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Example
In May 2005 a Mr M had found a property in Europe for which he had a balance
of €150,000 to pay. In the first week of June, when the Euro reached
1.52 to the pound, the property would have cost him £98,684. When Mr M
came to make the final payment on 20th July, the Euro had dropped back
to 1.44, the result of which was a final price of £104,167 - an additional
cost of a staggering £5,483 in around six weeks.
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Much of this loss could have been prevented by securing the
rate with a Forward Time Option Contract, where the funds can be made available
with a window of up to 3 months in a 24 month period. This mechanism is especially
useful when market conditions are currently advantageous, but the currency is
not actually needed until a future date.
Many clients will be selling their main residence, with an uncertain completion
date. In this situation, when the market is offering attractive rates, they
could be well advised to take advantage by securing their exchange rate with
a Forward Time Option Contract.
The situation can become more complex when purchasing a new property off
plan. This will typically involve multiple stage payments over periods of
up to 18 months or longer. Due to only guide dates being given for completion
of each stage, a series of Forward Time Option contracts could secure the rates
right up until the final completion, whist remaining flexible in order to accommodate
unspecific dates.
With our recommended exchange trading company Foreign Currency Direct, you have
available to you all the tools utilised by major institutions. You would be
appointed an Account Manager who would explain how these could be employed to
protect your interests when you are considering currency transfers in a volatile
market. Stop Loss and Limit Orders can be employed to ensure you achieve the
best price the market can offer within a defined time period.
Your nominated Account Manager will be pleased to explain in detail, all the
rules and regulations for moving money abroad also the alternatives like the
current foreign exchange rate and other special discounted exchange rates to
try to ensure you get the best possible rates, based on your individual requirements.
Please click on the link below to get the most from your money when purchasing
a property in Crete!
Although not strictly required under EU law, we recommend that you obtain a 'pink slip' (import document) from the receiving Greek bank when you import money into Greece. This will be required for your Greek tax return, and also simplifies matters if you want to export money at a later date, perhaps on property re-sale.
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