Real estate tokenization for developers: a practical guide

Key facts

Last updated: 9 November 2026. This guide explains how tokenisation works in general and on LANDHIVE. It is not legal, tax or investment advice.

What real estate tokenization actually is

Real estate tokenization means recording investors' rights in a property, or in a development, as digital tokens on a blockchain instead of only in a share register or a spreadsheet. Each token stands for a defined slice of those rights: a share of rental income, a share of profit on completion, or an interest in the company that owns the project.

Three things matter more than the word "token":

1. The legal wrapper. A token is only as good as the contract and the entity behind it. In almost every serious structure, the property sits in a company (an SPV), and the token represents an interest in that company or a contractual right against it. The token does not replace the land registry.
2. The rights. What the investor is entitled to: income, a share of sale proceeds, voting, information, ranking against lenders. These are set out in the offering documents.
3. The rules on transfer. Real estate tokens are securities in most of Europe. They are issued with transfer restrictions so that only verified, eligible investors can hold them. That is very different from a freely traded crypto token.

Tokenization is therefore best understood as a better way to issue, record and administer an investment in property: onboarding, cap table, distributions and reporting run on one system with a permanent, auditable record.

Why developers look at it

For an investor, tokenization is mostly about access: smaller tickets, visibility of one specific project, and a digital record of what they own. For a developer, the reasons are different.

1. The equity gap. Senior lenders typically fund only part of a scheme's costs. The rest comes from the developer's own money, mezzanine finance or equity partners. That layer is the hardest to raise and the most expensive. A tokenised raise opens it to a wider group of verified investors rather than one or two partners.

2. Control. A single equity partner usually asks for a large share of the profit and a say in decisions. Many smaller investors in a structured offering generally do not, because their rights are fixed in the offering terms.

3. One process instead of many. Onboarding, KYC, collecting funds, paying distributions and sending reports to dozens of investors is a heavy administrative load. A tokenisation platform runs it in one place.

4. A record investors trust. Ownership and every transfer are recorded on-chain, and documents such as smart contract certificates can be checked publicly. For Madrid Puerta Ángel, for example, the token contract and its certificate are published on the project page.

5. Future liquidity, carefully. Tokens can, in principle, be transferred between eligible investors more easily than a private company share. In practice, offerings usually include a lock-up (Madrid has 24 months) and secondary trading depends on regulated venues. It is a long-term benefit, not something to promise investors today.

How a tokenised development raise works, step by step

On LANDHIVE the process runs in seven gated stages. Other platforms use similar steps under different names.

1. Submit

The developer shares the scheme: site, planning status, cost plan, timeline, exit, and the amount and type of capital needed. LANDHIVE reviews development submissions within five working days.

2. Due diligence

The platform checks the developer's track record, title and planning, the numbers, the legal position and the rest of the capital stack. The aim is to find what investors will ask before they ask it.

3. Structure

The developer and the platform agree:

• the vehicle (normally a project SPV),
• the instrument investors hold (for example, a share of profit or income, or equity in the SPV),
• ranking against senior debt,
• minimum and maximum order sizes (Madrid: USD 50,000 minimum, USD 450,000 maximum per investor),
• any lock-up before resale,
• how and when investors are paid.

4. Tokenise

The investors' interest is issued as a digital security. On LANDHIVE this happens through Libertum's T-Suite platform; Madrid's token is an ERC-20 called LHVDEVES on Ethereum mainnet, with smart contract certificate LIB-CERT-2026-000050. Transfer restrictions mean only whitelisted, verified wallets can hold it. For how token contracts, identity checks and distributions work under the hood, see the technical guide to tokenised real estate.

5. Launch

The offering goes live on the investor portal with its documents, risk disclosures and terms.

6. Raise

Investors complete KYC or KYB and eligibility checks, then invest until the offering closes or is fully subscribed.

7. Deliver and report

The developer builds. Distributions, reports and investor communication run through the platform for the life of the investment.

For technical teams. This guide is written for developers and their finance teams. If your CTO, lawyer or fund administrator wants the mechanics (token standards, identity registries, transfer-restriction logic, distribution contracts and code examples), read the companion technical guide to tokenised real estate.

Which blockchain? Ethereum, Polygon, Solana, the XRP Ledger and others

Most developers do not need to pick a blockchain themselves. The tokenisation platform usually decides, or offers a short list. It still helps to know what the choice affects, because it shapes what investors need, where tokens can trade later and how much each transaction costs. The overview below is neutral and general; it is not a recommendation for any network.

What matters to a property developer

• Permissioning and compliance hooks. A security token must refuse transfers to anyone who is not a verified, eligible investor, and the issuer needs to be able to freeze tokens or recover them (for example, when an investor loses a wallet or a court orders a transfer). Some networks and token standards build this in; on others it is added in the token's own contract.
• Fees. Every issue, transfer and distribution costs a network fee. On some networks that is a fraction of a cent; on Ethereum mainnet it varies with demand and can be several dollars or more at busy times. For a raise with dozens of investors and monthly payouts, fees add up.
• Finality. How quickly a transaction becomes irreversible. For property, seconds or minutes both work; what matters is that settlement is certain and documented.
• Custody and wallet support. Institutional and professional investors often hold assets through regulated custodians. A network that their custodian does not support is a barrier, whatever its other merits.
• Investor familiarity. Many crypto-native investors already have an Ethereum-compatible wallet. Traditional investors may prefer a custodial account where the network is invisible to them.
• Secondary venues. If tokens are to be traded later on a regulated venue, that venue supports only certain networks and standards. Choosing a network no venue supports can close that door.

How the main networks compare (as of November 2026)

The table summarises public information as of November 2026. Fees, finality and ecosystem support change often, so treat it as a starting point and check current network documentation before you decide.

What this means in practice: Ethereum and the networks compatible with it (L2s, Polygon, Avalanche's EVM chain) share the same token standards and most of the same tooling, so a token's design can often be reused across them. Solana, the XRP Ledger, Stellar and Polymesh each have their own model (the XRP Ledger's EVM sidechain is the exception, and runs Ethereum-style contracts). Moving a live security token between networks is possible but is a legal and operational project, not a switch.

Security-token standards

A token standard is the shared rulebook that wallets, custodians and exchanges expect a token to follow. For securities, the question is how transfer restrictions and issuer controls are built in.

• ERC-3643 (T-REX). An Ethereum standard for permissioned tokens. Each investor's wallet is linked to an on-chain identity, and every transfer is checked against an identity registry and a set of compliance rules (for example, country limits or a maximum number of holders). It includes freezing, forced transfers and recovery of lost wallets. It is a finalised Ethereum standard with an industry association behind it.
• ERC-1400. An earlier family of security-token proposals (covering partitions of a holding, attached documents and controller transfers). It influenced many issuers' contracts but was never finalised as a single standard.
• ERC-20 with transfer restrictions. The ordinary Ethereum token standard, with a whitelist or compliance check added to every transfer. It works with the widest range of wallets and tools; the restrictions live in the token's own contract rather than in a shared framework. LANDHIVE's live Madrid offering is an ERC-20 called LHVDEVES on Ethereum mainnet, issued through Libertum's T-Suite to whitelisted, verified wallets only.
• Solana Token-2022 extensions. Solana's newer token program adds optional features. A transfer hook runs the issuer's own program on every transfer, so it can check eligibility. A permanent delegate lets the issuer move or burn tokens from any account, which covers recovery and court orders. Accounts can also be set to start frozen until an investor is approved.
• XRP Ledger Multi-Purpose Tokens (MPTs) and issued tokens. On the XRP Ledger, compliance controls are features of the ledger itself rather than code the issuer writes. An issuer can require that it approves each holder before they can receive the token, freeze individual holdings or the whole issue, and claw tokens back (for lost wallets or court orders). MPTs, live on mainnet since early 2026, carry fixed metadata and these controls for securities-style assets, and the ledger's escrow feature extends to them.

None of these standards makes a token compliant on its own. Compliance comes from the legal structure, the offering documents and the checks run on each investor; the standard is how those rules are enforced on-chain.

What it costs

Tokenisation platforms generally charge two kinds of fee:

• a set-up or tokenisation fee when the offering is structured and issued, and
• a platform fee for ongoing administration, investor access and reporting.

On LANDHIVE, exact levels depend on the size and structure of the raise and are agreed before launch.

Add your own costs: legal work on the SPV and offering documents, valuation and any tax advice. Then compare the total with the cost of the alternative: interest, arrangement and exit fees on a loan, or the share of profit given to an equity partner. LANDHIVE's financing calculator lets you model a development loan against a tokenised raise.

How it compares with other ways to fund a development

These are general descriptions; real terms vary by lender, project and market. Most schemes combine several sources. A tokenised raise most often replaces part of the equity or mezzanine layer, not the senior loan.

Tokenization vs crowdfunding. The two look similar from the outside: many investors, one project. The difference is in the record and the rules. In conventional crowdfunding the investor's claim is usually a contract held in the platform's own database. In a tokenised offering the claim is issued as a digital security with transfer rules built in and a public, permanent record of ownership.

Tokenization vs a REIT. A REIT pools many properties and trades as a listed fund. A tokenised development is tied to one identifiable project.

Regulation by market

This section is a general orientation, not legal advice. Rules change, thresholds are revised and each offering needs its own legal review in every country where it is marketed. Take advice from a qualified lawyer before relying on any of it.

The starting point is the same almost everywhere: a token that gives rights to profit, income or equity in a property company is usually a security. Securities law applies to it in the same way as to a paper share or bond. Putting it on a blockchain changes how it is recorded, not what it is.

European Union

• MiCA (Markets in Crypto-Assets Regulation, (EU) 2023/1114). MiCA has applied in full since 30 December 2024. It covers crypto-assets that are not already regulated elsewhere: utility tokens, stablecoins and similar. It expressly excludes crypto-assets that qualify as financial instruments, which is where most real estate tokens fall. ESMA has published guidelines on how to decide whether a crypto-asset is a financial instrument. MiCA still matters indirectly: stablecoins used to pay distributions, and firms that hold or exchange them, fall under it.
• MiFID II. If the token is a financial instrument, MiFID II governs the firms that market, place, hold or trade it. EU law confirms that financial instruments issued using distributed ledger technology are still financial instruments. In practice the platform, or a partner, needs the right investment-firm authorisation.
• Prospectus Regulation ((EU) 2017/1129). An offer of securities to the public needs an approved prospectus unless an exemption applies. The usual exemptions are offers made only to qualified investors, offers to fewer than 150 people per member state (other than qualified investors), offers with a minimum investment of EUR 100,000 per investor, and small offers below a total threshold over 12 months. The EU Listing Act ((EU) 2024/2809) revises the small-offer threshold and related rules in stages from 2026, so check the threshold that applies in each member state at the time of your offer.
• European Crowdfunding Service Providers Regulation (ECSP, (EU) 2020/1503). Authorised crowdfunding platforms can offer transferable securities and certain company shares across the EU under one licence, without a prospectus, for raises up to EUR 5 million per project owner over 12 months. It adds protections for non-sophisticated investors, including an entry knowledge test, a four-day reflection period and loss-bearing warnings. Whether a given tokenised instrument fits within ECSP is a question for your lawyer.
• DLT Pilot Regime ((EU) 2022/858). Since March 2023 this lets authorised operators run trading and settlement venues for tokenised securities with some rules relaxed. It has size caps: for example, shares of issuers with a market capitalisation under EUR 500 million and bonds with an issue size under EUR 1 billion, within an overall limit per venue, and changes to these caps have been proposed. For developers, it is the main EU route towards regulated secondary trading of tokenised securities.

Spain

• Ley 6/2023 de los Mercados de Valores y de los Servicios de Inversión. Spain's securities markets law of March 2023 recognises securities represented through distributed ledger systems. A tokenised security needs an entity responsible for administering its registration on the ledger, and that entity must meet the law's requirements.
• CNMV. The Comisión Nacional del Mercado de Valores supervises securities offerings, investment firms and crowdfunding platforms in Spain, and is the national authority for MiCA. Spain also runs a financial sandbox in which tokenisation projects have been tested.

United Kingdom

• Financial promotion regime (FSMA 2000, section 21). A person who is not FCA-authorised may not communicate an invitation or inducement to invest unless an authorised person approves it or an exemption applies. The exemptions most used for private property offerings are in the Financial Promotion Order 2005 and cover investment professionals, certified high net worth individuals, certified or self-certified sophisticated investors and high net worth companies. The income and asset thresholds for these categories were changed in 2024.
• Public offers. The UK replaced its retained prospectus rules with a new public offers regime that came into force in January 2026, including a new regulated activity of operating a public offer platform for larger unlisted offers.
• Digital Securities Sandbox. Run by the Bank of England and the FCA since January 2024, it lets firms operate trading and settlement infrastructure for digital securities under modified rules, with limits that rise as firms show the model works. It is expected to run for five years.

Switzerland

• DLT Act. Switzerland's DLT Act, in force since 2021, created ledger-based securities (Registerwertrechte): rights that exist and transfer only on a distributed ledger, under the Code of Obligations, without a separate paper certificate. It also created a licence for DLT trading facilities.
• FINMA. The Swiss Financial Market Supervisory Authority classifies tokens by function. Tokens that represent claims on an issuer or rights in a company ("asset tokens") are generally treated as securities. Public offers of securities fall under the Financial Services Act (FinSA), with prospectus exemptions such as offers to fewer than 500 investors or with a minimum investment of CHF 100,000.

United States

LANDHIVE offerings are not currently open to US persons. This section explains the US framework because developers and investors often ask about it.

• Securities Act of 1933 and the Howey test. Every offer and sale of securities in the US must be registered with the SEC or exempt. Under the Howey test, an investment of money in a common enterprise with an expectation of profits from the efforts of others is an investment contract, and so a security. A token giving rights to development profit or rental income almost always meets that test. SEC officials have also said publicly that tokenised securities remain securities.
• Regulation D. The most common private route. Rule 506(b) allows an unlimited raise from accredited investors plus up to 35 non-accredited but sophisticated investors, with no general solicitation. Rule 506(c) allows general solicitation, but every buyer must be accredited and the issuer must take reasonable steps to verify it. SEC staff guidance in 2025 indicated that a high minimum investment, combined with written confirmations from the investor, can count as reasonable verification. Issuers file a Form D with the SEC within 15 days of the first sale, plus state notice filings.
• Resale limits (Rule 144). Securities bought under Regulation D are restricted. Without registration, holders of a non-reporting issuer's securities generally must wait a year before reselling under Rule 144. Token transfer restrictions must enforce this.
• Regulation S. Covers offers and sales made outside the US, with no selling efforts directed at the US. Depending on the issuer and the security, a distribution compliance period applies during which tokens may not be sold to US persons; for equity of a US issuer that does not report to the SEC, this is one year. Tokens on a public blockchain make flowback to US buyers easy, so wallet-level restrictions matter.
• Regulation A+ and Regulation CF, briefly. Regulation A+ allows public offerings of up to USD 75 million a year (Tier 2) after SEC qualification, open to non-accredited investors within limits. Regulation Crowdfunding allows up to USD 5 million a year through a registered funding portal or broker-dealer, with investment limits per investor. Both involve ongoing reporting.

Summary

KYC and AML apply everywhere. Whatever the market, every investor is identified and screened before they can hold a token.

Risks developers should weigh

• Reputational exposure. Many investors means many people following your build. Delays and cost overruns are visible and need clear communication.
• Ongoing obligations. Reporting, distributions and investor questions last for the life of the investment.
• Offering terms are binding. Once investors have committed on fixed terms, renegotiating is difficult.
• Regulation varies by country. Where and to whom an offering can be marketed depends on each jurisdiction.
• Liquidity is not guaranteed. Investors may be locked in; do not promise easy resale.

For investors, capital is at risk and returns are not guaranteed. Projected yields are estimates, not promises.

Two real examples

ROX Brighton, United Kingdom. A 70-unit residential development completed with Ktesius Projects. LANDHIVE tokenised the rental income of one corporate-let apartment, held in an SPV. Over its first six months the pilot paid an average annualised yield of 8%, monthly, to 20 investors. It is a small, historical pilot result, not a forecast; read what it proved. See the project.

Madrid Puerta Ángel, Spain. A four-apartment, five-storey redevelopment with planning approval at C/ Andújar 4, Madrid. The offering is open on the LANDHIVE portal, with a target yield of 12% on a notional USD 400,000 (an estimate, not a delivered return), a USD 50,000 minimum order, a 24-month lock-up and KYC/KYB for every investor. See the project.

Is your development a fit?

A quick self-check before you apply:

• A specific site and scheme, in the UK or Spain
• Planning approved, or a clear route to it
• A cost plan, timeline and exit (sale, refinance or rental)
• A track record you can show investors
• A clear amount and type of capital to raise, and where it ranks
• Willingness to report to investors for the life of the project

If most boxes are ticked, submit your development. We reply within five working days.

Frequently asked questions

Does tokenization change who legally owns the property? No. The property is usually owned by an SPV. Investors hold tokens representing an interest in that SPV or in its income, as set out in the offering documents.

Can a project be tokenised before it is built? Yes. Development funding is exactly that: capital raised before or during construction. The offering documents must explain the stage and the risks.

Do I still need a bank loan? Usually. A tokenised raise most often funds part of the equity or mezzanine layer alongside senior debt.

Which blockchain is used? On LANDHIVE, the Madrid offering's token is an ERC-20 on Ethereum mainnet, issued through Libertum's T-Suite to whitelisted, verified wallets only.

Which blockchain should I use? Usually your tokenisation platform chooses, so the practical question is whether its network suits your investors. Look at compliance controls (transfer restrictions, freezing and recovery), fees per transfer and distribution, whether your investors' custodians support it, and which regulated venues could list the token later. Ethereum and compatible networks have the widest institutional support; Solana and the XRP Ledger are cheaper per transaction and the XRP Ledger builds issuer controls into the ledger, but both use different token standards. The XRP Ledger is gaining ground in real estate, most visibly through Dubai's title-deed tokenisation project. See the comparison table above.

Can US investors take part? Not in LANDHIVE offerings: they are not currently open to US persons. In general, a US offering of tokenised securities must be registered with the SEC or use an exemption such as Regulation D (accredited investors) or, for offers outside the US, Regulation S, each with its own limits on marketing and resale.

Does MiCA apply to tokenised property? Usually not directly. MiCA excludes crypto-assets that qualify as financial instruments, and a token giving rights to profit, income or equity generally does. Those tokens fall under securities law (MiFID II and the Prospectus Regulation) instead. MiCA can still apply around the edges, for example to stablecoins used to pay distributions. Whether a specific token is a financial instrument is a legal question for each offering.

How are distributions paid on-chain? The platform takes a record of token holders on a set date and pays each eligible wallet its share, usually in a stablecoin, or pays in ordinary currency to a bank account while recording the payment against the token. Only verified wallets receive payments, and any tax withholding is handled in the process. The ROX Brighton pilot paid investors monthly in the DAI stablecoin. Each offering's documents set out the currency, timing and method.

Can investors sell their tokens? Only to eligible, verified investors and subject to the offering's terms, including any lock-up. Liquidity is not guaranteed.

How long does it take to raise? LANDHIVE reviews submissions within five working days. Structuring and launch usually take weeks, depending on how ready the documents are; the raise itself depends on investor demand.

What does a developer pay? A tokenisation fee at issue and a platform fee for ongoing administration and reporting, agreed before launch, plus your own legal and advisory costs.

Is tokenization regulated? Real estate tokens that carry profit, income or equity rights are generally treated as securities and follow securities rules in each country. Get legal advice for your offering.