Q Question: I am ready to buy an Italian property. Is it the time to open a bank account?
A Answer: In order to complete an Italian property purchase it is not necessary to have an Italian bank account, even if you are not an Italian citizen nor an Italian resident. You can transfer needed funds to your trusted representative, for example an Italian Law Firm or to your notary who can hold your funds in an escrow account and then make safe and timely payments on your behalf as and when needed. In particular, your representative can settle the purchase price balance, notary fee, transfer taxes etc. on your behalf.
However, if you own or will own an Italian property, an Italian bank account might be convenient, for instance to establish direct utility payments and settle other local bills for which international money transfers might not be effective. In order to open a bank account, you need an Italian Tax Code (Codice Fiscale). Some of our foreign clients who own properties in Italy do not have an Italian bank account, to avoid the need to fall under Foreign Account Tax Compliance Regulations (in the USA “FATCA“) or similar duties. If you do not live in Italy, or if you are a US citizen (thus subject to tax return filing obligation regardless your residence), you might consider as follows before opening an Italian bank account:
- Italian utilities: some can be charged directly to foreign credit cards; also you can use a local property bill management service that can manage payments on your behalf, such as collect rent (if any), pay condo fees, annual property taxes, bills, suppliers etc.;
- Bank charges: Italian bank accounts are typically subject to high monthly bank charges and quarterly stamp duties (average yearly cost ranging from €300 to €500);
- Tax Reporting: If the Italian bank account balance exceeds a certain amount and you are not an Italian resident (or if you are a US citizen), your home country tax rules might require that you report information regarding your Italian bank account through your home country tax return;
- Currency exchange: There are several currency exchange brokers offering online services to make small and large currency exchange transactions and money transfers overseas at competitive rates. This might make easier to make payments directly from your country to settle Italian bills.
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