How to Buy Property in Czech Republic as a Foreigner
Who can buy property in the Czech Republic?
Foreigners are generally allowed to purchase property in the Czech Republic without restrictions. This applies to both EU and non-EU citizens. However, state-owned properties are not available for purchase by foreigners or private individuals. These properties are typically reserved for government use or special purposes.
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The Czech Republic is a Central European country known for its rich history, stunning architecture, and vibrant cultural scene. Its capital, Prague, is renowned for its historic charm and lively atmosphere. The country boasts a strong economy, modern infrastructure, and a high quality of life. With picturesque landscapes, including forests and mountains, and a well-preserved cultural heritage, the Czech Republic offers a blend of historical significance and contemporary appeal.
Investing in real estate in the Czech Republic offers several compelling advantages. The country has a robust and stable economy with steady growth, making it an attractive market for real estate investment. Property prices in the Czech Republic, particularly in cities like Prague, are competitive compared to other Western European capitals, presenting the potential for significant returns. The Czech Republic's strategic location in Central Europe provides excellent connectivity to major European markets, enhancing its appeal for both residential and commercial properties. With its strong legal framework for property ownership and a growing demand for rental properties, especially from expatriates and international students, the Czech Republic presents a promising opportunity for investors seeking growth and value.
Here are some highly desirable locations for real estate investment:
- Prague - As the capital city, Prague is a prime location for both residential and commercial real estate. Key areas such as the Old Town, Vinohrady, and Smíchov are particularly popular due to their vibrant lifestyle, historic charm, and accessibility.
- Brno - This major city in southern Moravia offers a dynamic urban environment with a growing real estate market. Areas like the city center and Černá Pole are highly sought after for their blend of cultural attractions and modern amenities.
- Karlovy Vary - Known for its historic spa resorts and picturesque setting, Karlovy Vary is a popular choice for those seeking both investment properties and vacation homes. Its charm and wellness tourism attract buyers looking for a tranquil lifestyle.
- Plzeň - Famous for its beer and vibrant cultural scene, Plzeň is becoming increasingly popular for real estate investment. The city offers a mix of historic and modern living options, appealing to both residents and investors.
- Hradec Králové - This city in northeastern Bohemia is known for its historic architecture and educational institutions. Hradec Králové is a growing market for residential properties, particularly for those seeking a quieter, more affordable living environment.
Where to find properties online:
Financing
Foreigners can secure property loans in the Czech Republic, as the banking system permits non-residents to apply for financing. If you are a foreigner applying for a property loan, you can consider options such as the "Mortgage for Young People" program. This program is designed to assist individuals under 36 years of age in purchasing their first property with favorable conditions.
Due Diligence and Sales Contract
Although due diligence is not legally required in the Czech Republic, it is strongly recommended. This process involves checking various aspects of the property to ensure everything is in order. Typically, the buyer handles due diligence, often with the assistance of professionals. This may include a lawyer for legal matters, a surveyor for assessing the physical condition of the property, and a financial advisor to address any financial implications.
In the Czech Republic, the property purchase agreement is known as the "Kupní smlouva." This legally binding contract details the terms and conditions of the property sale between the buyer and the seller. It serves as a formal record of the transaction and is crucial for transferring property ownership. Non-residents should also consider any legal or financial implications in their home country and may need to provide additional documentation for the transaction.
What are the costs like when purchasing a property in the Czech Republic?
Transaction Costs |
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| Who Pays? | ||
| Legal Fees | 1% (+ 19% VAT) | buyer |
| Notary Fees | 0.20% | buyer |
| Real Estate Agent's Fee | 2.50% - 5.00% | seller |
| Costs paid by buyer | 1.20% | |
| Costs paid by seller | 2.50% - 5.00% | |
| ROUNDTRIP TRANSACTION COSTS | 3.70% - 6.20% | |
| Source: Global Property Guide | ||
Footnotes to Transaction Costs Table
The round trip transaction costs include all costs of buying and then re-selling a property - lawyers' fees, notaries' fees, registration fees, taxes, agents' fees, etc.
Legal Fees:
Legal fees are generally negotiable and usually fall around 1.00% of the property price.
Agent's Fee:
The agent's commission is around 2.50% to 5.00%. In Prague, a real estate agent's commission is paid either by the buyer or split between the buyer and seller. In Brno the commission is always paid by the buyer.