Italian Finance Minister Vittorio Grilli, who declared a purchase price for his Rome apartment that was about half its assessed value, said the mismatch is due to a separate payment he made to a relative of the seller for earlier renovations of the 14-room home.
Grilli, appointed by Prime Minister Mario Monti to spearhead a drive to prevent tax evasion, declared in an April 27, 2004, purchase document filed with the Italian land registry that he paid 1.065 million euros ($1.39 million) for the apartment. The same day, he signed a loan agreement in which he and his mortgage lender attributed a value of 2.03 million euros to the property, according to a copy of the document obtained by Bloomberg News.
Grilli, 55, disclosed the additional payment made to the seller’s relative in a letter to Bloomberg News, in which he also said his declared price was compatible with tax-roll numbers Italy uses to calculate property levies. Grilli wrote the letter in response to a Dec. 20 story that revealed details of his purchase, including a mortgage of 1.5 million euros.
Writing in Italian on his personal letterhead, Grilli said the mortgage was based on a valuation of the property that “took into consideration the actual state of the property including the improvements made” by the relative of the seller, “the dealings with whom were subject to a separate settling of accounts.” He said that extra payment was made by transparent and traceable means.
In his letter, dated Jan. 8, Grilli invoked his right of “rectification” under Italian law to publish a response to the Dec. 20 report, which he said was based on “superficial valuations” and interfered with negotiations in a divorce settlement with his wife.
Grilli wrote that he bought the house through a mediator, to whom he paid correct and traceable commissions.
He said, “in the past, important works of refurbishment and of improvement have been made by a relative of the seller” and that “I had to settle all the economic aspects regarding such works carried out by him in order to avoid a likely conflict with the above mentioned person and proceed to a purchase that would not raise future controversies for me.”
The statement didn’t name the relative or disclose the size of the payment. The seller was Massimo Tosato, executive vice chairman of London-based fund manager Schroders Plc. (SDR) Tosato’s assistant at Schroders in London said he declined to comment on personal matters.
Grilli’s letter also said his declared purchase price was in line with Italian tax-roll numbers -- in his case, he said, more than twice the official tax value. “The taxes calculated based on the declared price have been paid in an amount much higher than the required fiscal minimum,” he wrote.
Prime Minister Monti picked Grilli in November 2011 to help shore up Italy’s finances. At Monti’s Dec. 23 year-end news conference, a reporter asked the premier whether he had sought a clarification from Grilli regarding the Bloomberg News report on the purchase. Monti answered, “Si,” or yes, without elaborating. Grilli declined to comment on the conversation with Monti.
Banca Monte dei Paschi di Siena SpA, the bank Grilli originally borrowed from, declined to comment on his mortgage. The Italian newspaper Libero earlier reported the property’s valuation of 2.03 million euros in a story following up on the original Bloomberg News report.
Grilli, who has spent most of his career in civil service, bought the 310-square-meter (3,336 square feet) apartment in Rome after returning to government work from London, where he was a managing director and head of Italian investment banking at Credit Suisse (CSGN) First Boston for about a year from 2001 through 2002. At the time of the 2004 purchase, he was serving as Italy’s general accountant.
Grilli said in October that he won’t seek a government post or a Treasury position after Italy holds its general elections on Feb. 24-25, which are due in February.