Well we are back from our second stay at our Italian villa. Life goes on but we still dream of the sites, the people, the food, the wine, the gelato, the beaches … and on and on. In this BLOG we will discuss some of the considerations of buying a place outside the USA. First you need to find your dream place, The internet is full of places for sale. We chose solely on the views. Once you find a place and negotiate your price, you will need to transfer money as a down payment. We did this by wire transfer from our US account to the owners account in Italy. We were working through a realtor in the UK.
Money transfers are a big thing in this day and age of terrorism. Our Homeland Security requires documentation of any foreign account that is over a dollar value even for a day (when we did the transaction it was $50,000). Check the web for current restorations. There is no tax due on this amount (it is NOT the IRS). It just notifies our government that you had an account with substantial funds and the reason. We filed the paperwork and all was well. Not filing can lead to huge fines! In addition the Italian government requires paperwork on amounts over $5,000. We keep our transfers around $4,000 (which lasts a few years).
The next feat was to transfer the amount you will owe at closing. This can be $1000,000 to several million depending on your property. Of course if you take out a foreign mortgage that amount will be reduced by the mortgage amount. We decided to pay cash. The problem we had now was our government requires the person to be present when opening a foreign account. At the time we could not initiate a wire transfer remotely. We would have to fly to Italy open an account, fly back to the US and transfer the funds, then return to Italy for the closing. That would cost an extra $1200 to $1600 in airfare. Luckily we found companies like World First that transfer dollars to Euros and wire them into your foreign account. On smaller amounts they charge a small amount over the World Bank exchange rates. On large amounts they match it. Wiring from an US bank directly would cost a fee plus an extra 4-8% on the amount. If you were wiring even $100,000 that would be $4,000 to $8,000 extra.
In Europe kitchens do NOT typically come with a house (new or resale). People take all appliances, cabinets and sink with them. We had a beautiful tile wall with electric plugs and switches, pipes for water & drainage. That was our kitchen. We bought an entire kitchen and had it installed. It included refrigerator, stove (oven and cook top), sink and cabinets. It fit the wall perfect. We love our kitchen and it didn’t cost anything near what it would in the states. Refrigerators are very small by US standards. You do NOT need a big refrigerator/freezer. Italians use very little frozen items (mostly ice cream and ice cubes). They buy everything fresh each day so the refrigerator doesn’t need to be big. If you are going to buy in Europe, get into the lifestyle. Don’t try to fit our American standards to your European house!
You will use your foreign account to pay taxes, water bills, garbage pickup bills, electric & gas bills. Most banks have electronic banking so you can control you account from the US. Most also do not translate their pages into English. You have to do some translation on your own and get use to the site. You can also setup auto pay with all bills except taxes and Garbage pickup fees. For us these two are about $500 a year payable half in summer and remaining half in December. The bank website has a special page to pay these taxes.
Tomorrow we will discuss Living style in Italy. Houses are small but people live outside a lot.
George & Jo Anne