Do you mean rent or do you mean buying/selling of the house? I don't know how it's in your country but I'll tell you how it's in mine.
Two people go together to the Public Registry, fill an agreement, get approval from the notary and in this process they agree on two payment methods, pay via cash or via bank transfer, there are no other options. I think that procedure will be similar in your country. In this case, you choose cash but behind the scenes, you pay with Bitcoin but here is the problem, you two didn't agree on Bitcoin payments, which means that you ruined the agreement and for a bonus, you made a type of transaction that's illegal in your country. You lose everything in this case, I wouldn't risk this. Probably I would buy this way from a very close friend or a relative but with strangers, you have no idea how honest they'll be.

OP should forget about big purchases like houses and expensive cars because his money comes from an illegal asset in his country. But no one can stop him from paying individuals in bitcoin and receiving goods and services in return. Also, no one can stop him from exchanging his bitcoin to fiat and using the cash however he sees fit. 

I bet the person who was been swindled won't file a complaint because transacting in Bitcoin is illegal and the possibility of the victim going to jail is high.  It would be double trouble if the victim were found doing illegal Bitcoin transaction.
Instead of the court solving the case of the victim, the court will probably accuse the victim of money laundering due to illegal Bitcoin transactions and the culprit will probably convicted not because of swindling the person but rather because of illegal Bitcoin transactions.  So there is a huge chance that the dispute will be solved among the person involved and won't go to court.

There are several risk factors attached to using gambling for transactions in a country where it is declared illegal. Because of the nature of Bitcoin, as a decentralized system, it has made it extremely difficult for the central government or any type of government to have control over the digital financial system. So, the government may not necessarily be able to completely stop the use of the bitcoin or cryptocurrency but you are more exposed to lost of your digital assets through seizures especially if such transactions are traced to any suspicion.

For instance, if your real estate transactions run in billions of dollars and the transactions were trailed to your account, government might find its way to seize such funds and the worse of it is that you cannot reclaim the lost financial assets through any legal process since it's already flagged as an illegal currency.

If bitcoin is not legal in your country then I don't see any need to trade bitcoin from your country. In such a situation, if you want to make a transaction, you can get caught in a lawsuit if the person sues you for endangerment because Bitcoin is illegal in your country. So you can't even get sued if you transact with bitcoin from a country where bitcoin is illegal. So you will be considered fully accused in the case. By converting bitcoin to local currency through p2p to stay hassle free, you will give your local money to your property owner and here you can keep the statement so that the property owner can't put you in any danger. Bitcoin is illegal in my country I never transact anything through bitcoin from my country I convert bitcoin to local currency through p2p from my country and transact with that local currency so far I have no problems.

There is always a smart dangling during such transactions of where related transactions is tagged illegal.

Normally there are some kind of transactions that would require third parties (middle man) or withness to testify that transactions was rightfully made.

We know that Bitcoin is one financial system which does not require any of those Parities due to Proof of Work (PoW).

So in this case, the best option for the buyer to stand a safer side of the transaction is if the Bitcoin payment was made in a custodial wallets or exchanges that requires KYCs where our personal informations are being updated in the network system in case the proof of payment is provided there would be no denial.

Other words... If the government have to prosecute me, both me (buyer) and the seller would all be at equal victim of violating the law. So,

as long as you're operating in a country where Bitcoin transaction are illegal, making payment through such medium should be entirely based on trust or through a reputable exchange and even at that, you have to have it at the back of your mind that should things go north, you don't have a choice rather than letting it go because you don't have a case in a court of law.

If you've made a payment to someone that refuse to acknowledge that he received the payment, if you're taking him to court, it's purely based on the fact that you're ready to drag the two of you down because regardless of how he says it, he's going to definitely face same penalty with you cause for agreeing to accept a payment in Bitcoin in a country where Bitcoin is illegal is a total crime that will involve the punishment of both the sender and the receiver.

If Bitcoin is illegal in a country, it simply means that the law does not recognise it. The court will declare that there was no financial transaction so the buyer might lose his money. The seller will also face some consequences if it is confirmed that he received Bitcoins. There is an allegation that he collected illegal money and might be investigated. If indicted for committing such a crime it can attract fines or jail term. The simple way to avoid such problems is to avoid using Bitcoin if it is illegal in your country. You might not lucky as people who have been doing it illegally. 

Your example is excellent.

When government marks Bitcoin is illegal as a mean for any trade, like house trade and other trades, if you and your trade partner try to invade it by using bitcoin as a mean for the trade, risk rises from here.

Everything will be smooth if the trade is done without any problem from you or your trade partner. If the trade goes bad, with one of trade participants do things like scam, another trade participant will have big trouble. If he brings this trade to police, what police will do. Arrest the scammer if possible, forces him to refund money to the victim; but what will happen with the scammer?

I believe that bitcoin of the scammer will be seized.

I think a case like this is very unlikely to happen, especially in a country that strictly prohibits cryptocurrencies like bitcoin. Because logically, everyone in a country like that already knows that bitcoin or cryptocurrency is prohibited, so if for example there is a problem such as being cheated (using bitcoin/crypto), it is unlikely that the case will be reported to the police. Because you can be sure, if for example a case like this is brought to the police station, the problem will become even more complicated. It could be that both those who report and those who are reported are arrested, on the grounds that they have violated the rules in that country, namely carrying out transactions using bitcoin/crypto. So for sure, in my opinion, it is impossible for anyone to report such a case in a country where bitcoin/crypto is banned, even if the person was really cheated. Because as far as I know, in the realm of bitcoin or crypto, most people choose to remain silent when they are cheated. Because if for example this was announced to other people, it would definitely be very dangerous. Because it could be that after telling people about this, there are a handful of people who have evil intentions, such as robbery. Because currently people who are involved in the world of bitcoin/crypto investment are seen as truly rich people, especially by ordinary people. So if we experience a case like this, I think it would be better to keep quiet, especially if for example in a country that still prohibits bitcoin or crypto. And the conclusion from my answer to your question, it is clear that the person who reported the case and who was reported will be fined/penalized because they have violated the rules of their country's government.