--- title: Tokenization of real estate url: "https://www.unknowngravity.com/en/servicios/tokenizacion-de-inmuebles" site: Unknown Gravity published: "2024-11-13T17:41:54+00:00" modified: "2026-07-15T10:51:34+00:00" language: en-US description: "Does your company or developer want to tokenize a property in Spain legally and securely? At Unknown Gravity we provide the technology, structure and compliance to make it happen." section: "Home > Tokenization of real estate" --- # Tokenization of real estate > Real estate tokenization means representing ownership or economic rights over a building or development as tokens, so they can be divided into fractions. Depending on how it is structured, the token may be a financial instrument subject to the LMVSI and MiFID II. Unknown Gravity structures the transaction. FRACTIONALIZATION OF ECONOMIC RIGHTS VERIFIED LEGAL STRUCTURE TRACEABLE TRANSFERS [Book a meeting](/en/meeting) Real estate tokenization means representing ownership or economic rights over a building or development as tokens, so they can be divided into fractions. Depending on how it is structured, the token may be a financial instrument subject to the LMVSI and MiFID II. Unknown Gravity structures the transaction. Does your company or developer want to **tokenize a property in Spain with a solid legal structure**? At **Unknown Gravity** we provide the technology, structure and compliance to make it happen. **Real estate tokenization** represents rights over a property through **digital tokens on blockchain**, enabling fractional participation, potential liquidity where a market exists to trade them, and automated management of economic rights. If you first want to understand **what it is and how it works** in detail, we explain it in our [guide to real estate tokenization](/en/articulos/tokenizacion-de-inmuebles). On this page we focus on **how we do it with you**: a technical, legal and strategic approach aligned with the Spanish and European market. ## 01 / What is real estate tokenization? Real estate tokenization is the process of representing the economic rights over a property in digital tokens. These tokens represent economic rights over the property, in whole or in part, and their transfer takes place through the channels allowed by the legal structure of the issuance, facilitating access to real estate investments through a platform with blockchain technology. In addition, it allows the economic rights over the property to be fractionalized and the minimum entry amount to be lowered. Ownership of the property is not fractionalized by the token: it still requires contract and delivery and, for real estate, a public deed and registration at the Land Registry (Arts. 609 and 1280.1 of the Spanish Civil Code, BOE-A-1889-4763). For developers, this solution offers an agile way to attract customers and to structure fundraising; any later liquidity depends on a market existing where the tokens can be traded. ## How does real estate tokenization work? What can be tokenized? Tokenization represents the economic rights over a property as tokens on the blockchain, not the property itself. This process widens access to investment and allows participation in the real estate market in a more flexible and traceable way, within the offering regime that applies to each issuance (Art. 35 LMVSI, BOE-A-2023-7053). Different investor profiles can participate with smaller amounts, always within the requirements set by each issuance. At Unknown Gravity we handle real estate tokenization end to end: we provide the technology and the structuring of the project, and we work with legal experts so that the process is sound, documented and compliant with regulation. Our approach covers all the key stages of the process, aimed at an effective implementation aligned with the applicable regulation: - **Business model evaluation:** Before starting tokenization, it is essential to analyze and define the business model. This includes identifying objectives, market opportunities and benefits for investors and owners. - **Creation and structuring of tokens**: We design and prepare the requirements for the creation of the smart contracts that will govern the tokens.\ \ This step includes: - Selection of the most suitable blockchain network for the project. - Clear definition of contract terms, such as investor rights and obligations, distribution deadlines, payment terms and type of token. - Planning the token sale and distribution process - Preparing the issuance document and, where the offer to the public does not fall within an exemption, the prospectus; plus the design of the token economy (tokenomics). The white paper is the MiCA document and does not apply to a securities issuance (Arts. 7 and 35 LMVSI, BOE-A-2023-7053). - **Verification and validation**: The tokenization of real estate must comply with regulations. We work with legal experts to review the legal classification of the tokens and the securities rules that apply to each issuance. - **Issuance or distribution**: Once the smart contracts are created, the tokens are issued on the selected blockchain network, with a transparent and traceable record of the operation. - **Administration**: It is crucial to establish a system to manage the token and keep investors informed with regular updates. Compliance with the applicable rules, including anti-money-laundering and counter-terrorist-financing obligations, is part of the project from day one. ## What types of properties can be tokenized? Several types of properties can be tokenized, such as: - **Residential**: Individual homes and apartment buildings. - **Commercial**: Offices, retail units and shopping centers. - **Land**: Rural or urban properties. - **Construction**: Projects under development with great potential. It starts with the valuation of the property and the definition of the legal structure; the digital token is then created, representing the economic or corporate rights attached to the property, not a fraction of its ownership (Arts. 609 and 1280.1 of the Spanish Civil Code, BOE-A-1889-4763). These tokens can then be transferred between investors through the channels allowed by the legal structure of the issuance, subject to the restrictions set by securities regulation. ## 02 / Steps to tokenize a property in Spain The tokenization of a property **is not just a technological process**, but a combination of **legal analysis, corporate structuring and blockchain development**. Here are the essential steps: ### 1. Property valuation and legal structure The first step consists of: - appraise the property professionally - define the legal structure (special purpose vehicle, economic rights, shares) - Determine what exactly is being tokenized This point is critical so that the token **represents an identified and enforceable right**. ### 2. Token design and blockchain choice It is defined as: - What type of token is issued (security token) - associated economic rights - transmission rules and restrictions - most suitable blockchain network (Ethereum, L2, etc.) The technology **must adapt to the legal framework**, not the other way around. ### 3. Development and auditing of the smart contract In this phase, the following are developed: - Token smart contracts - rent-sharing rules - control and governance mechanisms Technical auditing is key to detecting and reducing vulnerabilities and design errors. ### 4. Prospectus and regulatory compliance If the issuance is offered openly to the public: - a prospectus approved by the CNMV is required, unless an exemption applies. Since 5 June 2026 the general exemption in Regulation (EU) 2017/1129 covers offers below twelve million euros aggregated across the Union over twelve months, with no EU passport, and Member States may lower that threshold to five million (Art. 3.2a). Spanish Law 6/2023 still sets eight million in Art. 35.2.b, so the applicable threshold should be confirmed with the CNMV before structuring the offer - if, even under that exemption, the offer is advertised to the general public, an entity authorized to provide investment services must be involved - the issuance itself does not need prior authorization from the CNMV (Arts. 34(1), 35 and 36(1) LMVSI, BOE-A-2023-7053) This step is essential for serious projects in Spain. ### 5. Issuance and distribution of tokens Finally: - Tokens are issued - are distributed to investors - Management mechanisms are activated From here, the property enters a **tokenized management phase**, not speculative. ## 03 / Regulation and legal compliance in the tokenization of real estate in Spain Real estate tokenization **does not operate outside the legal system**, but inside it. Ignoring this point is one of the main mistakes of failed projects. ### MiCA and real estate tokenization The European Regulation **MiCA** establishes rules for certain cryptoassets and service providers. **MiCA does not apply to real estate security tokens**: the Regulation excludes from its scope crypto-assets that qualify as financial instruments, which are governed by MiFID II and by the LMVSI. For that issuance there is no crypto-asset white paper and no MiCA notification to prepare. MiCA does come into play when the project also issues a crypto-asset that is not a financial instrument: a utility token giving access to a service in the building, for instance. They are alternative regimes, not cumulative ones (Art. 2(4)(a) of Regulation (EU) 2023/1114, CELEX 32023R1114). ### CNMV and Investment Services Firms (ESI) When tokens represent **economic rights to a property**, they can be considered financial instruments: to qualify, the right must be capable, by its own legal configuration and transfer regime, of generalized and impersonal trading on a financial market (Art. 2(1)(a) LMVSI, BOE-A-2023-7053). In these cases: - the supervision of the CNMV comes into play - authorized ESI can intervene - investor protection obligations apply ### Law 6/2023 (LMVSI) on Securities Markets **The LMVSI** adapts the Spanish framework to the reality of digital assets and reinforces: - legal security - investor protection - coherence with European regulations In addition, it allows negotiable securities to be represented using distributed ledger technology and entrusts their registration to an **ERIR** (the entity responsible for registration and record-keeping), appointed in the issuance document and which must be one of the entities authorized to provide safekeeping and administration of financial instruments (Arts. 8(4) and 126(a) LMVSI, BOE-A-2023-7053). It is a key element in real estate tokenization projects in Spain. ### Notary and Land Registry Tokenization **does not replace**: - The notarial deeds - the land registry These elements remain essential to the **legal validity of the underlying asset**. The blockchain acts as **technological layer**, not as a replacement for the legal system. ## 04 / Real estate tokenization case studies Tokenization is an effective tool for internationalizing and widening access to investment, with potential liquidity where a market exists to trade the tokens, in projects such as: - **Hotel St. Regis in Aspen, Colorado (USA)**: One of the first examples of large scale real estate tokenization. Tokens backed by shares in the company that owns the hotel were issued: what global investors acquired were shares in that company, not a share of the property itself (Art. 609 of the Spanish Civil Code) - **Residential housing in the USA**: models where the token represents shares in a special purpose vehicle that owns the property. - **Transactions in Spain and Latin America**: equivalent structures, with a special purpose vehicle and rental distribution governed by contract. These examples illustrate market structures. They are neither recommendations nor offers of investment. ## 05 / Benefits of tokenizing real estate - **Greater potential liquidity**: Fractionalization makes it easier for investors to enter and exit through the channels allowed by each issuance; trading on secondary markets depends on the legal structure and the applicable regulation.\ - **Democratized access**: Investors from all over the world can participate without the need for large amounts of money as a property would need in a traditional market, making it easier for those looking to invest smaller amounts or diversify their portfolio. - **Lower recurring costs**: automating rent distribution, the register of holders and transfer controls cuts administrative work month after month. Notary, Land Registry, ERIR and compliance costs do not disappear, and they must be budgeted from the outset (Art. 8(4) LMVSI, BOE-A-2023-7053). - **Traceable operations**: Every transaction and movement related to tokens is permanently recorded on the blockchain. That leaves a detailed and accessible history of the operations on the token; title to the property itself is evidenced at the Land Registry (Art. 3 of the Spanish Mortgage Act, BOE-A-1946-2453). ## How do we approach security in real estate tokenization? At Unknown Gravity security is a priority and we pay specific attention to every stage of the process. No control removes risk entirely: the aim is to contain it and document it.\ ### [Smart contract auditing](/en/servicios/blockchain-security-audits) After the structuring and [Development of smart contracts](/en/servicios/company-development-smart-contracts), we conduct a comprehensive audit to identify and correct potential errors or vulnerabilities. These contracts represent the fundamental rules of the system, and our goal is to reduce the risk of errors and vulnerabilities as far as possible.\ ### Functional and stress tests Before launching the system, we carried out comprehensive tests simulating various scenarios, from the most common to the most extreme. This lets us detect failures before launch and contain the risk under adverse conditions, although no test removes it entirely.\ ### Regulatory Compliance We review that the process is aligned with the applicable legal rules, both local and international, at every stage of the project. We work closely with legal experts to review every detail and align the system with the rules that apply to each issuance.\ Our commitment to security not only protects the business, but also builds trust in our customers and investors. ## Start your tokenization project with Unknown Gravity Real estate tokenization is revolutionizing the market, and we want to help you be part of this transformation. **We have a group of experts who combine technology, creativity and security in projects that don't just leave a mark... they make history!** So, contact us and make a difference in your real estate tokenization project. The tokenization of real estate does not consist of “digitizing a flat”, but of **designing a coherent legal, technical and economic structure**, prepared to build long-term trust. This content is for information purposes. It is not legal, tax or investment advice and does not replace consulting a professional. Regulation on tokenization and crypto-assets keeps evolving: check the current version of the rules cited on BOE and EUR-Lex. FAQ ## Frequently asked questions **Is the tokenization of real estate legal in Spain?** Yes, **the tokenization of real estate is legal in Spain**, provided that it is properly structured from a legal point of view.\ Blockchain does not replace the traditional legal system: the property must remain registered in the Land Registry and formalized before a notary, while the token acts as **digital representation of certain economic or participatory rights**. Depending on the model, the project may be subject to oversight by **CNMV**, so prior legal analysis is essential. **What exactly is tokenized: the property or the rights to it?** In practice, **the property itself is not tokenized**, but **economic or corporate rights related to the property**.\ This can be done, for example, by: - shares in a special purpose vehicle - rights to rents or profits - structured financial instruments The token **does not create the right**, it only represents it technologically. That's why there must be a clear legal basis outside the blockchain. **Is real estate tokenization regulated by MiCA?** No. The European Regulation **MiCA** **does not apply to real estate security tokens** when these are in the nature of a financial instrument: it excludes from its scope crypto-assets that qualify as financial instruments. In these cases, the following usually applies: - Securities market regulations - **MiFID II** - Spanish legislation such as the LMVSI MiCA may apply to other tokens of the same project that are not financial instruments, such as a utility token. They are alternative regimes, not cumulative ones (Art. 2(4)(a) of Regulation (EU) 2023/1114). This page is informative. It is not legal, tax or investment advice, and it does not replace a case-by-case review. The rules cited change: check the current version on [BOE](https://www.boe.es) and [EUR-Lex](https://eur-lex.europa.eu). 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