Exchange rates and multi-currency accounts for property

On a property purchase abroad the exchange rate is often a larger cost than the transfer fee, because it is applied to the whole price. A difference of one percent on a EUR 200,000 purchase is EUR 2,000. This article explains where conversion costs come from, how to compare a bank with a specialised payment provider, how payments in stages change the picture and what hedging means at a basic level. It builds on currency and payment for overseas buyers and does not repeat the general advice there. We name providers only as examples of types of service, and nothing here is an endorsement.

Where the cost hides

A currency conversion has two parts that are easy to confuse:

• The exchange rate you are given, compared with a reference rate. The difference is the margin, or spread, and it is often not shown as a fee.
• The explicit fees: a transfer fee from your bank, fees from intermediary banks on a SWIFT payment and sometimes a fee at the receiving bank.

In the EU, Regulation (EU) 2019/518, now part of Regulation (EU) 2021/1230, requires providers to show currency conversion charges for certain cross-border payments as a percentage mark-up over the latest euro reference rate of the European Central Bank. Check the ECB reference rates as a benchmark. We could not confirm how far this disclosure duty applies to your particular payment, in particular for transfers to countries outside the EU, so do not rely on it: ask for the all-in price in writing before you confirm the transaction.

The correct comparison is simple: how many units of the foreign currency will arrive for the euros that leave your account. Everything else is a detail.

Bank versus specialised provider

A bank usually converts at its own rate, with a margin that is not always disclosed, and may add a fee. Specialised providers, such as Wise or Revolut, work differently, and it is useful to know the difference in structure, not to choose a favourite. According to its own information, Wise converts at the mid-market rate and shows its fee separately. Revolut states that its exchange rates and limits depend on the plan and that a mark-up can apply for conversions above a plan allowance or at weekends; its pricing pages and the comparison pages of competitors disagree in detail, and these terms change often. We therefore give no percentages. The practical approach is to request a quote from each option for the same amount and the same date and compare the final amount received.

Points that matter more than a headline rate for a large purchase:

• Per-transfer and daily limits. A provider may cap a single transfer or require extra verification for large amounts. Ask before the payment date.
• Whether the provider can pay out to the type of account the seller or developer uses, and in the right currency. Some countries or currencies are not supported.
• Whether the seller's side accepts a payment from a non-bank payment institution. Some developers or registries are cautious about the sender's identity; check in advance.
• Safeguarding. Payment institutions and e-money institutions are regulated differently from banks. Read how customer money is protected and keep large balances for as short a time as possible.
• Source-of-funds checks apply to providers as well as to banks. A large payment may be held for documents, as described in what the bank asks before a large transfer.

The currencies in this market

• EUR to USD. A deep market, and the spread is usually the narrowest of the pairs here. Many Dubai and international developers quote in dollars or dirhams.
• EUR to AED. The dirham is managed against the US dollar, so in practice you are exposed to EUR/USD. We did not verify the details of any specific bank for this pair.
• EUR to THB. In Thailand a foreign buyer of a condominium must bring the money in from abroad in foreign currency, and the receiving bank issues the proof for the Land Department; see sending money abroad from Poland for the FET form.
• EUR to TRY. The lira has been volatile, and contracts in Turkey are often priced in euros or dollars to avoid this. We did not verify current rates and do not quote any; check which currency the contract is in.

In each case ask whether the price in the contract is fixed in the foreign currency or in euros. If it is fixed in a foreign currency, you carry the exchange-rate risk until you pay.

Staged payments

Off-plan purchases are paid in instalments over months or years. Each instalment is converted at the rate on its date, so the final cost in euros is not known on the day you sign. Two approaches:

• Convert in advance. You buy the currency needed for several instalments, or for all of them, and hold it in a multi-currency account. You remove uncertainty, but you commit money early and may be disappointed if the rate then moves in your favour. Check how the account is protected and whether the funds earn anything.
• Convert at each instalment. You keep flexibility, but you accept the rate of the day each time.

A middle route is to convert in parts. Whatever you choose, keep the proof of each payment and its exchange rate: it is the evidence of what you paid, useful for your own records and for tax purposes at a later sale.

Hedging basics

Hedging means fixing the cost of future currency in advance. At a high level:

• A forward contract: you agree today to buy a set amount of currency at a set rate on a set future date. Banks and some payment firms offer it, usually for larger amounts and often with a deposit or margin requirement. It removes the risk but also the chance of benefiting if the rate moves your way.
• A rate lock or limit order offered by some providers: you set a target rate and the conversion happens if the market reaches it. It gives you no protection if the rate never gets there before your deadline.
• Options exist but are complex and rarely appropriate for an individual buyer.

These are financial products with their own costs and risks. If your payment is large and the dates are fixed by a contract, ask your bank or a regulated provider what they offer. We do not recommend a product, and this text is not investment advice.

FAQ

Is the bank rate worse than a specialised provider? Not always. Compare the final amount received for the same sum and day, including every fee. We do not quote percentages because they change.

Can I send a large sum through a fintech app? Often yes, but limits and extra verification may apply, and the seller's side must accept the payment. Ask in advance.

Should I convert all the money at once? It depends on your payment schedule and tolerance for risk. Converting early removes rate uncertainty, converting later keeps flexibility. A mix is common.

Does the exchange rate affect my tax? It can. A later sale or rental income is calculated in your tax currency, so the rates on the purchase and sale dates may matter. Keep records and ask a tax adviser.

What if the price is in a currency I do not hold? Ask whether the seller will accept euros or fix the price in euros, and check which currency the contract and the receipt use.

How we help

We are a trilingual platform that finds properties and coordinates independent local lawyers and tax advisers. We can help you plan the payment schedule and introduce an adviser for the foreign-exchange question. This text is informational and is not legal, tax or investment advice; rates, products and rules change, so verify them before you act.