Real estate DFAs: square metres, debt or a promise — what are you actually buying?

A real estate digital financial asset (DFA) is neither a share in a flat nor an entry in the Rosreestr property register. What you buy is a digital claim against a specific issuer, issued in the information system of an operator listed in the Bank of Russia register under Federal Law No. 259-FZ (2020). The property is the source of the money used to settle that claim, and sometimes the collateral behind it, but it is not your asset. This leads to the key practical distinction: the quality of such an issue depends not on the price per square metre in the neighbourhood but on the issuer's ability to pay and on what exactly the issue decision says.

What stands behind the record legally

Article 1 of Law No. 259-FZ defines DFAs as digital rights that include monetary claims, the ability to exercise rights attached to equity securities, rights to participate in the capital of a non-public joint-stock company, and the right to demand the transfer of equity securities. Rights in rem — rights to the property itself — are not on that list. That is why a "DFA on a square metre" is in most cases structured as a monetary claim whose size is linked to an index or to a valuation of the floor space, rather than as a right to take ownership of the space. If what you are being offered really is the transfer of a physical asset, that is a different structure altogether: a utility digital right on an investment platform, governed by a different law, involving a different intermediary and giving you a different set of rights.

The second thing to check before buying is who the issuer is. Quite often it is not the developer itself but a special-purpose company with no track record, no operating revenue and no assets other than its rights in a single project. Such a company does not publish financial statements in the way investors in shares and bonds are used to: compare it with how issuers disclose information on the reports page, and the gap in available information becomes obvious.

The structures you will come across

The first is a debt structure. In essence, it is a loan to the developer or a related entity, with a fixed coupon and a maturity date. The closest analogue is a high-yield bond, only without a prospectus, without an exchange listing and without a credit rating. The honest comparison for such an issue is not the housing market but yields on the bond market: if there is no premium over paper of comparable risk, the structure does not pay for its additional risks.

The second is a rental structure. Payments are tied to the rental income from the property. The key question here is who legally owns that cash flow: does it go to the issuer directly, or does it pass through a chain of entities, each of which may take its own cut?

The third is an index-linked, "per square metre" structure. The settlement amount at maturity depends on a valuation or on a price index. Here you take on two risks at once: the housing market may fail to rise, and, separately, the valuation methodology may turn out to be opaque, because it is chosen by the party that pays.

Why getting out is harder than getting in

DFAs are not traded on an exchange in the usual sense. Secondary trading is possible within the information system of the issue's operator, and between systems via an exchange operator. In practice, this means a narrow pool of buyers, no continuous quoted demand and a real likelihood of holding the asset until maturity. The liquidity of an exchange-traded instrument can be assessed in advance using data from the equity market; for DFAs there is no such public measure at all — their liquidity is not "low" but unknown.

What to compare it with

The proper benchmark for investing in real estate through an instrument rather than directly is a closed-end real estate mutual fund under Federal Law No. 156-FZ. Such a fund has a licensed management company, a specialised depository, an independent appraiser and rules that cannot be rewritten unilaterally; the range of these instruments can be seen in the funds section. DFAs have no such framework: the information system operator is responsible for running the system, not for the economics of the project. Trust management, investment insurance and compensation schemes do not apply to DFAs.

For direct investment in housing under construction, Federal Law No. 214-FZ applies, with escrow accounts. DFAs offer no such protection — the money goes to the issuer, not into escrow.

Taxes and eligibility

Gains on DFAs are subject to personal income tax under the general rules — 13%. Tax deductions linked to individual investment accounts (IIS) and to long-term holding of securities do not extend to DFAs, because they are not securities. The information system operator or the tax agent for the issue may not withhold the tax on your behalf — in that case, filing the tax return is up to you.

Access is restricted: some issues are available only to qualified investors, while for everyone else there is an annual investment limit, the size of which is set by a Bank of Russia regulation. Check the limit before the trade, not after.

How to read the issue decision

Step 1 — find the operator in the Bank of Russia register and make sure the issue is placed in that operator's system. Step 2 — identify the issuer and its connection to the property: who owns the real estate, who owes you money, and whether anything links them other than a shared brand. Step 3 — find the payout formula and the data source behind it; if the valuation is performed by a party with an interest in the outcome, that is the main risk of the issue. Step 4 — establish the collateral: a pledge over the property, a guarantee from the parent company, or nothing at all. Step 5 — read the early exit procedure and the conditions under which the issuer may change the timing.

What our data does not cover

The site does not track quotes, multiples or payout history for DFAs — such issues are not disclosed in a comparable form, and it is more honest to say so plainly than to substitute similar-looking numbers. What you can follow: corporate news from developers in the news section and the terminology in the glossary — the DFA structure relies on concepts worth distinguishing in advance.