Tax and house purchase are 2 different things right. For the latter, I can only say that I know that in several countries, providing evidence for the source of funds is, nowadays, a requirement. But it doesn't need to be perfect evidence, just, evidence that is plausible enough for e.g. notaries, lawyers. I *think* this is true (nowadays) across basically all "developed" countries, but I'm not sure.
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I was just using house as an example of having to sell bitcoin and create a taxable event.
A lot of people here are (rightly) pushing no-kyc purchasing of bitcoin. I’m essentially wondering how are these people going to ‘use’ this bitcoin in a kyc/fiat world if they need to? Because in my mind using no-kyc coins for large purchases isn’t possible without alerting taxman/govenrment/bank etc
Yes. The tough question is, indeed, if you want to do larger purchases but also stay kyc free, it's nearly impossible in today's world. Note that that doesn't imply it's worthless to stay kyc free. But then also note that staying kyc free totally, could make certain purchases impossible. No easy answers; even the lazy answer "always use kyc" will carry its own, separate, risks.
