Many individuals from all over the world dream about moving to Italy in order to live a peaceful and slow-paced lifestyle. As we discussed in previous articles, purchasing a property in Italy is a worthwhile investment, however, the process may appear daunting and intricate for those venturing into the Italian real estate market for the first time. For instance, many potential buyers may be concerned about transferring considerable amounts of money abroad as well as finalizing the transaction. This article will outline detailed information about the payment methods which are available to foreign citizens who would like to purchase a property in Italy.
How to transfer money to Italy from abroad
When purchasing a property, many buyers pay via wire transfer and thus send their funds from their bank accounts in their home country to Italy. Please bear in mind that commission and conversion fees apply, and these vary depending on the conversion rate between currencies, which is subject to fluctuations. At the time of writing this article, 1 US dollar equals to 0.92 Euros. In addition to commission fees, many banks may charge administrative fees to process the transfer. However, there are online money transfer platforms such as wise.com, for instance, which allow individuals to transfer money between countries at competitive rates. In order to wire funds to any bank account in Italy, you will need the following information:
- The recipient’s first name and last name
- The recipient’s IBAN (= International Bank Account Number)
- The recipient’s SWIFT code, also known as “BIC” (= Bank Identifier Code)
What are IBANs and SWIFT codes?
The IBAN code is used to identify a specific account number. An IBAN is similar to a routing number in the United States. The IBAN is composed of 27 alphanumeric characters and it looks like the example provided below:
IT 33 X 01005 03200 XXXXXXXXXXXX
The IBAN consists of the following digits:
- 2 letters identifying the country (“IT” stands for Italy);
- 2 numbers for the international control code, also referred to as “CIN EUR” (= Control Internal Number in Europe);
- 1 letter for the national control code, known as “CIN” (= Control Internal Number);
- 5 numbers identifying the bank according to the “ABI” code (= Italian Banking Association);
- 5 numbers identifying the bank’s branch according to the “CAB” code (= Codice di Avviamento Bancario);
- 12 alphanumeric characters related to the bank account (or conto corrente in Italian).
A SWIFT code is a security code created by the Society for Worldwide Interbank Financial Telecommunication, from which the acronym derives. A SWIFT code is required for all international wire transfers and it identifies a banking institution. The code consists of several alphanumeric characters and it usually contains 8 to 11 digits. A SWIFT code looks like the example provided below:
UNCR IT MM (XXX)
The digits refer to the following:
- 4 letters identify the banking institution’s abbreviated name (in this example “UNCR” stands for UNICREDIT S.P.A., one of the most popular banks in Italy);
- 2 letters indicate the country (“IT” stands for Italy);
- 2 letters or 2 numbers refer to the bank’s location (“MM” stands for Milan);
- 3 optional characters identify the bank’s branch (if there are three X like in the example above or the digits are absent, it means that the SWIFT code is linked to the bank’s headquarters and not to a specific branch).
A SWIFT code is essential to transfer money internationally and it ensures that the process is carried out safely.
Purchasing a property via an international wire transfer
Generally, the payment for a property must be formalised before the notary during the final deed of sale, which is when both the buyer and the seller sign the final contract of sale. Although you may send the deposit (or Caparra in Italian) to the seller in order to secure the property you have decided to purchase, we recommend remitting the final payment to the notary a few days before the final deed of sale to allow the time for the funds to reach the notary’s bank account. In fact, the notary usually has a dedicated bank account whose purpose is to keep the buyers’ funds secure. This is a useful service that the notary provides specifically for foreign buyers who do not have a bank account in Italy. In essence, this option allows foreign citizens to send the funds via an international wire transfer a few days before the final deed so that on that day the notary can transfer the funds received directly to the seller. Therefore, if you cannot travel to Italy and open a bank account, you can transfer your money to the notary’s bank account and the notary will then send the funds to the seller on your behalf. It is not advisable to send the funds to the seller prior to the final deed of sale as all payments must be formalised on the day on which the deed of sale is signed by the seller and the buyer (or by the individual representing the buyer via a Power of Attorney).
Purchasing a property via a cashier’s check
Although you can cash a foreign check into an Italian bank account quite easily, it is very unlikely that a seller will accept an international check as they are hard to verify. In fact, as a general rule, personal checks are never accepted if you are purchasing a property in Italy. Instead, buyers must use the so-called assegno circolare (cashier’s check or certified check) to complete the purchase. This is the safest and most common payment method used to purchase a property because it is created by the bank and it certifies that the amount will be paid to the recipient. Therefore, if you wish to pay for your new house by using a cashier’s check, the easiest way to do so is to open a bank account in Italy and to request a check from the bank. If you choose this payment method, on the day of the final deed of sale you will need to hand a cashier’s check to the notary and one to the seller to close the sale and complete the property purchase.
Opening a bank account in Italy
As mentioned earlier, you can remit the payment for a property through an international wire transfer. However, if you can travel to Italy before the closing date, we recommend opening an Italian bank account. A few Italian banks may allow you to open a bank account even if you are not a resident of Italy or if you do not have Italian citizenship, however this depends on each individual’s specific circumstances. Once you have opened your account, you can decide to pay the funds for your property either by requesting a cashier’s check or by making the payment via a national wire transfer.
Opening a bank account in Italy is also useful after you have purchased your property in order to pay utility bills, for example. In fact, recurring automatic payments are more efficient than single payments made by credit or debit card or by postal order (bollettino postale).
If you wish to learn more about the purchasing process or you would like to enquire about our tailored services, do not hesitate to contact our team of real estate lawyers at email@example.com.