House sale in Crete - funds back to UK

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BackToUK
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Joined: Thu Sep 01, 2011 4:41 pm
Location: Apokoronas

House sale in Crete - funds back to UK

Postby BackToUK » Thu Sep 01, 2011 4:49 pm

We are hoping to complete our house sale in Crete within a month or so – we are returning to the UK to buy a property. Our buyers are Norwegian and we think it is best if they transfer the funds directly from Norway to the UK, bypassing Greece all together in order to avoid transfer fees etc.

Please can someone advise the best way of going about this transfer, it is very confusing! Our house sale is (obviously) in Euros - is it better for us if the buyers transfer the money in Krone to our bank in the UK? Or should they convert to Euros first and then make the transfer? Or should they make the transfer in Sterling?

Alternatively we could use a currency broker but we have never used one and have no idea how to find out which one is the most reputable, and offers the best rates. Having said that, I have searched this forum and found a recommendation for XE.com

I find it hard to understand how they can make money on the transfer if they offer a better exchange rate and charge no fees? Surely there must be a hidden fee somewhere? Also I'm not sure what they would need from us in order to set up an account - presumably they are all in the UK?

Please can any Wise Members offer some advice? Thanks!

footscapes
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Joined: Fri May 18, 2007 8:37 am
Location: Crete no longer!

Postby footscapes » Thu Sep 01, 2011 5:01 pm

I think that there may be future tax issues for your buyers if the funds bypass the Greek banking system. It seems likely that they will need the necessary "pink slips" to prove (non - Greek) source of funds for the purchase. I'm sure that an accountant or lawyer would advise you on this.

If it does have to go through the Greek system, you could open a GBP deposit account with your bank in Crete, agree a Krone/GBP value and have your buyers send GBP to Greece. It should still satisfy any "pink slip" requirement, but eliminate any further currency risk. You would obviously still have transfer fees to get cash back to the UK.

Paul

Kilkis
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Location: Near Chania

Postby Kilkis » Thu Sep 01, 2011 6:02 pm

Further to footscapes observations there are a couple of points:

1 It is common in Greece for the sale contract to contain the objective value of the property not the market value. When the new buyer completes his first E1 after the purchase he/she will have to declare the value given in the contract plus the notaries fee plus the transfer tax. He/she, therefore, will need to prove transfer of at least that amount to Greece. It should be perfectly possible to transfer the rest of the purchase price directly to the UK. In fact this may be preferable for both of you. If the contract contains the objective value, they transfer the market value to Greece and you then transfer the market value back to the UK where has the extra money come from? Legally you have never received it. You, therefore, would probably need to insist on the market value being in the contract and the buyer would then pay fees and taxes as a percentage of the market value.

2 I think that technically the pink slip is not a just record of money transferred but of Euro purchased in Greece with foreign currency. If I am correct I am not sure that footscapes' idea of transferring into a Greek Sterling account would work?

I agree with him that a lawyer should be able to advise you.

Anyone involved in currency exchange makes a profit by the difference between the rate they buy/sell currency and the fixing rate or by charging a commission or both. UK banks are horrendous. They have a much larger rate difference than either Greek banks or foreign exchange dealers. Never ever allow a UK bank to make the exchange. I am not sure how Scandinavian banks operate but you should be able to find out what they would charge to convert Krone into Sterling or Euro and compare that with the Greek banks and the FX dealers. The FX dealers still retain a small difference but rely on much larger volumes to make a decent profit.

Warwick

filippos
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Location: Kalyves
Contact:

Postby filippos » Thu Sep 01, 2011 6:53 pm

BackToUK wrote:..found a recommendation for XE.com
I find it hard to understand how they can make money
Kilkis wrote:..... in currency exchange makes a profit by the difference between the rate they buy/sell currency and the fixing rate. The FX dealers still retain a small difference but rely on much larger volumes ..
I've used XE.com many times and have always found them fast and efficient. I've yet to find anyone offering better rates. They're one of the world's biggest [maybe the biggest] FX dealers and claim to give the best rates in 90%+ of transactions.

On a practical note, you need to register with them first [money laundering regs, etc.] but they make that quick and simple and it's a one-off requirement. Allow a couple of days.

mouche
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Joined: Sat Jan 15, 2011 5:43 pm

Postby mouche » Thu Sep 01, 2011 7:49 pm

Being norwegians we have ourselves just bought a house in Crete, or to be excact it's still under construction, and payments (installments) to Crete are all very simple and done from home 24/7. We have opened a euroaccount with our norwegian bank and purchase euro and pay with kroner from our account in the same bank.
Have opened a euroaccount in Crete and transfer euro from our euroaccount in Norway to our euroaccount in Crete and authorise via e-mail our lawyer in Crete to transfer funds from this account to the builder as the work progress and the contract stipulates. It's all very reasonable as far as fees are concerned and the exchangerate is very favourable and predictable. In your case it would not be any problem for a norwegian buyer to also open a poundaccount in own bank in Norway and pay from this account to an account in the uk.
Purchase of euro with kroner in own bank is done overnight and transfer of euro from our euroaccount in Norway to our euroaccount in Crete takes only two days.
It's all rather easy and straightforward.

jet
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Joined: Sun Aug 01, 2010 11:06 pm

Re: House sale in Crete - funds back to UK

Postby jet » Thu Sep 01, 2011 8:59 pm

House Buyer shall make available to the Greek tax authorities to prove that the money for the purchase of the house is transferred "white money" and not "black money" to a Greek bank, bank documentation "pink slip" to follow E1 and E9, it must be the buyer's accountant could help, the lawyer should be able to tell how much money to be sent to the Greek bank. The rest of the money the buyer can transfer to the seller from his homeland and it costs the EU paying no great charge, in Sweden 3 SEK = 0.33 Euro for every 50.000 Euro

BackToUK
Posts: 2
Joined: Thu Sep 01, 2011 4:41 pm
Location: Apokoronas

Postby BackToUK » Thu Sep 01, 2011 10:02 pm

Thank you for all your replies - very informative indeed. We did think that perhaps the money should enter the Greek system and can understand the reasons why.

The difference between the objective value and market value should not be a problem because not all of the proceeds are being transferred back to the UK.

Will now take a look at XE.com and others.

Thanks once again.


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