Question: I am ready to buy an Italian property. Do I need to have an Italian bank account?
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 obligations under Foreign Account Tax Compliance regulations (in the USA “FATCA“) or similar duties or because they prefer to delegate all Italian based payments (utilities, insurance, condo, taxes, etc.). If you do not live in Italy, or if you are a US citizen (thus subject to tax return filing obligations regardless your residency), you might consider some of the following alternatives before opening an Italian bank account:
- Italian utilities: some can be debited directly to foreign credit cards; additionally, 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, home owner insurance, suppliers, etc.; we offer a Property Bill Management service for this purpose;
- 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 your Italian bank account information into your home country tax return;
- Currency exchange: There are several currency exchange brokers offering online bank accounts with an EU IBAN and other services to make small and large currency exchange transactions and international money transfers conveniently from your smartphone and at competitive rates compared to international money transfers ordered through traditional banks. Using an international currency exchange broker often makes easier and more cost effective to make payments directly from your country to settle Italian bills, property purchase deposits, closing costs, price balance, remodeling payments, etc.
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