original down payment for the original purchase so this will still be tough to do.
  • And refinance rates are higher than purchase rates, and you would then also be re-registering the mortgage and registration has shot up to about $2000, from $200 over the last year in Alberta.

 

Version 2: which we have NOT found to work – is leveraging your crypto and pledging it without a sale.

If you want to access liquidity without selling your crypto, a crypto-backed loan is another option and here is how it is supposed to work to avoid the capital gains event.

  • If this has too many moving parts, then selling your crypto and putting it into the bank for 90 days is the way to go.
  1. Deposit crypto as collateral

You transfer your crypto to a platform, where it is held in a secure wallet or smart contract. Platforms such as YouHodler and Ledn support this model.

  1. Loan-to-value (LTV) ratio

You can typically borrow between 30% and 70% of your crypto’s value. For example, pledging $10,000 worth of Bitcoin may get you a $5,000 loan.

  1. Disbursement

Loans are issued in fiat (e.g., CAD, USD) or stablecoins. Most do not require a credit check and can be approved quickly.

  1. Repayment and interest

Terms vary. Some platforms offer flexible repayment options; others require fixed schedules. Once the loan and interest are repaid, your crypto is returned.

  1. Liquidation risk

If the value of your crypto drops and your LTV exceeds a certain threshold, you may be required to add collateral. Otherwise, your crypto may be liquidated.

  1. No taxable event

Since you are borrowing, not selling, there is no capital gains tax event. This can be beneficial from a tax-planning perspective.

 

WHAT ALSO WORKS …

A simpler, safer alternative: using crypto ETFs for mortgage planning

For a more straightforward path, consider using crypto ETFs instead of direct crypto holdings. ETFs allow you to gain exposure to digital assets without managing wallets, keys, or exchange accounts.

Held through mainstream brokerages, including in TFSAs and RRSPs, crypto ETFs are easier for lenders to understand and verify, avoiding the friction that often comes with direct crypto assets.

Leading crypto ETFs in Canada

These are some of the top crypto ETFs available to Canadian investors:

  • BTCC (Purpose Bitcoin ETF): The first Canadian Bitcoin ETF, with CAD and USD options and a carbon-neutral version
  • BTCQ (3iQ CoinShares Bitcoin ETF): Physically-backed BTC, held in cold storage
  • FBTC (Fidelity Advantage Bitcoin ETF): Designed for registered accounts
  • ETHH and ETHX (Purpose and CI Galaxy Ethereum ETFs): Offer direct ETH exposure, with or without staking
  • IBIT (iShares Bitcoin ETF): Managed by BlackRock, a major global asset manager

Several ETFs now include additional exposure to AI stocks or newer crypto assets like Solana, expanding diversification options within this space.

Naturally, this is our experience and this should NOT be taken as investment advice. Ask your licensed financial adviser for their opinion before proceeding please.

 

SUMMARY

Can I use crypto as a down payment?

Yes, but there are strict conditions:

  • You must convert the crypto to Canadian dollars
  • Maintain a documented paper trail of the sale and deposit
  • Be prepared to explain the origin of your funds for AML compliance

Many lenders will still be hesitant. Working with a mortgage broker familiar with these requirements and a lender that understands crypto is essential.

 

Is it legal and safe in Canada?

Yes, but regulatory guidance is evolving.

Lenders must comply with OSFI and FINTRAC standards, which include thorough AML and source-of-funds verification.

OSFI is expected to implement new digital asset rules in 2025, which may influence how Canadian financial institutions handle crypto-collateralized products.

Key risks to consider

  • Price volatility: A drop in crypto value can lead to margin calls or liquidation
  • Lender restrictions: Many banks still reject crypto-related funds
  • Platform risk: Some crypto lenders have gone bankrupt
  • No deposit insurance: Crypto held as collateral is not insured by CDIC
  • Compliance complexity: Documentation, tax reporting, and regulatory scrutiny can be significant

 

How does CRA treat crypto in mortgage scenarios?

Under CRA guidelines, cryptocurrency is treated as a commodity.

Selling it to fund a down payment is a taxable event, and any capital gains must be reported.

However, borrowing against your crypto is not a disposition and does not trigger capital gains taxes, at least under current rules. Regardless, thorough documentation is critical.

 

Crypto-backed mortgages and crypto-collateralized loans offer new possibilities, but they’re not ideal for everyone. If you’re a crypto holder considering homeownership in Canada:

  • Convert your crypto to Canadian dollars early, and let it seed for at least 90 days
  • Alternatively, accumulate your crypto wealth in Exchange Traded Funds
  • Document everything: sales, transfers, deposits, and sources of funds
  • Work with professionals who understand both traditional lending and crypto
  • Be ready to meet rigorous compliance and verification requirements

 

Canada’s mortgage landscape is still catching up to the digital asset world. Planning ahead is key to avoiding delays or declined applications.

Further reading and sources

Taxable Capital Gains on Bitcoin in Canada

When you dispose of Bitcoin (for example, selling or “cashing in”), the Canada Revenue Agency treats it as a commodity. If your transaction is considered a capital disposition, only 50% of the gain is taxable.

How It’s Calculated

  • Adjusted Cost Base (ACB): The original purchase price (in CAD), plus any fees.
  • Proceeds of Disposition: Fair market value (in CAD) on the date you sell.
  • Capital Gain:

Gain=Proceeds−ACB−Disposal Fees\text{Gain} = \text{Proceeds} – \text{ACB} – \text{Disposal Fees}

  • Taxable Capital Gain:

For example, if you bought Bitcoin for $10,000 CAD and later sold it for $15,000 CAD (with $100 fees), your gain is $15,000 – $10,000 – $100 = $4,900. You report half—$2,450—as taxable income.

 Tax Payable

  • The $2,450 is added to your total income for the year.
  • The actual tax you owe equals your marginal tax rate multiplied by the taxable gain.

Municipal, provincial and federal rates all apply, so total tax varies by province and your income bracket.

 Reporting & Recordkeeping

  • Report on Schedule 3 (Capital Gains) of your T1 return.
  • Keep detailed records: transaction dates, CAD valuations, fees and wallet addresses.
  • Use reliable crypto-tax software or a professional to ensure accuracy.

 Special Considerations

  • If CRA deems your activity a business (frequent trading, mining, or providing services), 100% of profits may be taxed as business income.
  • Capital losses can offset gains—claim them on Schedule 3 to reduce your taxable gain.

 

Beyond capital gains, remember that receiving Bitcoin as income (mining rewards, staking, payments) is taxed at 100% of its fair market value on receipt. Always consult a tax professional for personalized advice