house buying eu logo

czech flag Czech Republic

Buying

There are restrictions on property purchases by EU citizens in the Czech Republic. If you do not have a residence permit it is likely that you will need to set up a Czech Limited Company (SRO) in order to be able to legally own a property in the country. This is not a daunting as it sounds, however, as you can have this set up for approximately 1,200 and it is a relatively straightforward legal procedure. If you have a residence permit, it is possible for you as an EU citizen to purchase a property in the Czech Republic, moreover, the Czech government have a policy that allows the nationals of certain "favoured nations" to be able to purchase land. For example, this currently applies to Norway and Switzerland amongst others.

It should be relatively straightforward to target a property, as there are a number of websites dedicated to selling property in the Czech Republic. Also, local Czech estate agents are to be found in abundance and they will often advertise in local newspapers. One area to note is that it is not always clear whether the buyer or the seller should pay commission to the estate agent. It can vary based on the location that the property is purchased, but the average price will be an extra 5% on top of the purchase price. Therefore, it is very important that you clarify who is to pay the commission on the purchase to avoid any unwanted surprises.

Once you have found a house that you wish to purchase and your offer has been accepted, you will enter into a reservation contract. This will ensure that no other party will be able to purchase the property ahead of you and you will be expected to put down a deposit that will be equal to 0.5% of the total price of the property. Once you are prepared to move to the next stage you will enter into the "future contract". This is the equivalent of exchanging contracts in the UK and if necessary you would be able to seek a mortgage at this stage. This stage is legally binding on both parties. Once all finance has been arranged, you will progress to the final stage of the contract process when you enter into the purchase contract. Once the purchase contract has been signed your property purchase will be formalised.

Surveys are not as common on Czech properties as is the case in many Western European nations. However, this should not deter you from arranging for your chosen property to be surveyed.

You will need to arrange for a local lawyer to research the title rights so that the property is free from third party rights. This is particularly important because in the Czech Republic the land and the building may have separate titles or even ownership.

The buyer will retain the property title only once the property has been registered, therefore, the purchase funds should be deposited with a notary and only released once the registration documentation can be produced. The seller will need to pay a property transfer tax of 3% on completion and the buyer will essentially act as guarantor on this tax. In other words, if the fee cannot be obtained from the seller after all reasonable efforts have been made to obtain it, the finance office will be within their rights to procure the fee from the buyer.

| Back to Top | Home | About Us | Site Map | Privacy Policy | Contact Us | ©2007 housebuying.eu |