making payments to italy

mikrokosmos Image
07/29/2010 - 16:17

We are in the process of buying a small property in Lazio and hope to travel out in early September to sign the paperwork and make the final payments. Does anyone have any suggestions as to the best and most cost effective way of doing this. The seller/notaio prefer us to hand over a cheque on the day rather than a bank transfer. Our bank has suggested an account whereby we can write a cheque in euros but it may take 6-8 weeks to clear the cheque - obviously not acceptable! Bank transfers are also a worry as they would need to be done in advance of the signing of the contract - not necessarily the wisest thing to do in view of any problems that may arise on the day. Any advise would be most welcome.



I'd suggest you simply open a local bank account in Italy. Your estate agent should be able to do it for you and although you won't be able to take any money out until you have visited the bank to complete the paperwork, you WILL be able to pay money in. Use a suitable foreign exchange broker to move the money to your new account (I use hifx but there are plenty of others), but BE CAREFUL, we are so used to moving money instantly in the UK and moving Euro around takes longer - especially since the amount is almost certainly above the invisible limit on your debit card and so to pay the forex broker, you need to do a bank transfer which will take perhaps 3 days, then the forex people will send the money on to Italy which may take a further 4 days ... basically moving money from sterling in the UK to Euro in Italy will take you 7 days if you are lucky so do allow plenty of time. It can and DOES go wrong, my worst experience was with Citibank, who took over 2 weeks - so do start building your italian funds early! When you arrive in Italy to complete, you visit the bank, sign the paperwork for the account and then collect bank drafts for the amounts required. Obviously you only hand over the bank drafts if everything goes according to plan and if there is a problem, you can just take them back to the bank and have then cancelled. We completed on our purchase last week (hurrah!!) so this all quite fresh in my mind!  Best wishes for your purchase! B

Technically you should be present in person to open a bank account, its the law on recycling money.  If you cant get a bank account open, your only option is to get bank drafts, (assegni circolari) drawn on an Italian bank and present them at act.  Personal cheques are no good.  The bonifico route is always a worry - not only do you have to prove the sending of the money, but the seller has to prove the receipt of the money before the signing of the act - though it is a perfectly legal way of doing it - I cant think why the notaio is against it.  You could always try the Monte dei PAschi in London and see if they would give you euro assegni, or in the last resort, find someone trustworthy, pay the money into their account and get them to draw the assegni for you.  Bear in mind that to receive money Italian banks can charge - up to 0,15% of the total sum. 

We have been through this process last year as well and we went down the same route as brancusi. (I actually cannot think of another way of doing it). Our estate agent assited in opening a bank account (San Paulo). As brancusi says we *didn't* have to be in attendance to open the account so that we could pay money in. We then purchased the Euro's through HiFX and transfered them to the bank. That took about 7 days in total from instruction, bacs, transmission and landing in bank account. We then instructed the bank to raise the bankers drafts to pay sellers, notaio and estate agent. On the day of the act we visited the bank, formally opened the account, signed for all the drafts, and then duly distributed drafts to all parties during the act.....job done. I don't see how you could do it without an Italian bank account and bankers drafts from said bank as during the act everything has to be squared away, paperwork signed and money paid. Personal cheques would not be accepted.

I have used Rationalfx to transfer money to the developer for the deposit. You can 'book' the rate of exchange in advance through a spot or forward contract and get the exchange at the rate of the date of the agreement, rather than on the date they actually transfer the money, which may be up to a  week later. This is only useful if you know that the pound is on a roll or the euro is on the slide, but as the money markets are so volatile it is difficult to predict what is going to happen. 

I agree with those who say to get a bank account [my estate agent helped me get the Codice Fiscale and set up the account].  As well as getting the bankers drafts for the purchase, you'll find it invaluable later on for paying things like Gas and Electric by Direct debits

I agree with much of what has been said.  Like brancusi we completed last week.  The property was paid for by bankers draft (assegni circolari) but personal cheques were accepted by the Estate Agent, Geometra and the Notaio. We also used a couple of Foreign exchange companies and has been said, it varies in time, although one transferred it within hours (still took 3 days to clear in Italy).  Spot rates do vary quite a bit and can be negotiable depending on amount.  We also transferred the bulk of the money gaining a forward rate, some of which are quite good at the moment. Good Luck!

If you happen to have a euro account in another European country, do not even think about writing a cheque in Italy. I have a Spanish bank account, and I thought I was being clever in paying the deposit for a property in Italy with a cheque drawn on my Spanish account, avoiding currency conversion fees. But it misfired badly. The cheque apparently disappeared into the ether. It was difficult to keep track of my account as I was in England and the Spanish bank (Unicaja) does not reply to e-mails. Six weeks later, being in Spain, I went to my bank in person. They told me that their CIC code had now changed (no-one had told me about this!) and as the cheque had the old CIC code it would not be paid. I therefore arranged for the cheque to be cancelled. A month later, the Italian estate agent I had given the cheque to contacted me to say that when their bank presented it, the Spanish bank had reported it as stolen, and Interpol had started making enquiries! The Spanish bank had also charged the estate agent 60 euros. This episode was embarassing, to say the least. But it would never have come about if the Italian bank had not taken 2 months to process the cheque, or if the Spanish bank had cancelled the cheque as I asked them to. I don't know what the moral of this tale is - distrust all banks, assume that if things can go wrong they will, and keep all your euros in an old sock under the mattress, I think. 

  Firstly, thank you, everybody, for your helpful responses. We had been put off opening an Italian bank account by various people who have done – complex, expensive & slow! But a number of you have clearly not had problems, so we might reconsider. We paid the deposit via TorFx (UK currency dealer, similar to HiFx), which worked well, although the process did involve some trust between the relevant parties. The transfer was same-day at the UK end, but took 3 days to show up in the sellers account… However, TorFx supplied documented proof of the transfer, which we took with us on the day of signing the compremesso, and the seller & geometra accepted this. The danger was that we had to transfer the money before signing the compremesso, and the seller didn’t actually have the money in his account either! But we did know who we were dealing with, and the costs of the transfer were zero. Paying the full balance is our concern now, and while it’s possible the notaio may agree to receiving payment via a transfer, the timing is difficult to get right. We did look at UK euro accounts, but they are pretty useless, and cheques can take weeks to cash. Anyway, I guess the next step is to ask the notaio what the accepted method of paying is - I think she has completed a number of foreign property deals. Thanks again for all the advice. Mikro.    

Hello!   I think that's really a very hard decision for you to decide, so please be careful on what you are thinking. Since, it's my first time to post here..just want to ask if when could i put sigs here? are there any limits?    Thanks a lot!

When we bought our place, last year, we raised a Euro cheque on a UK Bank and took it with use for both the deposit and final payment. There were a few grumbles for the Notary but all was accepted in the end. Please remember if you do take the money in the form of cash OR cheque you must declare it at customs. I think there is paperwork to complete but it costs nothing but you may need proof as to where the money has come from (ie the paperwork that generated the cash/cheque). It is to stop money laundering.